MLM Network Marketing Training -The MLM Success Secrets of Explaining your Compensation Plan.

MLM Network Marketing Training –The MLM Success Secrets of Explaining your Compensation Plan.

by Doug Firebaugh


That is what drives the MLM industry. The quest for a better life, a better future, and a better income.

Why did you join your network marketing company?

For something to do?

Yeah — right.

That is why 99% of all folks who enroll in MLM companies join — for a better lifestyle. And the hope of making more money is what drives the network marketing industry.

Every MLM company has a way they pay their distributors, known as a “Compensation Plan.” Or “Comp Plan”. Your company has one and that is how you are paid, by the volume you have created by the Comp Plan.

You go out, and create Volume of sales, and you get a certain percentage of the sales. Most plans focus on the sale, or movement of mlm products and services to the marketplace, and that is what drives the wealth vehicle of network marketing.

There are different types of Network Marketing Comp Plans, and there are many more Hybrid forms. But generally there are 5 different types, and you need to really understand the Plan that your company has.

The 5 Basic Kinds of MLM Compensation Plans are:

1)The Stairstep
2)The Unilevel
3)The Binary
4)The Breakaway
5)The Matrix

1)The Stairpstep

The Stairstep is a simple plan that has requirements that you must meet to get up the “Stairs of Success.” Each stairstep is a promotion based on Volume usually, and each promotion you make more money. Usually you must qualify each month for the rank you obtain to get paid at that rank. And the stairstep usually has a number of levels it pays down to.

2)The Unilevel

The Unilevel is a simple “Number of levels” that the MLM company will pay you, and usually there is no promotion or rank. You make money by getting a certain override off of the volume, and usually there is a requirement of volume to qualify for a check.

3)The Binary.

The Binary is an interesting design for a Comp Plan. It usually has 2 “legs” that you can have “Business centers” in, and you have a volume requirement to get paid on each leg. There is what is called “balance” in the Binary. You must balance the volume from each leg to make sure you don’t have a runaway leg. One leg explodes, while the other one sits idle. You must balance the two, and you usually can override the same volume a number of times with different business centers.

4)The Breakaway.

This plan has become somewhat unpopular in the industry, as you lose the business you build, once it gets to a certain level of success, and it “breaks away” to no longer be a part of what you get paid on. It usually is a stairstep type of Plan, but I have seen it in others as well.

5)The Matrix

The matrix is a computer driven plan that people are placed into your group by computer, and they go in the next available slot. Usually this plan is combined with some form of a Binary, and it does work well if there are a lot of people that are recruited. When you recruit someone, the computer searches down for the next open slot, and positions them there. There are some plans that allow you to override the computer’s selection if you want them to go a particular place in your downline.

Ok…so now you must see what kind of plan you have. See your upline if you have any questions at all, and get familiar with the plan you have and how it works.


DO NOT get too complicated on telling the mlm plan to someone. Keep it simple and make sure they understand that they CAN MAKE MONEY with it, as that is their greatest concern.

They are thinking, “Can I make money with this? And is anyone else doing it?”

Generally, when you talk about a Comp Plan, you will want to mention 4 general areas about it that many people will want to know about.

1)The First area is Retail Profit.

You must show the prospect that they can earn a retail profit with your products and services…usually it about 50%…

2)The Second Area is Team Overrides.

This is where, just like a Real Estate broker, or Insurance Broker, you can develop a team of Reps and help them become successful, and get paid a certain % of override off of them, just like the Real Estate and Insurance Brokers do. You are sort of a “Master Broker” for your company, and help others do the same thing. This is where most people have trouble with MLM. They don’t understand that what we do is just like a Real Estate or Insurance Broker, only better.

3)The Third Area is Leadership Bonuses.

This is where you help develop Successful Network Marketing leaders in your group, and you get an additional bonus or override form your group. You get rewarded by helping others develop their Leadership — the most fair compensation in the world.

4)The Fourth Area are Rewards…like trips and cars.

This area is a favorite among Network Marketers. Once you have reached a level of success, many companies will give you an additional car payment money, and also take you on trips that you can qualify for — a great incentive to work!!!

Be sure you understand the components of your MLM Comp Plan. This was just a VERY General Overview, and that is all.

Again…..KEEP THE Network Marketing Comp PLAN SIMPLE.

The More Simple you keep it, the more powerful it becomes, as does your MLM and Network Marketing Success!




doug Firebaugh / PassionFire Intl

© 2005 PFI / all rights reserved

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About Doug Firebaugh

Doug Firebaugh is the CEO of PassionFire International, a success and leadership development company for the Home Business industry. Doug is one of the most sought after speakers / trainers / authors and consultants in the Home Business / MLM profession. With over 25 years of Success and experience, plus a Billion Dollar Success story, his trainings and coaching have helped CEOs and Presidents of Home Business corporations to experience unprecedented growth. He has coached numerous organizations and downlines worldwide beyond their barriers and limitations, to a level of success they only once dreamed of. What can Doug Firebaugh DO FOR YOU?

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