Just like any other business, when you are looking to get into a multi-level marketing (MLM) company, you want to make sure that the company has a good compensation plan. This is especially important in MLMs because there is an opportunity to earn money not just from selling products or services, but also from recruiting new members to the company. So, what are the best MLM compensation plans in 2023? Keep reading to find out!
What is an MLM Compensation Plan?
An MLM compensation plan is the structure or formula according to which distributors are paid for their efforts and how new members are added to the network. It is essentially the backbone of any MLM network. An ideal network marketing plan should mirror the values and ethics of the company and properly reward the distributors.
All the commissions, bonuses, payouts, and calculations in the network will be based on the compensation plan. Even any minor error in the MLM network marketing plan could prove to be fatal for the business.
Best MLM Compensation Plans
There are plenty of compensation plans implemented in MLM today. All of these are derived from the three fundamental Binary, Unilevel, and Matrix compensation plans. Every other plan out there is a variation of these three. Each compensation plan has its own features and unique characteristics and companies should choose a plan that matches their goals and ambitions.
1.Binary MLM Plan
The Binary MLM plan with its appealing compensation plan and reward system, is one of the most widely implemented MLM plans today. Promoting teamwork and offering attractive rewards, the plan helps in the expansion of the business, and individual gains its distributors. In the binary plan, recruits are assigned to either the left or the right leg of a two-legged structure. The two legs are known as the profit leg and the power leg. It is one of the simplest MLM compensations available today, and that is one of the primary reasons for its popularity. These are the top 15 binary MLM companies in the world today.
Check out our Binary MLM Demo to know more about the compensation plan.
2. Unilevel MLM Plan
The unilevel MLM plan is another basic and widely implemented MLM compensation plan. Both small and large networks can implement it with minimum hassle. This plan’s main objective is to assemble a large number of members in an even distribution. The Unilevel plan has no width limitations. Members can add as many new downlines as they can, building a larger and more effective network. Know more about the working of unilevel MLM plan here. The strategy is simple to understand and does not require extensive training to gain expertise. It is a popular network marketing plan among newcomers and part-timers.
Check out our Unilevel MLM Demo to know more about the compensation plan.
3. Matrix MLM Plan
The matrix MLM plan deploys a strong structure with constrained width and depth. There can only be a certain number of distributors at each level due to this. Due to the width restriction, not all downlines can be positioned right beneath the sponsor. The plan is known as a “forced matrix plan” since sponsors are “forced” to place their downlines beneath, other downlines. However, the narrow width of the network is advantageous for new distributors signing up with powerful leaders who can help them quickly fill their matrix. See how the matrix MLM plan compares against the Unilevel MLM plan?
Check out our Matrix MLM Demo to know more about the compensation plan.
4. Stairstep MLM Plan
The stair-step MLM plan has been around for a while and is one of the most trustworthy MLM compensation plans. With the help of their downlines, distributors can create networks of any size they desire. The unilevel MLM Plan, in which there are an endless number of front-line positions, and the stair-step plan are relatively similar. As the levels deepen, a percentage is connected to each level. When the team has fully matured, it will “Break Away,” and each member will receive a commission.
5. Gift MLM Plan
The gift MLM plan gives distributors and businesses the possibility to make significant earnings quickly. The plan is also known as a donation plan, help plan, or money order plan. It is not a typical MLM compensation strategy. Giving one member a gift while receiving gifts from multiple other members is the main concept of this plan. The simplicity of this approach and the potential for substantial income make it popular.
If you want to be successful in a multi-level marketing company, it’s important to choose the right compensation plan. In 2022, several MLM compensation plans are proving to be popular among network marketers. We’ve outlined some of these plans here. Secure MLM software can help you manage all the MLM compensation plans that you think are best for your business.