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A Network Marketing Compensation Plan and How it affects YOU!!!

How will a network marketing compensation plan affect you???

How do you make the right choice for your lifestyle and pocketbook???

One of the first considerations you have to make is:

-how does the company's mlm pay plan compensate it's representatives???
AND
-how do I know this will benefit me???

First, I will describe these plans, and then, you can decide for yourself.

Matrix MLM Pay Plans

There are basically two main types of network marketing compensation plans...
...with many varieties of each.

* The first of these mlm pay plans is a matrix plan.
* The second of these mlm pay plans is a binary plan.

The main difference between the two plans is WHERE you place people in your network marketing company organization.

In matrix network marketing programs, everyone you recruit is underneath you.

This would be the first level of your organization.

The second level of your organization will be the people that your recruits bring into the company.

The third level is the level for future recruits of your recruits…

Got that???

Here is a crude example of a matrix mlm pay plan:

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In these type of mlm pay plans, you usually get compensated at a different rate depending of the level beneath you. For example, you will get paid 1% of your first level, 2% on your second level, and 3% on your third level. Many of these mlm pay plans will only pay so many levels deep, and some will have a breakaway model, in that, as your organization grows, a piece can break away if it reaches a certain level. At that point, you no longer get commission on that part of your organization. It has broken away from you and your team. These are things to look for with this type of network marketing compensation plans. Also, remember that there are many varieties of matrix mlm pay plans.

This type of network marketing compensation plan is good for people who like to bring lots of other people into their organization. You have to continually bring people into your organization, and have others who are doing the same, to build with these types of network marketing programs.

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"Matrix? Now, I'm not talkin' about the movie Baby...I'm talkin' about real pay plans to rake in the cash! That's my kinda flick, Dahling!"

Binary MLM Pay Plans

The second type of network marketing compensation plan is a binary mlm pay plan. This plan is built on a matrix of 2. It only has two legs. You recruit 2 people, and everyone else you recruit goes below those 2 people. With this type of network marketing program, you are not compensated according to the level, but according to the total sales of your organization. In other words, in matrix mlm pay plans you are paid based on the purchases of a particular level in your organization, but in binary mlm pay plans you are paid commission when you reach a particular dollar amount or point value, regardless of the level. One of the advantages of this network marketing compensation plan is that it encourages recruiting, because you get paid according to volume, not level. You do have to maintain balance in your structure, which is another way that recruiting is encouraged with these types of network marketing compensation plans. Here is a crude example of a binary mlm pay plan:

In this type of network marketing programs, you can CHOOSE where you want to put a new person in your organization for maximum income impact. Your main goal is balance, so helping the people below you to continue the recruiting process only makes it easier to keep things balanced. BUT, if someone is not interested in recruiting, your recruits or one of the upper level recruits can go under this person to keep your organization balanced.

Sometimes companies that have binary network marketing compensation plans will also provide hosting bonuses! This is an incentive of these types of mlm pay plans to continue to find home business leads and recruit people into the company. With these types of network marketing programs, you can ultimately build a large business with 2 people, who recruit 2 people, who recruit 2 people, who recruit 2 people, and so on... and continue all the way down the line. If someone does not want to bring others into the company, you can recruit another person to build that part of the organization.

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"Binary pay plan? Recruiting 2 people, who recruit 2 people, who recruit 2 people...Everybody knows 2 people, if ya know what I'm talkin' about!!! I give this compensation pay plan 2 THUMBS UP!"

Unilevel Compensation Plans

There is a third plan which is a type of combination of both a matrix plan and a binary plan. It is called a Unilevel or a Forced Matrix. It is basically a limited matrix plan. An example of a unilevel plan is a 5 BY 7 Matrix. With this plan you can only recruit 5 people, who can only recruit 5 people, and this can only go down 7 levels for your compensation. The disadvantage of this plan is that if you place people further away from you than the 7th level, you will not be compensated with commissions.

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"Don't get confused with all these options. That's why I've researched each and every network marketing compensation plan, so I can have a choice on how much money I am able to make, and how I'm going to build my business, and now, SO CAN YOU!"

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