UNDERSTANDING_MLM_MATRIX_PLANS
| UNDERSTANDING MLM MATRIX PLANS
Copyright 2005 Judy Thompson
If you are already involved in, or are contemplating a business
using network marketing or multi-level marketing (MLM) as your
marketing strategy, the better you understand it, the wiser and
more successful you will be.
Network marketing companies select a certain type of
compensation plan for different reasons. In this article I want
to give an overview of the “matrix.”
What distinguishes the matrix compensation plan from other
plans? It is a limited width plan. The width generally ranges
from 2 to 5 people on the distributor’s first level. As more
people enroll, they go under those first level people. If, for
example, there were 3 first-level people, there could be 9
people on the second level, and 27 people on the third level,
etc. Thus, an organization could conceivably grow into hundreds,
or even thousands of people. The company promoting the products
or services will determine how many levels deep they will pay.
The company will pay you a certain percentage of the product
purchases for each person in your downline. If you have a
downline of only a few people, your bonus check will not be very
big. If you grow into hundreds or thousands of people under you,
then you will be paid a lot more.
A matrix plan allows for “spillover.” Spillover occurs when
someone not enrolled by you is placed in your downline, and
thus, has “spilled over.” This can be a neat, exciting thing to
happen to a new distributor. It should never be counted on as
the primary means to build a downline. In fact, probably the
majority of people in a matix plan will never receive
“spillover” from their upline. To be a beneficiary of
“spillover” you have to be in the right place, under an upline
member who is doing quite a bit of recruiting. However, it can
be a very helpful thing to someone who is serious about building
an organization.
The biggest drawback to a matrix plan and “spillover” is that
often it attracts the lazy type of person who doesn’t want to
work. So, you have a bunch of people joining just looking for
their “spillover.”
While the matrix compensation plan is used by only about 9% of
MLM companies, it generally is very attractive to people who can
just work their MLM business on a part-time basis. The low
monthly volume usually required helps it to be a workable plan
for both part-timers and the non-sales types. Thus, in spite of
some disadvantages to the matrix, people who are willing to do
some work are likely to find that success is truly within their
reach!
About the author:
Judy Thompson, a former teacher and business owner, is an
experienced network marketer. She promotes a nutrition company
that has an automated support system. For details, go to:
http://automaticbuilder.com/333015895/?source=605
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