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The Three Proven MLM Compensation Plans Part 1: Overview

Date: Oct 20, 09
Author: Mark Rawlins
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URL: http://www.mlm.com//articles/view/the-three-proven-mlm-compensation-plans-part-1-overview/print

What's the world's best MLM compensation plan? If you're like most people in the MLM business, you just want to know which plan works the best. . . .P.S. Distributors need to understand compensation plans, too!

 

This is Part 1 in a series of five articles.

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 “What is the world’s best MLM compensation plan?” you ask. If you’re like most people in the MLM business, you just want to know what network marketing compensation plan works the best. The fact is that over the last 20 years, there have been three predominant compensation plan types implemented by select network marketing companies to achieve landslide success:


 

Each of these plans has been magnificently successful! Each one can work and can be a good choice. Herbalife, NuSkin, XanGo, Tahitian Noni, Meleleuca, Isagenix, and Synergy are all living color examples. The thing to remember is whichever plan you choose—Breakaway, Hybrid  Uni-level, or Binary—each has its own specific, unique set of challenges. [Each of these plans and their challenges will be discussed in detail in the upcoming articles in this Series: Part 2: The Breakaway MLM Compensation Plan; Part 3: The Hybrid  Uni-level MLM Compensation Plan; Part 4: The Binary MLM Compensation Plan; and Part 5: Breakaway, Hybrid  Uni-level, Binary MLM Compensation Plans: Differences.] 

 

  While all three of these plans are good choices, I cannot emphasize enough that the type of compensation plan your company chooses is of the utmost significance! When you create your own MLM business, one of your most essential priorities and responsibilities is to design a compensation plan that fits your company’s unique needs and offers a mix of elements that will take your company to the top. For example, the business model your company chooses, i.e., Party Plan, must be considered in choosing the type of compensation plan you use because it has a profound effect on every aspect of business operation.

 

Sometimes MLM network marketing companies tend to overlook the strengths and weaknesses of a compensation plan when moving toward their dream. Swept away by all the excitement, they don’t step back to evaluate why some plans work and others don’t. It’s essential to do your homework and study the compensation plan possibilities in depth to determine which plan best meets your company’s needs and offers the greatest potential for success.

Actually, what’s probably even more important than which compensation plan you choose for your company, is once you’ve chosen your path, committing to it 100% and staying with it, period. This should typically be an irreversible decision, otherwise the consequences can be catastrophic. For example, if you start out with a Binary Compensation Plan and then switch to a  Uni-level, by in large, the things you’re doing to make a Binary work are so different than those you have to do to make a  Uni-level work, you take all the value out of your distributors’ blood, sweat and tears. It is a very difficult thing to transition from one compensation plan type to another!

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Watch for Part 2 in this series of five articles that examine the characteristics and differences of the three proven MLM compensation plans:

 

 

 

Mark Rawlins, CEO of InfoTrax Systems, an MLM software and commission consulting company, will be a presenter at The Symposium November 16-17 in Salt Lake City. His topic will be: "Understanding Commission Plans."  This event is an MLM start-up conference for direct selling executives sponsored by the Symposium Group--a consortium of direct selling experts dedicated to providing MLM training and strategies to entrepreneurs interested in starting a company as well as executives of start-up and existing MLM companies. Mark is a board member of the Symposium Group.

 

For more information on The Symposium, please visit http://www.thesymposiumgroup.com/ or http://www.mlm.com/mlmstartup%20or%20call%20888.781.1100. The Symposium is a bi-annual event, so watch for our April Symposium.

 

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