Yoli Founder Daren Falter article “MLM Comp Plans Explained.”
Network Marketing Comp Plans
How to Scrutinize an MLM Pay Plan
PART I: What is an MLM Compensation Plan?
By Daren C. Falter
As I write content for the network marketing industry, I often forget that a large percentage of my readers do not have any experience with or knowledge of the network marketing model. For clarification, I want to review the basics of network marketing compensation plans and how they work. Network marketing incorporates a system of paying independent distributors not as employees of a company, but as independent sales agents. All MLM distributors are paid commissions on the products they personally sell, and on the products their sales force (or downline) sells. The formula for paying distributors is commonly referred to as a network marketing compensation plan or pay plan.
Distributors earn commissions when they purchase product wholesale and sell it retail. They also earn commissions on any products purchased by or sold by distributors they “sponsor” into the business. These are called bonuses. To sponsor a new distributor simply means that you’re the one responsible for introducing that person to the distributorship. There are usually special bonuses and recognition associated with the sponsorship of new distributors. As you accumulate more distributors, generally you will produce a larger “group sales volume” and with that comes a larger commission check. Ultimately you are paid not just on your own personally sponsored distributors, but on the distributors they sponsor, and on the distributors they sponsor, and so on for multiple generations. The number of generations paid and the percentages paid on each of those generations are determined by the company’s compensation plan.
The word upline refers to distributors positioned in the compensation above you including your sponsor, and their sponsor, and so on. The word downline refers to everyone below your or your sales force. Retailing simply refers to the process of selling the company’s products or services at a retail price.
As I progress through these articles, I’ll be getting into some of deeper concepts that may confuse those new to network marketing. I apologize for this in advance. I wanted to cater some of this chapter to veteran network marketers who are trying to sort out the different nuances of MLM compensation plans. I’m happy to provide training on these ideas to my readers.
About the Author
Daren C. Falter is the author of the network marketing industry-wide best seller How to Select a Network Marketing Company. Daren has been a consultant to the network marketing industry for over 12 years and a student and participant for over 20 years. Daren has built downline organizations into the tens of thousands of distributors with several different companies. Daren is a popular convention speaker and trainer. You can visit Daren online at his blog at www.networkmarketingreview.com. You can also order Daren’s best-selling MLM book at www.networkmarketingbook.com.
Daren recently launched a new network marketing company, Yoli, Inc., near Salt Lake City, Utah. Daren and his four partners are excited to introduced the worlds most nutritious beverage using patented BlastCap™ Technology. For more information about Blast Cap Technology, Blast Caps, or Yoli, visit Yoli at www.prelaunchinsider.com.
Copyright ©2009 DC Falter Marketing, Inc. ALL RIGHTS RESERVED
ATTENTION: Breaking News!
Daren Falter will be launching a new company called Yoli. We will be introducing an incredible new nutritional formula in the form of a delicious functional beverage using Mikel Anderson’s patented Blast Cap Technology. The founders of Yoli are Robby Fender, Daren Falter, Rick Eisele, Corey Citron, and Michael Prichard. To find out more about Yoli Blast Cap Technology, visit www.prelaunchinsider.com
Kingsley Ennis is one of the few “hand selected” FOUNDING DISTRIBUTORS that are helping to launch this new company … and you can join him and one of the fastest growing teams in all of Yoli at the very beginning of this great network marketing adventure!
With a background in the Seminar Industry and 12 years of Noteworthy Success in Network Marketing Kingsley is the Author of “Split Second Marketing” & “Your Extreme Advantage”. You can listen to them FREE at www.usahomebusinessexperts.com
QUESTIONS ABOUT YOLI? Email kingsley@goyoli.com or call 717-303-5710.
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