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MLM Compensation Plan
How to Select the Best Compensation Plan that Suits Your MLM Business

MLM compensation plan is a tactical component of an MLM business that provides a solid foundation for the company. The compensation plan helps in creating a strong environment in the workplace by giving good returns to the performers. It drives the team, motivates them and brings optimism as they explore more opportunities for earning and growing.


A finest and appropriate MLM compensation plan can leverage the business performance whereas a mediocre or ill-suited plan can damage the business operations. Thus, while selecting an MLM compensation plan, one must be sure that it meets the requirements of the business and then go ahead with it. Following are a few points to consider while choosing an appropriate and profitable MLM compensation plan.

1. Understanding the basics of all MLM plan: It is a very vital step in the process of choosing an MLM compensation plan. It is essential to understand the concept and mechanism of each plan to get optimal results. Secondly, one should also consider the accessibility of resources while selecting a compensation plan. There is a range of plans, namely binary plan, matrix plan, board plan, generation plan and hybrid plans.

Every plan comes with its pros and cons. For example, the binary plan allows a 2*2 matrix whereas board plan mandates to fill a number board with recruits. The different plan offers different types of incomes and benefits to the salespeople. The leading MLM software like MLM Vibes supports all kinds of compensation plans.

2. Scrutinize the needs of sales affiliates and marketability of product your company offers: It has been observed that different plans are popular in various markets. The requirements of people differ in different places. Secondly, it is crucial to check the feasibility of the product in the market. A high-selling product that brings more revenue must be backed by a compensation plan that distributes payout generously.

3. Check the growth opportunities provided by the MLM compensation plan: Some plans give individual benefits for members whereas others give more importance to team performance. Before finalizing a plan, one must anticipate the growth prospects offered by any plan to its members. Some plans work on the concept of spillover effect which includes placing a recruit anywhere in the downline of a sponsor. This helps downline members to earn more income and find more leads.

4. List the types of incomes distributed under a particular MLM compensation plan: Whatever be the compensation plan, an MLM business triumphs when its affiliates are sufficiently benefited with various kinds of incomes such as bonus, commissions, loyalty points, cash prizes, royalty and other rewards. A potential recruit checks the compensation plan of an MLM company through various aspects.

5. Assess the scope of leadership under MLM compensation plan: There are some plans which do not allow expanding the network beyond a limit due to which a member has to develop his downline members to earn more income. He has to motivate, guide and mentor the team members for better performance. This practice helps in building an alliance among members and provides plenty opportunities for the sponsor to lead his team in the right direction. A culture of belief and involvement is created in the workplace which is a sign of healthy and sustainable MLM business.

MLM Vibes has developed a power-packed MLM software that supports various plans and also offers customized plans as per the requirement of the client. Further, the team aspires to provide guidance to the client in choosing the most suitable MLM compensation plan for maximum output.

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