Which network marketing compensation plan is best?

Finding the perfect network marketing compensation plan is very important. However, it isn't the single most important factor. Not saying that some don't have advantages and others have disadvantages.

But, if the compensation plan is the best thing they have to offer, turn around and RUN.

Now, it is important to understand the difference between the compensation plans. But please don't make your decision about a network marketing company

solely by its pay plan. You want to make sure you evaluate the complete picture. From the actual product, the business opportunity, and a fair compensation plan.

Most network marketing company's compensation plans are different. However, they are all based on four types of pay plans that network marketing companies offer.

The reason most are so different is because of the different commissions paid and bonuses.

Being able to understand these network marketing compensation plans starts with the basic terminology.

SPONSOR- The person that brought you into the business. This person is responsible for providing you with all the training and support you need to succeed.

ASSOCIATE/DISTRIBUTOR- Once you start your network marketing company, you then are able to distribute the company product/service and sign on other people to do the same. The people that open their own network marketing business under yours is now an associate.

UPLINE- Your sponsor is your direct upline. The person that signs on your sponsor and and so on is your upline. They should support you in your efforts to grow your business.

DOWNLINE- This group is the people that are signed on underneath your business. You can sign them on personally or they are signed on by somebody underneath you and so on and so forth.

BUSINESS CENTER- This term refers to your organization or team in the network marketing company. In other words, it's like when someone opens a franchise store which is ndependently owned and operated. However, you earn money from their work. Meaning the more people you have on your team the more you get paid.

DEPTH AND WIDTH- Width is defined as the number of associates you sign on personally. Depth is the number of levels you can earn a commission on.

Being able to have a level 9 depth or better allows you to leverage off of everyone under your initial business.

TIP- You want to have a plan that pays you with unlimited width and depth. That means your business will ALWAYS GROW. This means more money in your pocket.

LEVEL- The position of an associate based on their relation to their upline or downline. And the more people you have on your team, the higher in rank you move up. It's kinda like the army. Well, not really, but you know what I mean.

LEGS- Your first level associates, people that you sponsor, form a new leg. For example, you sign up John, Becky, and Sally. They in turn sign up three people of their own; they each start a leg underneath your franchise.

CROSSLINE- Is the relationship between two or more associates that work for the same company but are apart of a different team or organization.

Meaning your efforts don't influence each other's commissions.

Understanding these terms is critical in understanding a network marketing compensation plan. Now with these terms there are four different types of actual pay plans.

Four Basic Types of Network Marketing Compensation Plans

    A level can contain down to six associates with four downline     associates. This plan is somewhat limited because you don't have     unlimited width and depth to grow with.

2. Binary Plan This is the newest type of network marketing compensation    plan. An associate is granted to tie up one or more business centers.

   Commissions are paid on the group volume of the downline legs versus a    percentage of sales of multiple level associates. There isn't a depth    limitation on this type of plan.

3. Stairstep Breakaway Plan The oldest, most common type of network    marketing compensation plan. This plan rewards advancement of the    associate.

   Meaning, once an associate meets a certain prerequisite; they break    away from their sponsor. The sponsor gets a percentage of the entire    breakaway's organization.

4. Unilevel Plan This plan doesn't allow for an associate to advance beyond     the basic associate. This is considered the easiest pay plan to explain     to new prospects. This plan limits the depth at which your company     can grow.

These are the four basic types of network marketing compensation plans. Understanding them is fundamental when you decide to pick your network marketing company.

Our professional recommendation is to pick a company that won't limit your ability to grow width and depth wise.

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