Best Comp Plan

The network marketing industry basically has 5 different types of comp plans.

What’s best for you basically depends on what you are looking for.

Here are the comp plans used by 99% of all network marketing companies today:

1. Unilevel (Stair Step and Stair Step Breakaway)

The unilevel is considered the “old school” plan used by companies such as “Amway” and “Herbalife”. It is a proven plan. However, because of the work in managing multiple legs and because of difficulty growing group volume requirements (in order to get paid higher levels of compensation), this plan has become unpopular in recent years. However, many companies continue to use a Unilevel type of plan. The advantage of unilevel plans is that they allow for distributors to get paid with only just one leg, however, they severely limit the compensation paid to distributors to just one or two levels of growth, unless the distributor manages and grows a minimum of three legs in most plans, (some require six or more legs to reach top compensation levels). Unilevel plans sometimes also pay generational bonuses, which add income to top producers.

2. Binary or Two Team Plan
Like the Unilevel plan, the binary is also a proven plan.The binary plan or two team plan has been the most popular plan for the last 15 plus years in the industry. The binary plan allows for growing organizations with massive depth and perpetual leg growth. However, critics of the binary complain that building two teams is difficult for the new person, and that balancing legs is difficult. The two team plan requires two legs to grow before a distributor earns a check. The major advantage to the binary plan is that it allows team volume to accumulate month after month (no volume flushing at the end of the month), thus producing larger and larger checks quicker and faster once 2 legs become established. This unique feature of the binary plan called “banking volume” and it is not available in any other type of plan other than the binary plan. No other plan has produced more six figure income earners faster in the industry than the binary plan. Some of the largest companies in recent history have employed the binary plan including Usana, Vemma and MonaVie.

3. Forced Matrix Plan
The matrix or forced matrix is a popular plan that usually allows distributors to make a limited amount of money even without sponsoring anyone. The forced matrix plan allows for “forced” growth within an organization. The matrix plan forces “spillover” to distributors on lower levels. Historically, the forced matrix plan has been known to attract those who have never made a commission check or a profit in network marketing, along with those who employ a “wait and see” philosophy of marketing. Forced matrix plans are popular with smaller companies, but because of similarities to illegal pyramids, forced matrix plans are also scrutinized more by regulatory agencies. Companies using a forced matrix include Ultra Global and Liberty Health Network. Although there may be a company with a forced matrix comp plan that has generated over 50 million dollars in revenue annually and has not changed the plan, we don’t know of any company that has grown significantly large and continued to keep a forced matrix plan.

4. “One Team” or “Single Downline” Plans
The “One Team” or “Single Downline” plans recently became popular and then less popular within a time frame of three years. The “one team” plan puts everyone that joins the company in one “straight line”. The company claims that “everyone that joins the company after you is in your downline” and that you will get paid. However, the companies that utilize this type of plan fail to mention that the bonuses paid on company wide volume are dependent on how many people you sponsor and how much group volume you have. In effect, these one team plans are simply unilevel plans with global bonus pools paid based on the size of each distributor’s group volume. The most recent company to use this plan was Mandura.

5. “One Up” and “Two Up” Plans / Perpetual Leverage Plans
The “One or Two Up” plans are also called Perpetual Leverage Plans. These plans require you to sponsor one or two people and “pass them up” to your sponsor first. These “pass ups” are usually called “training sales”. After you have “passed up” your first one or two distributors to your sponsor you can begin to keep the next people you sponsor in your own dowline and receive your own “pass ups” from the next distributors you sponsor. These plans usually realistically require you to sponsor several people beyond the one up and two up before you generate consistent income. These plans are usually used for high ticket, one time payment products. These plans usually only produce two kinds of distibutors. Those that make a lot of money and those that make none at all. Companies who have employed this type of plan include Global Resorts Network, WMI, Resorts360 and Coastal Vacations. Cash gifting plans have also used this type of “pass up” plan. Recently these types of plans are highly scrutinized by regulatory industries. Companies and programs that experience massive growth under One and Two Up plans have been historically curbed by the government.

Most companies rely heavily on one of the plans mentioned above. Some companies use a hybrid or mixed plan combining one or more features above. Recently some companies have also added a matching bonus to their plans which encourages team coaching and team development.

Which comp plan is right for you? It’s best to stick with proven comp plans, such as the unilevel and the binary plan. Those who promote companies without a binary comp plan often complain about it, however history has shown that it is one of the most lucrative comp plans available. The potential of each comp plan differs with each company. As always, it’s best to do plenty of due diligence and research before jumping into any company.