Best MLM Compensation Plans
In multi-level marketing or direct selling companies, choosing the best MLM compensation plan that suits your business’s value proposition is a tricky deal. Among the infinite possibilities and combinations, picking the best compensation plan in network marketing relies on the consideration of many factors. Some of the most important factors to consider while choosing an MLM plan are:
- Product/service category
- Product cost to selling price ratio
- Existing laws in the market
- Training & marketing methods
These factors function as core elements upon which a flawless MLM compensation plan is built. Epixel, the responsible network marketing software company, makes it easier for consultants and direct selling/MLM companies by providing them with the best MLM plan that is reliable, scalable and flexible enough to accommodate their growing business needs.
What do we offer?
Here are some of the major compensation plans and their variants as per demands. To make your decision-making step easier, we’re providing you with some useful data.
Types of MLM Compensation Plans
Here are the major types of MLM compensation plans and their features explained methodically with plan working calculations and demonstrations.
What is MLM Compensation Plan?
MLM companies build their businesses on specific commission structures (popularly known as compensation plans) based on their profitability interests. An MLM compensation plan is the foundation on which MLM businesses are built. Multilevel marketing is popular for its broad range of compensation plans, each having unique properties of its own.
Marketing in an MLM business model indicates the selling part, and compensations are the rewards for a sale from Personal Sales Volume (PSV) or Group Sales Volume (GSV). Usually, compensations are provided as commissions or bonuses.Commissions are provided based on PSV and bonuses for GSV or group efforts.
Each type of MLM compensation plan and network marketing plan does have a unique compensation structure. However, an MLM company mostly has a hybrid compensation structure i.e. multiple plans are used. Thus the same commissions/bonuses can be seen in different plans.
There are many types of compensations, and all compensations are supported in the Epixel compensation engine. We also support custom compensation plans as per the requirements of the direct sales company.
MLM laws compliant in Epixel MLM system
Network marketing/MLM companies need to follow certain laws and abide by them properly. Here is an 8-layer general MLM rule chart one must assure to make the business legitimate. Make sure you follow these rules. Mark the boxes accordingly and see how your business progresses.
|1||Real products to sell|
|2||Compensations for recruiting only(No compensation for product sales)|
|3||High joining fee than provided product kit|
|4||Constant price inflation|
|5||Products sales reach customers outside the network|
|6||Forcing distributors to recruit more people instead of more product sales|
|7||Frequent payout rescheduling|
|8||Too many discounts offered|
*The above law compliance factors are derived based on FTC rules.
There exist many such laws and rules in different regions of the world. As direct selling is a globally accepted industry with a $180.5 billion turnover, the customers are also spread globally.
Epixel MLM system is a customizable software engine suitable for all direct selling business groups. Our system is compliant to meet and process compensations based on these laws.
Quick calculations, faster payout!
Distributors become active when they get rewarded quickly i.e. schedule their payout in time. However, to decide what all compensations to provide them without shifting the company’s revenue is a tough call.
To assure that the company also gets profit alongside the distributors, Epixel provides MLM CALCULATORS. MLM calculators can quickly calculate or simulate the following,
- How much profit do you earn?
- Decide the right amount of compensation to reward distributor by balancing the company revenue
- Decide how many levels to set in a compensation plan for spillover
- Pre-calculate the values to set for startups
- Companies and consultants can review their plan easily
- Consultants can use simulators to advice direct selling companies about which plan suits best, switch to a new plan by making use of multiple plan calculators
In short, calculators are the primary things you can use to easily predict the future of your business based on the values.MLM Calculators
Similarly, we provide many useful tools to analyze and manage your business. As a decision-maker or a consultant, you can always refer our system to understand the value of the MLM package we provide. Feel free to contact us, we’re always there to help you!