Getting Familiar With Network Marketing Compensation Plans

Different Network Marketing companies also known as MLM (multilevel marketing) companies have different compensation plans for its subscribers

. Before starting your career as network marketing representative, you must read about the different network marketing compensation plans carefully so that you can compare all plans thoroughly before making a decision. It is really important to read about all network marketing compensation plans in detail as many of the compensation plans are complex and confusing. Even though, every network marketing company claims that they offer best compensation plan available in market but it is highly recommended to do your own research before making a decision.

The first and one of the most popular network marketing compensation plans is known as binary pay plan. This looks simple as each sale agent has to pay a specified percentage of profit to the two sales agents above him in hierarchy. Similarly, the same sales agent receives percentage of revenue from the two sales agents below him in hierarchy. Some more network marketing compensation plans are similar to the binary plan but the number of sales agents varies in the upward and downward hierarchy.

In case of binary plan, a sales agent must carefully select the two sales agents to keep in his down line. Binary network plan is beneficial for network marketing companies as sales agents invest time to form a team of most competitive and smart sales agents in his down line. It is also important to understand that in binary plan, the sales agent in upper level can benefit from the all the lower levels formed by the two sales agent directly below him. For example, if the two sales agents under the first agent receive a percentage of revenue from the sales agent below them, they will also pay some of the revenue to the sales agent above them. This makes it beneficial for the agent who is at the top most level.

In most networking marketing compensation plans, a different percentage of revenue is transferred by the lower levels to the upward levels. This is why it is important to read about even a simple network compensation plan like binary plan in detail to understand the plan completely. One of the advantages of binary plan is that it forms a strong bond between the sales agents as the agents in up line make sure to train and help agents in the low line as their income depends on the performance of the agents in lower levels.

One of the most popular network marketing compensation plans in new network marketing companies is unilevel plan. This plan is commonly consists of 5 to 7 levels and pays a defined percentage of amounts on each product purchase volume. Even though the levels are up to 7 at most but there is no limit for the width of each level unlike binary plan. Some other commonly used network marketing compensation plans are the matrix plan and the breakaway plan. With matrix plan, the number of levels as well as width for each level is fixed while the breakaway plan works completely on different strategy in which a sales agent break away to form his own separate group once he reached a certain number of group sales volume. Even though, there is difference in strategy and plans but all network marketing compensation plans can earn you money if you understand them completely before choosing one.

by: BrianGarvin

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