What is double compensation?

What are the pros and cons of different MLM compensation plans?

• What are the pros and cons of widely used MLM compensation plans.   Some of the widely used plans seem to be : Forced matrix compensation plan Binary compensation plan Unilevel and stair-step breakaway compensation plan A few key issues that come to mind are long term incentives for distributors and ease of understanding of the plan.

• Answer:

  Here are some of the gotchas I've observed in various comp plans in my research. Any plan with forced placements, whether its binary, trinary, stairstep, whatever: - Lack of flexibility makes it difficult or impossible to do team building. If you find a rockstar to add to your team where would you want to place him/her? My answer is this: wherever he/she will be most effective. If that means working with another powerful leader, then they go into that leaders team. If it means they would be best used starting a whole new leg of my business, then they should go there so I can support them with others later. Most of the forced systems don't allow this kind of team structures/placement strategies. Another one is more difficult to describe, but I refer to it as "upside down commissions". Basically any plan where the commission structure starts VERY shallow in a person's first gen, and then increases slowly as it gets deeper. This rewards ONLY the longest lasting reps, and certainly isn't good for new recruits. I find that this feature is usually side by side with large initial recruit investments. Why? Well think it though... new recruit pays a large signup fee, everyone up gets paid, new recruit gets very little % on his first few customers, everyone higher up gets more than them... new recruit decides to quit, no one cries about it because they a: got paid when they first joined and b: got paid more than them on every customer they managed to bring in before they quit, and c: get to keep all the left behind customers as long as they will stay. Rinse and repeat This style of comp plan requires a heart of stone. Constantly telling those new guys they can do it when you know they are most likely going to wash out and fail has to take a toll on a compassionate person. They defend this style with "You have to put in your time to get to the big paychecks, but then its worth it". Another gotcha to pay attention to: "3 and its free" Different companies have different plans and cute sayings to describe it, but the concept is simple. Get X other suckers to buy this stuff so you don't have to anymore. If the core of the comp plan is to STOP buying the product, what does that tell you about the value and/or authenticity of that product? Why does everyone want to stop paying for it? How do you get paid in your commission structure when no one is paying for their products? This feels like a huge red flag to me, because it is just like saying "they won't stick around if they have to keep buying this crap." True residual income is attainable only when you have a product that drives repeat sales because it has value to the consumer. Anything else is PASSIVE income at best, PASSING income in most cases. And lastly, not a feature of any particular comp plan style, but any business opportunity that emphasizes "get your spot, then just sit back and let us do everything for you" is preying on the lazy nature of people looking for get rich quick and probably should be avoided. No one is going to build an amazing life changing residual income FOR YOU. It's called netWORK marketing for a reason, netNOTHING marketing doesn't produce any results.