Best MLM Compensation Plans: Is Being A Sellout Worth It?
Would You Like to Know If Joining MLMs are Worth It?
Are you interested in the multi-level marketing MLM business opportunity?
Is it a scam or a legit opportunity?
In this article, we’re going to review and decide what really is the best MLM out there.
We’ll talk about which MLM is the right online business for you.
In the end, I’ll answer some of the most frequently asked questions regarding MLM and its compensation plans in general.
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Table of Contents
MLM Review: What is an MLM?
Is this another one of those network marketing strategies that simply wants people to sign up, buy a product kit and sign up their family and friends to follow suit?
The truth is, most MLMs show people how to succeed as a network marketer but in reality, most members barely earn anything promoting their products.
Honestly, can you get rich with a measly commission from products that you can get cheaper from Amazon?
If you want to really earn much money online, check out our #1 recommendation here.
But to give you a fair and honest review….
Some MLMs do provide helpful ways for people to make money online and get commissions.
In the end, I will answer some FAQs about network marketing as a whole.
And most importantly, I’ll show you the exact system I used to build my own internet marketing business to over $40,000 a month in mostly passive income.
This system made me swear off Network Marketing for good, because it uses some of the same skills but in a much more powerful and profitable way!
For now, let’s check out MLMs and their Compensation Plans!
MLM Review: Are MLMs a Pyramid Scheme?
You’re reading this article because you most likely want to earn money.
Because many people fall for scams, I’ve committed myself to review various MLMs.
This article seeks to make things clear:
- Is it worth it joining MLMs?
- Can you really get rich with MLMs?
- What is the best MLM compensation plan?
- Are all MLMs a pyramid scheme?
We will look at the various aspects of the organization to help you determine if it’s best for you. And I will give recommendations in the end — so you can truly make a wise decision.
Multi-Level Marketing Review: How do MLMs work?
So, how do MLMs work to bring home the bacon?
Basically, multi-level marketing is a business model that companies use to bring their products to people via sales representatives.
These sales reps usually work from home and buy the inventory to sell. The multi-level part deals with their capacity to recruit and train people into their downline. When recruits generate sales volume and also recruit below them, every person above them earns a commission.
Earned income comes from commissions from personal sales volume plus a share of the sales gained by other reps that you have recruited.
MLM Companies: What are the top 5 companies in 2021?
Here are the Top 10 MLM companies with the best revenues earned:
Who is the number 1 MLM company?
AMWAY has been the #1 Multi-Level Marketing company worldwide for many years. Birthed in 1959, Amway has then developed various products that people have learned to love — household cleaners, laundry detergents, weight loss shakes, beauty care, and more!
Compensation Plan: What are the various types?
Before discussing the best MLM compensation plan, let me show you the different types. The first four are the most common payment plan types are:
Stairstep Breakaway MLM Plan
What do MLM companies do when they are focused on efficiently increasing distributors’ sales?
They use the Stairstep Breakaway Plan. When an affiliate reaches the topmost rank, he and his team “breaks away” and are directly added as a new tree under the admin.
Unilevel MLM Plan
The Unilevel compensation plan has a single business level where all sponsored affiliates are directly put in the first level. All recruiting work done by a distributor directly benefits him since there is no spillover. The Unilevel Plan is also called the “universal plan” because it is seen in all compensation plans.
Matrix MLM Plan
This is a unique one. The Matrix Plan has fixed depth and width having the first two affiliates on level one (front line). When the front line is filled, the other affiliates get added to the next available slot on the tree (called spillover). To increase group sales volume, MLM companies rely on the Matrix plan.
Binary MLM Plan
Binary compensation plans consist of two legs (right & left) or subtrees under every affiliate. When you add subtrees, a binary tree is created. Later on, with new recruits joining, they flow onto the downlines or better yet, the next business level — and continue to unlimited levels. The Binary compensation plan is quite easy to decipher which helps in getting more recruits.
