One of the most complicated aspects when looking at any network marketing company is their pay-plan. How easy is it for you to explain your companies compensation program.
This subject came up this week while talking to an individual who was sucked into another company when another individual stated that they would make more money with their company.
Studies have shown that 4 out of 5 network marketers do not understand their compensation plan well enough to explain it. If you don’t know how it works then it becomes very easy for someone else to say you’ll make more money with them.
Network Marketing compensation plans from the various companies are often quite confusing, some it appears are intentionally done that way. Generally they fall into a few categories and slightly different variations of these;
Binary pay plan, Unilevel pay plan, Breakaway pay plan, and Matrix pay plan.
In network marketing we earn commissions from our personal sales, and from our business associates sales in the from of overrides. This is where it gets complicated.
Many companies call commissionable volume by different names such as bonus volume, point volume etc… This makes it difficult for someone new to the industry to actually compare different companies.
Many companies further complicate their pay-plans with matching check bonuses, which make your income harder to calculate since it is based on something you have no control over!
It’s no wonder people fail in network marketing, if pay-plans are so complicated we don’t even understand how they work. It really illustrates why educating yourself is so important, before you join any network marketing company.
With many network marketing companies offering what appears to be essentially the same products wrapped in a different label locating and identifying all of them is truly difficult.
Finding unbiased opinions is even more difficult, everyone will tell you theirs is better then everyone else’s right? I’ve often written, that getting started is way to easy and it should be more difficult.
Which is one of the reasons I’ve worked with and recommend Leaders Club for someone completely new to network marketing. A member has access to training which helps guide you to:
- Researching & Finding A Winning Network Marketing Opportunity – Part 1
- Researching & Finding A Winning Network Marketing Opportunity Part 2
- How To Make Sense of Your Comp Plan And Profit From It
While they do not recommend any particular company, they can and do help you learn how to do your own analysis.
