MLM Pay Plans

Review the potential MLM Company plans used to distribute and pay the distributor's earned bonuses and residual income. Study each carefully before signing on.

MLM Pay plans Companies have devised a variety of MLM compensation plans over the decades.

•''Unilevel'' or ''Stairstep Breakaway plans'' are the oldest and most popular. They feature two types of distributors -- managers and non-managers -- and three types of pay;

•"Baseshop overrides'' are overrides of managers from their subordinate non-managers, collectively called a baseshop. This is the same as any other sales organization.

**''Generational overrides'' are overrides of managers from the baseshop of managers who were previously their subordinate. Most plans compensate at least three generations of such managers.

**''Executive bonuses'' are commissions for managers who exceed a sales quota. For example, 2% of the total company sales revenue may go to a ''bonus pool'' that is shared monthly ''pro rata'' to managers who exceed a specific dollar amount monthly.

*''Matrix plans'' limit the width of each level in a distributor's group, forcing strong distributors to pile ("spillover") to their recruits over people who did not sponsor them.

*''Binary plans'' limit the width of each level to two legs. Commissions are based on "cycles," where a distributor is paid a fixed amount whenever both legs achieve a certain number of sales units each. Commissions are paid incrementally when the sales volume in each leg matches.

*''Elevator'' or ''Matrix schemes'' feature a board or a list on which each distributor pays in one or more product units to participate. When a certain number of units have been paid in, the structure splits and the earlier participant receives consideration.

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