Home Party Plan
This plan is used to increase product promotion as affiliates invite people to space (usually a homely place) and sell the products with a proper introduction and complete presentation.
This is a famous one.
A “board” is a new tree created for certain members who qualify for specific criteria. A compensation plan may have multiple boards based on the company’s policies. This plan is also called the recycling matrix plan.
To get good retail income and commissions from downline efforts, try the Generation Plan. This plan is structured like a Unilevel Plan but with various generation levels — each with an affiliate and his acquired clients. This plan seems to work great for e-commerce businesses.
Monoline MLM Plan
Also known as “Linear Plan” or “Single Leg Plan,” the Monoline Plan is truly simple and easy to understand. It has a single-line structure with unlimited levels. Its simplicity makes it popular and a usual choice for most businesses.
Best MLM Compensation Plans: What factors make for the BEST plan?
Question: What is the best MLM Compensation Plan?
Truth is, there is no perfect MLM Compensation Plan. Each has its strengths and weaknesses. Do you think the Mary Kay compensation plan will work at Avon? Or the Avon plan with Amway? Definitely NOT!
The answer is all about being the PERFECT FIT. Is the plan aligned with the company culture and system — direct selling, pricing, field training/culture, leadership development, etc?
Each multi-level marketing company is unique in its approach towards direct selling. Avon, Nu Skin, and Mary Kay may commonly sell beauty items, but they are different in so many ways, too.
So, MLM companies with the BEST and PERFECT FIT actually select one of the primary compensation plan types, use it to establish stable revenue, then use and align other plan types for growth. That being said, I will discuss the factors you need to look for in a great compensation plan.
MLM Compensation Plan: Building Blocks for the Best Plan
1. Customer-Sales Focus
It is important for MLMs to focus on retail sales to customers who are not also affiliates of the company. Why? To lessen the risk of scrutiny and action by the Federal Trade Commission (FTC). Great MLM compensation plans prioritize this.
2. Customer Commission or Profit
Early rewards boost the drive of affiliates. When they enroll a customer, they have to earn a commission when orders are placed — usually at 20% to 25%. But those companies who give higher percentages for higher volumes have enjoyed better results.
3. Ranks and Recognition
This is truly motivating. On top of commissions, ranks and recognition are crucial in a good compensation plan. When affiliates move up the different levels, they should also get a title for their rank, plus additional compensation.
4. Rank Advancement Bonuses
The best MLM compensation plans give a one-time fixed bonus when an affiliate moves up in rank towards a properly carved out career path. What a boost this bonus gives to hardworking members. Advancement means growth!
5. Strategic Compression
Strategic compression happens when an upline affiliate is compensated as if ineligible or inactive members were not present in the tree. This way, hardworking affiliates are still encouraged despite the inactivity of others.
6. Activity Requirements
If companies want to increase sales, they should establish activity requirements to reward desired behaviors. The goal is to increase sales, company profits, and affiliate retention.
7. Fast Start
The best MLM compensation plans start fast and strong. By rewarding new recruits, companies have seen great benefits on affiliate retention.
8. Career Path
An affiliate’s career path is the center of a good MLM compensation plan. Making sure that they have a future in the company motivates affiliates to work hard, stretch themselves to reach higher, and remain in the company. This path determines how affiliates will sell, recruit, lead, build their team.
9. Mentoring and Team Building
Building and mentoring a robust team must be rewarded. Since the whole MLM organization exists by the presence of each member, affiliates need to be appreciated for doing their part in team building.
10. Leadership Rewards
Company leaders are potent influencers. Thus, they need to be rewarded well for coaching, mentoring, and growing their downline.
11. Recruiting Rewards
Recruitment activities should also be rewarded, on top of compensation for sales volume. But, due to compliance regulations, recruitment should not be the focus of MLMs. Nevertheless, these bonuses can be the cherry on the top of your cupcake.
How do I create an MLM compensation plan?
