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MLM Compensation Plans

MLM Compensation Plans come in a variety of shapes and sizes. Neither one size nor one shape fits all. As an MLM consultant who designs MLM compensation plans for network marketing companies, I appreciate the complexities and demands involved in doing so to make for a well integrated, functional plan tailored to a specific MLM company.

There is a philosophy behind each and every MLM compensation plan. Management and networkers must be cognizant of what it is and be able to communicate it to others. Compensation plan goals and objectives vary. Short term and long term considerations relative to those goals and objectives must be made. You can read about these and many other details you need to know about MLM compensation plans in my special report.

The sales, marketing and financial issues alone are numerous. They must take into account the nature and scope of the product line, the margins on the products, the ability to accommodate good retail sales’ payouts along with strong downline bonuses, international expansion issues, overhead, expenses and many more variables.

The administrative concerns must be addressed since no matter how great the MLM payout is for the independent networkers, if the programming is not done properly, erroneous bonus checks will be issued and the networkers will drop out of the MLM business opportunity. Also, remember that one mistake in a networker’s payout can cause many mistaken payouts made to that person’s upline. Timely, accurate, accessible reports are a must if networkers are to stay active in the MLM opportunity.

As an MLM consultant for over twenty years I have entrenched myself in understanding MLM legal issues so that I was always putting forth my best efforts to help ensure that any MLM compensation plan design provided would fall within the mandated legal parameters. (This is an important reason why I have been called upon to do expert witness work.) Of course no firm or individual can guarantee that any particular MLM compensation plan design is within legal parameters and won’t raise legal challenges since regulations vary from state to state here in the U.S., and from country to country. Also, interpretations of similar regulations vary from regulator to regulator. My clients are always told up front that they absolutely must have an experienced, reputable MLM attorney review the MLM compensation plan before launching and that the attorney has to have the last say regarding MLM legal issues, not my firm or any other support firm.

There are also many perceptual issues relating to how the MLM compensation plan is communicated. A strong functional plan can fail in the marketplace whereby the company has a difficult time attracting and retaining MLM distributors (“networkers”) because the MLM company does not properly communicate the plan nor does it train its networkers on how to do so.

This is why at MLM industry corporate conferences I have always spoken about the “tangibles” and the “intangibles” needed to make for a successful MLM company . Needless to say, the “intangibles” are often overlooked and in a very personal people-to-people business such as ours, some of those “intangibles” can be even more important than the “tangibles.”

Those MLM companies and networkers along with others making a living in the MLM network marketing industry should not be satisfied with having just a superficial understanding of MLM compensation plans . It is a component too critical to their success.

If you’re like most people and you feel you have a lot more to learn, you can read my special report on MLM compensation plans. You’ll be glad you did.

Debbi is the website to bookmark.

Copyright, 2008, Debbi A. Ballard All rights reserved.

(Anyone transmitting and/or posting this article online from has permission to do so as long as it is done in its entirety with the complete copyright notice.)

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