Let’s Understand MLM Compensation Plans — Part 6
Oct 2nd, 2008 by admin
Time to put horizontal and vertical together, and get to both the side and the bottom of your MLM business.
In Part 4 of this series, I said that the first question you can ask is, do all the people that I myself recruit get placed in the first level beneath me? There are four major types of plans out there. Two of them do put all your personal recruits in your first level or tier, two of them don’t.
The two that do are called Stairstep-Breakaway and Unilevel. We’ll get to the two that don’t later.
The second question I suggested is this: Does the plan allow your first level to grow indefinitely, or do you eventually lose some of your recruits? With the Unilevel plan, your first level grows indefinitely. With Stairstep-Breakaway, you will “lose” some of your first level recruits. I put the word lose in parentheses for a reason I’ll get to.
Let’s look at the Unilevel plan. The main selling point is that you will never lose any of your recruits. That sounds good, doesn’t it? But as we’ll see, there’s a cost.
The plan allows unlimited horizontal growth. It’s never checked. But we know, after reading Part 5 of this series, the plan’s not going to be able to allow unlimited vertical growth along with it. As soon as you find out that the plan is Unilevel, you can ask, “How many levels down does it go?” There has to be a limit. Math insists upon it.
Look for something between five and nine levels. And then cast from your mind the beautiful image of circles going on forever down the page and beyond. It can’t happen. In my mind, that’s a big cost to pay for unlimited horizontal growth, because you’re limiting the leverage you get from others. Instead of just steady, moderate growth down the page, you’re betting on superstar recruiters being somewhere in your first few levels down.
Note that if the plan goes down as far as nine levels, they’ll have to pay ten commissions per sale. That’s a lot. Unilevel plans will vary based on the percentages they pay at each level. Also, you may have the opportunity to promote to a higher rank and earn a better percentage after promotion.
If you think limitless horizontal growth is the end all and be all of MLM, then Unilevel is for you. But before you reach that conclusion, come back for Part 7 and check out the variation that Stairstep-Breakaway gives to it.
