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Probably the most controversial compensatin plan is the Binary. The truth of the binary is it can be the fastest growning comp plan out there as long as it is a cycling type. Throwing in Matching bonuses can make it go even quicker.


The biggest complaint of the people who don't understand the binary is that you get a big strong leg and never make any money as you never get the weak leg running.


My personal experience is this is hogwash. Most who end up with a runaway leg and never make money, never built the runaway leg in the first place, it was a gift from the gods above.


Having a crazy leg built for you is a fantastic advantage. If you get to work, you can capitalize on a run away leg. If you do nothing, you will not and should not make any money.


The matching bonus idea can help take the sting out of the very very rare case where you do build yourself a run away leg, and have a hard time getting a second leg to keep up to it. The matching bonuses on your personal sponsored can make you a ton of money regardless of a second leg taking off. This is one of the fundamental ways of taking the last major objection to the binary away.


The most interesting thing about the binary is so many peple pretend to hate it, but truth is if you look at any of the very fast growing companies lately, I mean in the past 3 years, they have all been cycling binaries. The facts speak for themselves, yet this compensation plan still has so many detractors.


I am personally a fan of the binary if you want to grow a company fast and attract some of the power networkers.


The negative is, some of these type of networkers breeze in and breeze back out with their teams. If you have a solid product and comp plan, you should be able to keep enough shrapnel behind to have a nice solid sales base to grow wave two in!


More later, gonna take a break now!

Link: http://www.internetnextstep.com

Stair Step Breakaway?


If you talk to a lawyer, they will most likely tell you to go with a Stair-Step Breakaway as their whole purpose in life is to protect you from all risk. They can protect you right into a serious business failure too! They will likely push you to this plan as it is the longest running and most proven, most challenged and in their perception therefore "safest".


I simply feel that you will have a hard time attracting a distributor force with this style of plan. They pay out too little, are very hard to get rolling, and most networkers today are fairly short term focussed and simply won't put the time into making one of these go.


The Stair-Step Breakaway is a plan that is very favourable to the company. I can't help but think that this plan could be morphed into something good if you came at it from a new perspective.


It works best for hugely product centered customers where distributors will buy a lot of inventory and sell a lot of stuff retail. Could be made easier with proper internet shopping support that could contribute to group volumes without the distributor actually having to purchase all the product himself and resell on to others, but rather just direct interested customers to the internet to purchase for themselves.


The biggest pro to this comp plan is the way it pays out so low and is therefore often heavily slated in the companies favour.


The negative is, it is quite out of favour and really not very exciting for the distributor force. Once again with a little thought, it may be possible to morph this into someting that could work in todays environment. I welcome thoughts from people who have made the decision to join a stair step breakaway in the past year. Would love to hear your reasons why and convince me I just don't understand. Definately would like more knowledge on this plan, but simply don't have any clients even enquiring about it anymore!

Link: http://www.internetnextstep.com

The unilevel is very simple and most often becomes part of a hybrid compensation plan.


It allows unlimited width, and a set number of levels deep.


I guess it is easiest to say it is like a matrix but has unlimited width.


How you configure the goalposts to get depth or width is up to you and can really affect the effectiveness of this type of a plan.

Link: http://www.internetnextstep.com

The Stairstep Breakaway is the oldest compensation plan still in use. Amway, Herbalife, New Skin and most of the really old companies use this type of compensation plan.


This is kind of like a roller coaster of a compensation plan. Hard to get started, but if you can get it turning over, you can make a lot of long term money.


Basically it starts like a unilevel in that there is an unlimited number of front line positions. It has a percentage assigned to each level progressively deeper. As your group grows, there are usually group volume requirements to achieve status. Once your group grows big enough, that group will "Break Away" and you will earn a much smaller comission on the whole group instead of maxing out based on the number of levels deep you are.


As your income increases based on the group growing, you finally break away which often causes a settling of income until the group grows monstrous and the small percentage on the group is bigger than the level commissions would have been.


This commission plan is probably currently the least attractive to the distributor force and has the lowest overall payout to the field traditionally.

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The Matrix is a plan that has proven itself over time. It is often done by way of a 3 x 8 or a 5 x 7 configuration, though really the number of possibilities are endless.


What does 3 x 8 mean? Well 3 would be how many front line positions the plan would allow, and 8 would mean how many levels deep it would go.


Then a percentage of CV or comissionable volume would be assigned to each level. Again the configurations on how the percentages are structured are limitless. Melaleuca does it as a 5 x 7 matrix and pays 7% on each of the 7 levels.


Some companies comission the top level very high in order to stimulate retail sales, others make one of the lowest levels the highest percentage commission to encourage people to build deep large groups.


Matrix's can also be hybrid into unilevels quite easily where you would start as a 3 wide, but then based on qualification allow your members to earn more front line positions so they don't feel stagnated in your companies compensation system.