I will give you 7 ways to create a good compensation plan for your business:
1. Understand Your Company’s Objectives
Before anything else, look into these key aspects of your company:
- Product type
- Product or service offered
- Corporate goals
- Cost to consumer ratio
- Ease of sales
- Distributor experience
- Room for incentives, etc.
2. Do Your Research
Study the terrain before entering it. Try to watch educational videos on compensation plans. Or read thoroughly on relevant subjects. These will give you a head start.
3. Know Your Numbers
Before you dive into compensating your affiliates, be abreast with the numbers game. Be familiar with your cost of goods, distributor price, retail sales price, etc. By knowing more, you will be more ready to face questions.
4. Choose an MLM Compensation Plan
Next step, you can now select from the various standard types of compensation plans which I have discussed above.
5. Hire an MLM Marketing Agency
Getting quite overwhelmed? Don’t worry. You can hire an MLM marketing agency to help set your goals, navigate through challenges and set realistic expectations. They will help you sort out the best compensation plans.
6. Consider an Incentive Program
Sometimes, there is really a need for that extra boost for your sales team. Why not consider an extra bonus or a profit-sharing program. Taking care of your team will ensure your success.
7. Be Ready to Make Changes
You certainly will make mistakes — despite your research work and preparation. At yearend, always take time to assess. Reexamine your plan and make changes if necessary. Are you still within budget? Is your team motivated?
Stick To What Works
Simply put — keep it simple. Yes, you can be unique but don’t go too far from the standard. Learn from the mistakes of other MLM companies. It pays to be wise and use the best compensation plans.
What is the highest paying MLM company?
AMWAY is currently the highest paying multi-level marketing company.
Why is that?
Check out the benefits they offer to affiliates:
Amway Benefits for Associates:
- Buy discounted products at distributor price
- Participate in Loyalty Program (loyalty points can be redeemed as products)
- Gain points for purchases
Amway Commissions and Bonuses:
- Commission: 3%
- Retail profit:15% of sales
- Income: retail profit + commission
Which MLM has the best compensation plan?
I will give you NOT ONE but 5 MLM companies that I believe have the best compensation plan. Here they are:
Products: Lifestyle brands (Nutrifii, Puritii, and Nucerity)
MLM Compensation Plan: Ariix uses the industry’s first multiline plan called Activ8. This gives you unlimited width and depth, unlike matrix plans. What more, you get a 50% payout — the highest commission structure right now.
Lastly, they use an algorithm that computes cost-of-living-increase to adequately support you over time. Activ8 also allows members to enroll under one affiliate and then again in a separate team.
This promotes cross-line support and team building. Cool huh?
Indeed, Activ8 is one of the best MLM compensation plans right now.
Products: Biohacking products (fitness, nutrition, beauty)
MLM Compensation Plan: There are 2 ways for you to join —
- Preferred Customers – purchase products wholesale
- Distributor – gain commissions via sales and from your downline
Initially, the pay plan can be complicated. But if you sell well and are up for it for the long haul, then you can make good.
You can earn income through these avenues:
- Retail sales
- Smart start bonus
- Launch bonus
- Royalty commission
- Generational matching bonus
- Elite bonus pool
- Rank achievement bonus
- Business center
3. Total Life Changes
Products: Lifestyle products (beauty, skincare, hygiene, essential oils)
MLM Compensation Plan: Upon joining as a representative, you can begin earning on products sold. They use a hybrid binary plan. Here are ways you can earn:
- Retail profits and commissions
- Fast Start Bonus
- Binary pay
- Matching bonus
- Lifestyle bonus
Products: Lifestyle products (weight loss)
MLM Compensation Plan: When you become a brand promoter, you gain 20% on client orders. And you enjoy free products when customers join the auto-ship program. Via the unilevel path, you earn up to 8% per level of your placement tree. And to top it all, there are cash bonuses towards luxury cars and vacations.
Products: Lifestyle products (renowned line of essential oils)
MLM Compensation Plan: Here are the three ways you can earn:
- Retail profit
- Fast start bonus
- Power of 3 bonus
DoTerra doesn’t only pay well. They’re also the fastest-growing MLM worldwide!
