MLM, or multi-level marketing, plans are different compensation structures used by network marketing companies to reward their distributors for selling products or services and recruiting new distributors. Here are brief descriptions of some common MLM plans:
Binary plan: Distributors are only allowed to have two frontline distributors, and commissions are paid based on the sales volume of the weaker leg.
Unilevel plan: Distributors can recruit as many frontline distributors as they want, and commissions are paid based on a set percentage of the sales volume generated by their downline.
Matrix plan: Distributors are restricted to a certain number of frontline distributors and a certain number of levels in their downline. Commissions are paid based on the sales volume generated by distributors within their matrix.
Stairstep/breakaway plan: Distributors advance through different levels as they achieve certain sales and recruitment goals. Once a distributor reaches a certain level, they “break away” from their upline and become responsible for their own downline.
Hybrid plan: A combination of two or more MLM plans.
Each MLM plan has its own advantages and disadvantages, and what may work for one company may not work for another. It’s important to carefully consider the compensation structure and do your own research before joining any MLM company.
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