Network Marketing (MLM) Compensation Plans 

Perhaps Network Marketing is new to you... 
How do Compensation Plans Work?
How do You Identify a Great Company?

Compensation plans in network or multi level marketing (MLM) companies vary from one company to the next in both the amounts that you will be paid, and how they are structured; or in other words, how you will collect income or how you must qualify to earn income. 

When you consider joining a company, understand that a good management team will design the compensation plan so that both beginners and experienced professionals can succeed with their distributorship business. 

If you become a wholesale customer or independent distributor of a network marketing company in order to simply purchase the product or service for your own use, then the compensation plan doesn’t matter that much.

However, if your intent is to earn extra income, work from home and receive lasting residual income; take a close look at the pay plan or marketing plan and ask the important questions.

• Look for companies that have a reasonably low start-up fee. 
• You should not be expected to make a large financial investment up front to be eligible to join. 
• Make certain that the product line is something that you will personally use. This will also then ensure that you can endorse the product authentically and genuinely; and will augment your rate of successfully representing it to others. Jumping into a company just because it is the “next big thing” when you don’t sincerely believe in the product is to go about it the hard way. 

Management

The executive management team and owners of network marketing companies design compensation plans to either strongly favour the owners, or to establish a good working relationship and fair partnership with the independent distributors or sales force (you).

Public MLM companies have a responsibility to financially reward the share holders; so in those cases the independent distributors are generally not paid as well as in private network marketing companies. When you are selecting a network marketing company to become involved with, it is wise to seek a company that has at the highest payout of the gross revenue between the owners and the distributors as possible. A higher payout (over 40%) shows how the company really feels about its distributors, and what you can expect from the company in the future. It is prudent to seek out a company that has an experienced management team as well.

 (Xyngular is a private company and allocates 51% of revenue to its distributors and owners.)

The Xyngular Board of Directors has over 120 years of direct sales experience and work with an experienced management team with 40 years of experience heading direct sales organizations with hundreds of millions in annual sales; and a corporate support structure that can ensure worldwide success. They have crafted a well thought out compensation plan and a company that optimizes success.

Breakage

Network Marketing or MLM compensation plans are most often fashioned in terms of levels of pay that you will earn based on the organizational structure or layers of distributor positions under you in the network of members.

One important aspect to examine is what is known as "Breakage". This refers to what happens to commissions when a distributor in your downline (someone you directly sponsor or anyone that joins under any of those distributors) does not qualify for the pay (or drops out). It basically means that those funds are then directed back to the company as opposed to being paid to the next more advanced distributor or upline member (you).

When network marketing companies make claims in regard to how much you can earn on your overall residual business volume, you need to be aware that in reality this sometimes does not take into consideration the computation process of breakage. Simply stated; breakage generates extra revenue for the company, not you. Companies that have no breakage or have "dynamic compression" will ultimately provide extra financial earnings for its distributors. By working only with no breakage companies, you collect any of those amounts yourself, versus it passing back to the company.

(Xyngular does not have any breakage in its structure plan.)

Look For Network Marketing Companies that Provide Many Different Ways of Earning Income

Some companies have as many as six different ways to earn income, and other multi-level-marketing companies may have a little as two ways to earn income. Common sense dictates that the more ways to get paid the better especially because different people possess different skills and excel in different types of actions or business building behaviours that can generate earnings.

Income generally falls into these kinds of categories:

• Fast Start Income: income earned by enrolling a new distributor.
• Fast Start Generations Income: compensation paid because people that you have personally enrolled are enrolling new distributors.
• Matching Bonus Income: a matching bonus earned on the monthly volume of distributors that you have personally enrolled.
• Straight Line Sales Pool Income: compensation based on the sales volume of other distributors from the entire company who joined after you.
• Monthly Signup Bonuses: compensation based upon enrolling a certain number of new distributors that month.
• Rank or Infinity Bonuses: income earned simply because you've attained a higher rank, usually based on a percentage of the total business sales volume in your  organization.
• Residual Income:  revenue based upon  repeat product or service purchases and usually paid monthly for the  reorders in your group or network. This is especially powerful in the unilevel with dynamic compression comp plans.

(Xyngular offers 6 ways to earn income; as well as extensive world-wide travel rewards.)

 

The Most Common Network Marketing Pay Plans Today Include:

• Matrix
• Unilevel with Dynamic Compression
• Binary

The pay plan type refers to the structure or design of the network of distributors. Each compensation plan has its inherent benefits and shortcomings. And most well established companies will have some volume or monthly quota that each individual representative must maintain in order to collect income.

The Matrix Compensation Plan generally has members building a 3x9 matrix for example, which consists of three positions, or legs, directly under you (on your first level) with nine down in each leg. When considering breakage; if people drop out, which is normal (i.e. attrition) then you earn less on your matrix unless the pay plan allows stipulations to compensate for this, such as the ability to fill in the blanks with new members.

The Unilevel with Dynamic Compression is a type of compensation plan that is becoming more popular because it allows members maximum flexibility to build as many legs, or business units, as desired. It also allows for unlimited first-level width, with a depth of usually 5 to 10 levels. Dynamic compression means that if there are any gaps in those levels due to breakage computation, the system itself will compensate for this and automatically pay it out to the other members by rolling up automatically. (The money stays within the distributors, not the company.) This conceivably allows a distributor to get paid on unlimited levels if people drop away. It is generally an equitable system that attracts both the new home business operator and the professional network marketer.

(The Xyngular compensation plan is Unilevel with Dynamic Compression.)

There is no stressing over strong legs and weak legs; no waiting for someone to reach a certain title so that you qualify to earn more commissions; or worse, having their advancement cut you off from some of your hard-earned commissions. And, no stress at the end of each month trying to ensure that no-one drops in title and keeps you from a major portion of your monthly income.

The Binary Compensation Plan has all members building two primary first level legs with infinite depth. Strengths are simplicity, but an example of a weakness is that you may only get paid on one leg, or you may only get paid when your lower volume leg attains a specified volume or percentage. If your Binary leg does not reach its objective you may have to wait longer to cycle and receive a cheque.

To Summarize

When you are considering a network marketing company:

• the more ways to get paid the better
• the fewer restrictions around how you are able to build structure the better
• no breakage in structure (dynamic compression) is preferred for maximum income generation. 
• and last but not least; make sure that the product is something that you will use; that you believe in, and that you can enthusiastically recommend!
   

Learn about the Xyngular Compensation Plan and how it can help you offset the cost of your weight loss and supplement your household  income on an ongoing basis.