MLM Comp Plan Ups And Downs - The Uni-Level

In my previous post "MLM Comp Plan Ups And Downs - The Binary" we looked at the attractive and the not-so-attractive sides of the Binary compensation plan. Now let's see what turns people on and what turns people off about the Uni-Level.

WARNING: fail to ask these 3 questions at your own risk!

1. How much volume do I need to make a given income goal?
2. How many people do I need to make a given income goal?
3. What do I need to do to make a given income goal?

Uni-Levels typically allow infinite width and very limited depth. Few uni-levels ever exceed 4 or 5 levels of sponsorship.

Here are the Uni-Level turn-ons.

1. It's a great "one-trick pony" plan: one product companies like this comp plan.
2. It promotes personal sales: the highest percentage of income is earned from front line sales, usually 20% to 30%.
3. It drives the behavior of product movement:
4. This plan eliminates manipulation: unlike the matrix or the aussie 2-up team members are not "spilled" or "given" to the upline sponsor, so there's no system cheating.
5. Simplicity: it's easily explained and understood.

Here are the Uni-Level turn-offs.

1. It's just so shallow: If your lowest level team member sponsors someone you get NOTHING.
2. It discourages upline support: second, through final level commissions are usually much smaller than personal commissions. (ex.: levels 1 through 5 pay 30%, 10%, 5%, 3%, 2% respectively.)
3. One-time commissions: residual income is non-existent.
4. There's no rest: one product means reps are constantly hunting for new customers like vampires for new blood.

The uni-level comp plan offers no pay-off for unscrupulous manipulation. Plus upline support is often harder to find than an honest politician. And the lack of back-end products creates a "sell, sell, sell" environment with zero provision for long-term wealth.

On the other hand, uni-levels are easy to understand, and sales people love them because they pay best for personal sales.

If you want a work at home sales job, then the Uni-Level compensation plan is perfect for you. If however, you are a future oriented person who wants to build a powerful business for a little while and then enjoy the rest of your life, then move on.

I appreciate you,

Bill Tessore

MLM Comp Plan Ups & Downs - The Aussie 2 Up

In my previous post "MLM Comp Plan Ups & Downs - The Matrix" we examined the advantages and disadvantages of that type of network marketing compensation plan. Now let's see what we can learn about the Aussie 2 Up.

In the Aussie 2 Up compensation plan you get to give away your first two recruits to your sponsor. Then she gets paid the commissions for the work you just did. Most entrepreneurs join a company with an Aussie 2 Up comp plan for it's big up-front profit commissions.

WARNING: Three Critical Questions You Must Ask About Any Compensation Plan

1. How much volume do I need to make a given income goal?
2. How many people do I need to make a given income goal?
3. What do I need to do to make a given income goal?

Those considering building with such a comp plan should be aware of the down side of the Aussie 2 Up so they do not get blindsided. Let's take a look at the good and the bad of the Aussie 2 Up.

The good side of the Aussie 2 Up.

1. Ideal for sponsor monsters: since they have the Green Lantern ring, the power suit, etc. they do well with this plan because they recruit lots of people who give their first two recruits up to them. So the sponsor monster can make lots of money.
2. It's shark territory: shrewd people will place duds or fictitious names into their first two positions so that when their next two positions come along they can place super recruiters there & be in fat city.

The bad side of the Aussie 2 Up.

1. Big ticket start-up: often from $2,000 to $20,000.
2. Stand-alone product: no back end sales are being made for residual income.
3. Works against industry averages: Average network marketers without a system for duplication sponsor 2.7 people in their entire career. That average person then gets paid on 0 to 1 person they place into their downline.
4. Treachery is a two-way street: your sponsor may help you build so he can take your two best recruits (then abandon you), or you can give him your dog and cat, or your toddler twins … and then work with real builders.
5. No residual income: no sponsoring = no income.
6. Against the numbers again: about 0.01% of the world's population can make an Aussie 2 Up work.

Building an Aussie 2-Up comp plan is a back-breaker … even for the 15% of the population that like it. Oh, and you can forget about duplication.

An extremely high ticket one-time-order product with this plan is the norm. Back end products for residual income don't exist.

The only equality in an Aussie 2-up comp plan is the chance that either the recruiter or the recruit can cheat the other out of their due commissions by manipulating the plan's flaws to their own advantage.

Can you recruit at will? No? Well, then avoid the Aussie 2 Up compensation plan like the plague. The numbers are just not in your favor.

I appreciate you,

Bill Tessore

MLM Comp Plans - Why MLM Companies Love The Matrix

In my previous post, "What Is Breakage In A MLM Comp Plan?" I explained what breakage is and how companies use it to pay reps less than what they claim … often a lot less. Now let's take a look at the Matrix compensation plan to see why it is so popular with some companies.

Here are the basics of a matrix.

Let’s say you’re in a company with a 3 x 5 matrix comp plan. In this plan you have 3 recruits on the 1st level, 9 on the 2nd level, and so on down 5 levels. A 3 x 5 matrix pay-line is complete at rep number 363.

Here's why network marketing companies love matrix type plans.

• They're easily understood so lots of people join.
• "Big money" claims attract new prspects regularly.
• "Spill-over" appeals to impulse buyers.
• 90% of network marketers are blue personality types, so the matrix plan plays well to a huge number of prospects.
• Reps who receive "spilled positions" are paid fewer recruiting bonuses on a full matrix.
• Drop out rates are high, so fewer residual income is paid out.
• Earnings "outside the pay-line" go to the company, so residual earnings are limited.
• Though some matrix plans offer unlimited one-time bonuses for sponsoring outside the pay-line, very few reps ever earn them because most reps sponsor an average of 2.7 people in their network marketing career.
• Since a matrix can have any number of "first level positions" and "levels of depth" the company can determine if they want to attract mostly recruiters, or average networkers.

MLM companies like the matrix comp plan because there are many structural variables they can use to their advantage. Pay out caps and the ability to choose to attract sponsor monsters or average Joes are just a couple things in the company's favor.

The built in income limits of a matrix attracts fewer networkers capable of building stable team growth. Most of the folks who join a company with this type of comp plan never do anything with it because they expect spill-over to do the work for them.

If you are a sponsor monster, then a matrix comp plan is perfect for you. However, if you are like the vast majority of networkers who want to build a team with real residual income potential, then you might want to keep looking.

I appreciate you,

Bill Tessore