Guidelines on Leading MLM Business Plans
MLM business plans are a prerequisite in any network marketing business for a smooth and well-structured execution of the business.
There are a plethora of Multilevel marketing business plans out there, few of which are listed below.
- Binary MLM Plan
- Unilevel MLM Plan
- Party MLM Plan
- Matrix MLM Plan
- Board MLM Plan
- Stair Step MLM Plan
- Gift MLM Plan
- Hybrid MLM Plan
- Australian MLM Plan
- Generation MLM Plan
- Monoline MLM Plan
- Spillover MLM Plan
- Australian X Up MLM Plan and so on.
Here, we are enlisting all the major MLM business plans that have been tried and tested over the years and proved humongously successful.
1. Binary MLM Plan
It is the first choice of most MLM companies, thereby justifying the top spot. It is a two-legged structure where each member is placed either of the two legs, Left or Right, also known as the power leg and the profit leg.
Each member recruits and sponsors two other members to join the plan, leading to fast expansion of the business in a relatively short amount of time.
Spillover – If a recruiter hires more than two members, the new member will be added to the next available member in the power leg. This allows a new member to be shared between all downline’s power leg, nevertheless of who recruited them, this process is known as spillover. Since this plan requires each member to recruit and sponsor two other members to join the plan, it can potentially lead to a fast expansion of the plan in a very less amount of time. One of the main variations of Binary Technique is that it is quantity inspired in contrast to level inspired. This also indicates there is an inspiration to help new affiliates in your organization.
In Binary MLM Plan, commission calculations are carried out based on business volume points, not levels. In some cases, certain companies provide level income as an additional source of income.
A commission is calculated based on whichever side a team or leg has the least amount of volume. The percentage will be calculated off that least amount of volume and every member will get paid based on that, so the profit margin depends on how your downline team members make sales.
The binary compensation plan is referred to add more sales to the downline members who would benefit in increasing bonus and gaining profits.
2. Unilevel Plan
If you want to grab a plan that is too simple, Unilevel is what you’re looking for. Explaining the plan to new affiliates is a cake walk in this case.
Each affiliate recruits newcomers in the front line, introducing them in any width and commission is distributed up to a fixed limited depth as per MLM compensation plan. Due to simplicity, rewards and bonuses are easy at any level or front line.
3. Party MLM Plan
Party MLM plans are an act of direct selling where marketers promote or market their products by arranging social events like a get-together, home party or any other gathering.
With more than 90 percent affiliates ( called consultants) being women, this MLM plan is often seen as a way of socializing rather than an income opportunity where a new group of friends, night out at home and fun at the party are added perks.
On such occasions, the products up for sale will be displayed and the consultant will make a short presentation. This will be followed by testing and viewing the samples. Cosmetics, wellness products, and kitchen utensils are generally sold by this MLM plan.
Word to the wise, Hosting a party is never easy, especially in this scenario where the parties are the center of the action. The consultants are edified to be a better hostess and to keep an eye open for a potential hostess to sell their products.
Party MLM plan consists of multilevel compensation plans. This allows the consultant to recruit other people to sell their products and gets paid on the order they receive. The focus is on profit margin at retail sales at the parties rather than building a large downline. Most of the companies have a Hostess Reward Program where the hostess is rewarded handsomely, at times by discounts and free products to keep the spirit of competition alive among the consultants. Well, who doesn’t like free stuff?
Tupperware is one of the successful companies that have this MLM compensation plan.
4. Matrix MLM Plan
One of the most popular MLM plans internationally, Matrix MLM plan is also called a ladder plan or a forced matrix plan. Matrix MLM plan is similar to a pyramid where members are organized in a particular width and depth. They are compensated when they achieve a set level. The company can set structures for members to qualify for a particular level.
For instance, if the structure set by a company is 3×5, a distributor can introduce 3 members as his frontline and a member can earn compensation up to the fifth level. The width is limited, therefore a member can motivate his downline members to earn more profit in order to boost his own.
5. Board MLM plan
Board MLM plan, also known as Revolving Matrix Plan, is the most popular plan for a limited number of members and is played between friends, colleagues and even family. A group of members works in a team called board and whenever a board exceeds a set number of members, it splits into two sub-branches. The top one member gets promoted to a next higher board and he will get an attractive array of incentives. The company can set how many promotional boards are to be introduced and how many members can be in a board. Since the number of members in this MLM plan is limited, payouts are easy.
6. Stair Step Plan
Stair Step Plan, also known as Stair Step Breakaway Plan, has the reps responsible for both personal and group sales. Business volume is created by recruiting and retailing product. Any representative with one or more downline recruits becomes a group leader. He/She ammases additional benefits according to the company policy. Once a predefined personal or group volume is achieved, a rep moves up. This goes on till the rep breaks away from their upline. From then on, the new group is no longer a part of his upline, hence they are a “breakaway”.
The commission plans have small pool commissions that are usually a small percentage of the overall payout.
This MLM plan is not level based. Oldest and the most successful marketing companies like Amway use this type of MLM structure.
7. Gift plan
A gen-next concept in the world of network marketing, Gift plan is also called a donation plan. A person places himself in a position of advantage by making a donation to others. This is a very attractive concept as you will be able to take a gift or donation from others once you gift a person. It is not exactly an MLM concept.
Basic idea is to give away a gift to one participant and receive a gift from several associates. Each member will be helped with several invoices of gifts from many members. MLM organization or administration will take some charge to run this program as management expenses.
The three main steps involved are
1. Giving– This imbibes valuable energy in your marketing niche, by providing something valuable without guile or goals.
2. Sharing – Another non-centered act by sharing your valuables with others.
3. Receiving -It is a tad long and anticipated process but new affiliates are assured by proper documentation.
Along with the right MLM Compensation Plan for your MLM business, a well planned and methodically structured MLM Software is essential to execute the plans effectively. Be our guest and try the MLM Software Live Demo which can be customized to fit your MLM business.