Your MLM Compensation Plan – Question Four
On June 11th, my post was, 7 Questions To Know About Your MLM Compensation Plan.
It’s time to look at the answer to Question Four.
Question 4: What are the requirements to get paid?
For starters, you want there to be requirements to get paid. While lots of failing network marketers are scrambling to be first in the latest free to join, no requirement to get paid program, I’m telling you to avoid those.
If no product or service volume is created then there is nothing to pay out. That’s a serious problem.
If there are no requirements for a distributor to produce a minimum volume or sponsor a minimum number of people then most will not. Heck, most of them can’t, that’s why they are looking for such a program.
Some pay plans are effected severely when there are no minimum requirements for sponsoring. A good example is the matrix plan. If you sponsor someone on your first level in a matrix and they are not required to sponsor anyone to get paid, they probably will not. That means if you want to grow your business, then you have to sponsor for them and they still get paid. That would be for all of them, not just one or two. Expect a team of people who sign up and do nothing. If there are minimum volume requirements, then you can expect them to quit in one or two months if you don’t sponsor enough to get them to break even.
The same problem does not exist in say a unilevel compensation plan. It doesn’t cause you problems when someone does not sponsor and they don’t make money by forcing you to sponsor for them.
If people can actually get paid just for signing up and letting someone else build for them, then they will sign up in all such programs and make money from each one. Of course they never make any money. The programs will not work.
When you have programs with very low monthly volume requirements like $10, you get people with no money and no skills along with a few internet marketers who recruit but can’t train so everything falls apart after a while. A well known $10 per month program pays you $1 per month per active person. So you need 10,000 people in your pay line to earn $10,000 per month. That’s close to impossible for most people. And don’t forget about our answer to question 3. You only get paid on the people in your pay line.
So you look for programs with higher monthly volume requirements. There are many other variables so there is no perfect monthly volume requirement. Too low and you will find it hard to make any money. It just takes too many people on your team. To high of a requirement and you run the risk of limiting who will join.
The key is there has to be volume created. You don’t want people who create no volume. And watch how a compensation plan can be affected by having no sponsoring requirement.
A big big secret. Listen up. If you have a product that can truly be retailed, then anyone can produce volume and meet minimum volume requirements. The catch of course with most companies is that the product can’t be retailed. Only distributors buy the product. In fact you will have some people produce huge amounts of volume driving up your total group volume and requiring fewer people to produce high incomes.
Another catch though, even if you have a product that can be easily retailed, you have to reward the retailers are they will not keep doing it. That is a problem in most binary plans.
The next question, #5, What are the requirements to get paid on all of your potential pay line?
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