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Show Me The Money - Network Marketing Compensation Plans Compared
| Guest post by: Jordan Crouter |
Article Overview: There are so many network marketing companies to choose from, how do you decide which one has the best compensation plan? By understanding how the top three or four compensation plans work, you will be on your way to making an educated decision that will put you on the path to success.
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Show Me The Money - Network Marketing Compensation Plans Compared
Are you that person that wants to head for the hills when someone tries to explain a Network Marketing compensation plan to you? For the non-experienced individual this might be the case because they can be very complicated and difficult to understand. But as far as I can tell, there are basically three or four compensation plans, as well as, some variations or hybrids to each of these plans.
1. Based on my research and understanding,approximately 90% of network marketing companies have the “Stair-Step- Breakaway” compensation plan. With this plan when your team members become leaders and are making as much as you are, they are allowed to breakaway from you and start building a team of their own. As they breakaway, they will begin to earn a larger commission for themselves. Then you begin to rebuild more leaders from yournew team members. This cycle is repeated over and over again. This type of plan requires the constant rebuilding of leaders, therefore, requiring a lot of coaching and training to each new group of leaders. It could make you think that you do not want to help your team member become as successful as you are, because they will just breakaway from you once they are.
The “Stair-Step-Breakaway” compensation plan only allows you to build one level. There is no limit as to how wide you build;however, you do not have a teamwork atmosphere when all team members are on your first level. Amway, Nu-Skin, and Herbal-Life,uses this type of compensation plan or a variation of it.
2. A “Binary” compensation plan builds two teams or legs. However, with the original “Binary” plan it washes out the totals of Team A and Team B at the end of each month and does not carry any volume over any to the next month. Also, in the original “Binary” plan, if your Team A and your Team B volumes do not match at the end of the month, you don’t get paid. Ex: If your Team A volume is $8,000 and your Team B volume is $10,000, you either have to buy product to get Team A up to $10,000, or you don’t get a check. Usana, Synergy, Mona Vie, uses this type of compensation plan or a variation of it.
3. The Unilevelcompensation plan only allows you to sponsor one level of distributors and there are not any limits set on how wide you can build. This plan, like the “Stair-Step-Break-Away,” does not encourage teamwork because of the first level structure. This plan works best if you are able to recruit a large number of distributors on your frontline and then have your frontline do the same. Tahitian Noni, Sportron, Xango, Unicity, uses this type of compensation plan or a variation of it.
As you can see there are many things to consider when choosing a network marketing company. It is important to have the compensation be fair and be something you feel you can succeed in. However, it is important to have a product that you can put your name behind along with leaders who are ethical. By weighing all of these factors and making an educated decision, you will have a good chance of becoming successful with whichever Network Marketing company you decide to join.
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About the Author: Jordan Crouter RSS for Jordan's articles - Visit Jordan's website
I was raised knowing I could BE, DO, and HAVE whatever I want, as long as I just make BIG decisions and put my mind to it.
Click here to visit Jordan's website   Life Has A Windshield Ready Or Not Time Will Tell Do You Have a System Emotion Generates Momentum Thrill of Victory |
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- I've been looking at a number of different opportunities and end up meeting a lot of Network Marketing / Multi-Level Marketing people.
Some of the offers look interesting but everyone I talk to about it says to avoid these guys like the plague - what's the deal? Why do people hate network marketers and MLM people so much?
Is it not legit?
Re: MLM Marketing, youtube, and buzzirk mobile.
- I have experience with MLM too. My initial reaction to the business was "snake-oil salesman" but once I got to understand the "overall business model" I am now an advocate to it.
MLM (Multi-Level Marketing) is also known as Network Marketing. I realized an MLM business is no different than any other business. One needs to focus on both words "Network" and "Marketing" and give both equal respect. Some people focus heavily on the Networking part but forget "Marketing".
I've started to use Building on a Budget and Magnetic Sponsoring concepts in my NM business and have found that people don't get involved so much because of the product but more because of what you bring to the table as far as marketing systems and support.
I have both products listed in my signature. you don't have to buy it as the link to the free videos itself provides you a good understanding of what is required to position yourself as my above paragraph.
If you do plan on purchasing it I can tell you that the measly $40 will open your eyes BUT your upline will not be too happy (atleast in the short term) beacuse the system is not duplicateable.
I wrote this post as a polar post to Bulmer's reply as I have exhausted the friends and family networking and realized i never really focused on marketing. My leads now are more qualified and open to hearing about my opportunity than the other way around.
my 2 cents if you plan on growing an MLM or Networking Marketing business.
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- It's interesting to see what the different motivations are by Age Category. I've noticed this around me:
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50 to 59yr olds: Motivator: Leaving a legacy
i've only gone that far in my analysis. Of course this is a braid generalization but I find that it helps direct my marketing to individuals in different age brackets. The product/service can be the same but the Marketing message (Benefit Statement) to a 20 year will revolve around "Money" vs. a 30-something would be on their "Self Image"
Network Marketing Business
- Hello all,
Recently, I had join a Network Marketing Business on a part-time basis. Does anyone here who has some knowledge on this type of business? I want to learn as fast as I can from all the gurus here
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- My advice is:
1) Go to the library and start reading business books (accounting, finance, etc.)
2) Go to your local community college and enroll in night classes
3) Join the local Chamber of Commerce
4) Network / Network / Network -- through the above sources.
Once you have spent two years doing the above, then look for a 55 - 60 year old business person that is looking to reduce their time in the business. Then you can work on a sweetheart financing option.
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