Which is the fastest growing MLM company in the world?
DoTERRA has spread like wildfire since its founding in 2008. Within seven months, it reached $1 million in sales! In 2012, doTerra was hitting $1 million sales days and by 2015, it reached a whopping sales revenue of $1 billion!
But it doesn’t stop there. DoTerra has grown to more than 3 million affiliates of “Wellness Advocates” and by yearend 2016, they gathered 30,000+ affiliates in a convention!
Can You Really Make Money With MLMs?
Yes, You can!
There’s a lot that comes along with Network Marketing (MLM) that many people struggle with.
In fact, check out our Top 5 Reason Why Most Network Marketers Fail.
Now, don’t get me wrong…
You can certainly make money with MLM, but if you’re gonna put in the amount of grueling work to do this business (which, trust me, isn’t easy), you might as well bring in some REAL money while you’re learning the ropes.
The program that helped skyrocket my online business to over $40,000+ per month is so simple that making money really does become second nature.
Bottom Line: Is Joining MLMs Worth It?
So, is it worth joining multi-level marketing with a good compensation plan, like those I mentioned? We can clearly see that not all MLMs are scams. They sell legit products and pay affiliates properly.
And those companies I mentioned DO PAY big bucks.
I wouldn’t mind recommending them to a friend — especially to one who really wants to earn good money via the MLM structure.
But are these the best business opportunity for YOU?
I want only the best for YOU. My goal is to help you gain financial stability.
When it comes to building a business, you have plenty of options.
And even if you’re dead set on becoming an MLM marketer, you’ve got way better options.
Keep in mind, I don’t get paid to promote any of the programs I review. I think the MLM companies I mentioned have a great business model, but you could end up leaving way too much money on the table.
What Is Our Top Recommendation For Making Money Online In 2021?
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, it’s all digital.
Where MLMs falls short is in scalability.
There’s only so much time in a day and there’s only so many people you can reach to sell by yourself.
MLM companies know this!
Which is why they push so hard for you to recruit for your downline…you can’t get rich with it as a one man/woman show.
But what if you could make even more money off of little local websites without having to spend hundreds of dollars on overpriced products and a bunch of time recruiting people to sell under you?
With this digital real estate program, you can make recurring monthly income without constant sales to your friends and constant recruitment!
Sound too good to be true?
Of course it does!
But it isn’t…in fact, business owners wish they had this skill!
All you have to do is build and rank a LOCAL website and forward the jobs off to a business owner in town, you could even email it to them!
This works for literally any service based business, tree service, plumbing, towing, etc.
How do you get paid and how much?
Simple, after you forward the jobs off to a business owner and he makes some money off of them, you simply ask to make the deal beneficial for each other.
A fair price to charge per lead, depending on the industry is 10-20%…let’s just use the tree service industry for example and go by worst case scenario.
Let’s say you build and rank the site and only 10 jobs a month come in. The average tree service job is anywhere from $500-$2000!
That means at bare minimum you have an asset worth $500 a month!
See why they call it digital real estate now? That’s a rent payment.
The great thing is how easy it is to scale. You don’t have to worry about:
- Your upline getting paid before you
- Begging your friends and family to buy from you
- Recruiting people all the time
Remember with MLMs, You only get what’s left of the pie if you meet a monthly quota…
The course we recommend actually allows you to collect HUGE FLAT RATE DEALS. Truly passive income!
The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.
You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.
Once the training program is completed you will also have access to a Facebook group much better than MLMs in our opinion. This group is much more active.
Unlike MLMs, where you’re getting maybe $10 per sale, you could be getting 10-20X THAT.
A business will always want more leads and another job. In fact it doesn’t even matter that the job isn’t coming from their website name…they see it as it is…expanding digital real estate.
Unlike MLMs, more people have been able to walk away from their 9-5 job as well.
Digital real estate allows you to have total passive income with most of your day being spent WITH your friends, NOT selling to them.
Now, I know you probably have tons of questions…