Best MLM compensation plans for Network Marketing business

Multi-level Marketing is a business that opens great opportunities for the people who are interested in doing business. In older days there were some trust issues faced by MLM businesses, now it has become an industry that generates billions of dollars globally.

In this digitalized world every business started adopting new strategies. MLM business plus MLM software is a great combo for growing your Multi-Level Marketing business. Every network marketing business will have a compensation plan for giving commissions to the distributors. There are so many MLM plans, they all have the same foundational principles for growing a business.

Best MLM plans to watch out

1. Binary MLM plan

A binary MLM compensation plan is the popular compensation plan that is used by most network marketing vendors. The binary tree structure follows a two-leg structure which includes a sponsor and in his/her downline a new member joins either left or on the right side. Unlimited members can join this system that will lead the business to great heights. It is the plan that offers equal benefit for both the legs in the tree. It’s the basic model of a multi-level marketing business followed by most of the MLM companies in India.

Bonus

• Sponsor bonus
• Pairing bonus
• Matching bonus

2. Uni-level MLM plan

As the title refers, people may think that a Uni-level plan is a single line plan. That is partially correct but the tree involves two to ten levels in depth. In this tree, you can add new candidates in a single line that means you have direct control over the distributors. The MLM tree grows horizontally as new members join the business. Most of the companies use this plan to attract affiliates as it offers total control over the downline members.

Bonus

• Sponsor bonus
• Fast start bonus
• Level commissions

3. Matrix MLM plan

Matrix plan is otherwise known as Forced Matrix Plan, which has a pyramid-shaped tree. The members are arranged in a fixed number of width as well as depth. There is a limit in recruiting members. The compensation is calculated with the formula of width*depth. The most commonly seen Matrix structures are 2*12, 3*9, 4*7, etc.

The members are added to the upline according to the ratio chosen by the company, the other members will spill over to the next level.ie, If the company chooses 3*9 then the company recruits three members to the first level and the rest will spill over to the later levels that have a depth of 9 levels.

Bonus

• Sponsor bonus
• Matching bonus
• Position bonus
• Level commission
• Matrix bonus

4. Board MLM plan

The board plan is also known as the Revolving Matrix Plan or Matrix cycle plan. In this plan, there are a group of distributors working as a team that is known as the board. A company adds new members to a board as per the company protocols. When a board is full it splits to form a new board composed of excess members. The board plan is limited in both depth and width depending on the choice of a cycle and you could be allowed to sponsor just two members on the first level and then with only a depth of two levels. By completing a matrix of six members a compensation will be granted to the affiliate.

Bonus

• Referral bonus
• Matching bonus
• Level commission
• Position bonus

5. Party MLM plan

The name describes the plan ie, the Party plan is a system used by the vendors and the affiliates for promoting their products and services during a social event. The host invites all the relatives, neighbors, friends, etc for an event to the venue where the selling and promotion occurs.

This is a straightforward selling plan in which the host directly introduces the product to the gathered people and may give them some catalogs for choosing the product. Party plan is mostly seen in the small gatherings of women, the products like cosmetic items, pieces of jewelry, etc are been sold in the event.

6. Gift MLM plan

The Gift MLM plan is the simplest plan in the multi-level marketing industry as it helps the start-up MLM vendors to succeed in their business. The gift plan is otherwise known as the Donation Plan or Helping plan. The plan is all about giving and receiving.

The plan offers benefits from each other since the concept is all about giving and receiving. Only the members who have contributed to help others will be eligible for requesting and receiving the funds. The requested member and the contributed member should update the details in the system so the details will be available whenever needed.

Bonus

• Give help & get help
• Sponsor bonus
• Stage advancement bonus

7. Hybrid MLM plan

The combination of binary and uni-level MLM compensation plans. The plan starts with a user who recruits two members on the next level on the left and right side while the other recruiters are pushed over to the next level and the level continues to grow in depth. A hybrid plan doesn’t have any supervisor to control the network, all the members work as a team to increase the revenue.

Bonus

• Fast start bonus
• Sponsor bonus
• Custom bonus

8. Stair-step MLM plan

Stair-step plan permits unlimited frontlines, the sales done by a member, or a group will influence the entire network. A distributor grows in the company when he/she meets the target. The distributor gets increasing discounts as he/she moves from one level to another because of the increase in sales.

Bonus

• Fast start bonus

9. Spillover Binary MLM plan

Apart from a binary plan spillover plan helps the sponsor to add a third member to the weaker leg and thus he/she can balance downlines, maximize profit. The binary plan makes it difficult for the sponsors to have control over the sales as the earnings become dependent on the fixed number of downlines and could do nothing for increasing the sales rate. This plan helps the sponsor to recruit 2 members on the left and right side and also can add new members as spillover.

Bonus

• Sponsor bonus
• Binary bonus
• Matching bonus

10. Monoline MLM plan

The Monoline plan works according to the method of first-come-first-serve so the timing of the member joining is vital. It is also known as a straight line, single-leg, or linear MLM plan. The MLM plan grand access to the existing users to earn from every new recruit, this is why it is considered as a highly effective plan for multi-level marketing business. It has a linear structure, when a user is recruited he/she falls under a sponsor in a single line.

Bonus

• Referral bonus
• Rejoin bonus
• Matching bonus

11. Generation MLM plan

Gap commission or repurchase plan is the other name of the generation MLM plan. The recruited members should make sales for getting higher commissions, if the sales increase, the more the profit increases this really helps the companies. This plan depends on the mouth-to-mouth advertisement that gives the plan a confidential touch. It is called a generation plan because the organization splits the generation into levels according to the policies of the company and members get bonuses based on the levels.

12. Australian X up MLM plan

This compensation plan helps the members to achieve bonuses themselves. It is also called a Uni-level X-up plan. According to this plan a user earns nothing from his/her downline members during the first sale as the entire sales made by his downlines goes to his upline. The user could earn when his/her downlines have newly recruited members.

Bonus

• Sponsor bonus
• Level commission
• Fast start bonus

13. Flower looming gift plan

A flower looming gift plan works like a rotating flower structure, that consists of four layers that are fire, air, earth, and water. Each member joins into the outer layer that is in the fire level by gifting an amount to the member in the water level. The newly joined members move from the outer layer to the inner levels and will get a gift when he/she reaches the water level.

Final round-up

Every MLM compensation plan has its own benefits and you should choose the plan that fits your business. So before opting for one of the plans read the blog and make some basic knowledge in MLM plans. Now many network marketing companies provide a free demo that will be a great opportunity for the vendors to experience the compensation plan.