There are many network marketing compensation plan out there. The most common ones are binary, matrix and hybrid. Most of the compensation plan are fair and the best compensation plan is in the eye of the beholder.
The reason why some network marketer find it hard to progress in a certain company attributed to many factors like, training, team support, products, company, trend and individual. However, after years of trying out many network marketing compensation plans, I had find out certain pay plan attract certain type of people and certain people will succeed more faster than others in different pay plan.
2 Types of Network Marketing Compensation Plan
If we look at the big picture, there are only 2 types of plan – Business and Products.
Why I say so?
Fundamentally, this came about in which pay plan the company adopts.
Product Pay Plan
Some of the pay plan requires you to find X number of customer or retails the products. These customer no need to become a distributor – just yet. Yet when they consume, the distributor accumulate volume.
This is good because, there is a constant flow volume monthly because consumer are consuming the products. The downside of this is, the distributor may need to find a lot of customer (depends on their company pay plan) to see substantial amount. In consumer perspective, it may also be difficult for them to just switch their favorite brand. So, it might be difficult but not impossible for a distributor to get X number of consumer.
However, in an ideal scenario, one may need both distributor and consumer to stay in business for a long time for such compensation plan to work in their favor.
Business Pay Plan
The other side of network marketing compensation plan is gear towards business building. This type of pay plan usually have lesser product. Some company works this plan well by pushing only their flag ship product. In this type of pay plan, volume is accumulate via like minded people aka those who want to build a business out of it. The distribution of products for most of the time is for personal consumption though sometimes it may be sold to others.
The plus point for this is that there are lesser product to learn which in turn leads to little or no confusion and the team can work together towards a common product or goal as the team are talking on the same topic.
However the downside of this type of pay plan is, one has to find like minded people or profit driven people who like to share and talk about business plan or opportunity which again, not many are comfortable doing so.
As you can see, there are no perfect or best network marketing compensation plan. So do your own due diligence before joining a network marketing company that have the compensation plan that suits your character.