Volume Based Network Marketing Versus Level Based MLM Business
by Samson Itoje
The purpose of starting a business is to make money. That goal is the same for traditional businesses as well as network marketing businesses.
Therefore, when you are shown an mlm business opportunity, your first priority after establishing that the business is legal is to ask about the money.
Yes, the very next question should be, "How will you pay me?"
There are four basic compensation plan types in the mlm industry.
1. The Unilevel pay plan
2. The Matrix pay plan
3. The stair-step breakaway plan and
4. Binary pay plan
The above four compensation plans is one way to group pay plans.
A second way to categorise pay plan is to group them as either volume based or level based.
Volume Based Versus Level Based Compensation Plans
Remember . . . Your goal for starting a network marketing business is to make money and lots of it. Hence, you should be concerned about partnering with an mlm company that offers a compensation plan that will make you the most money for the same level of work.
So, what kind of mlm company will make you the most money?
In simple words . . . You will make the most money from a network marketing company that pays you based on total sales generated by everyone below you NOT one that pays you up to a particular level of downlines.
Simple reason: Paying you based on levels of registration will seriously limit your income.
Let's take a case study to drive the point home.
Case Study - 15 Levels Deep Compensation Plan
There is a particular multinational network marketing company in Nigeria that pay distributors up to 15 Levels deep.
Paying distributors up to 15 Levels is a lot. Therefore many distributors for this particular company has hailed it as the best compensation plan in the industry.
However, before you jump in like everyone else, take a moment to look deeper.
Suppose for a moment you are a member of this particular company and you have downlines up to 50 levels.
The company will pay you on the sales volume up to the 15th level and you get nothing beyond that.
Now, most network marketers understand that many of the people they register will give up after 1-3 months of activity. So, of the 15 Levels the company plan to pay you on, one-third may be non-performing levels.
You may have some performing levels from the 16th to the 50th level but the compensation plan says you cannot profit from those levels.
To make matters worse, you may discover down the road that you have a superstar salesperson somewhere on the 37th level. He generates a lot of sales but the company won't pay you anything on his sales volume because he's outside the 15th level.
How does that make you feel? A bit unhappy? Dissatisfied?Now compare that with the scenario in a volume based mlm company. This company pays bonuses on ALL sales that occur through the activity of anyone below you in the system regardless of the level.
QUESTION: Do you think you would earn more from the volume based company with the same level of work?
In summary. . . The next time you're presented with an mlm opportunity remember to ask the question, "will I be paid based on sales volume of everyone below me or only to some levels?"
If they say we will pay you to a particular level, decline the offer.
What if you're already part of a company that pays bonuses up to a fixed level?
Well it is time to re-consider your membership with that company.
If you're in business to make money it makes no sense to partner with a network marketing company that will pay you less.
Ready to make the switch from a level based mlm company to a volume based mlm company? Click Here to signup