Visit our website at www.mlmlegal.com for more information on the direct selling industry.

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A Conversation with Jeff Babener Video Series: Learn about the difference between the various compensation plans and how distributors are compensated with each plan. It’s called multi-level marketing since distributors are compensated at each level as they recruit more consultants. How many levels are distributors compensated at? Learn about breakaway compensation plans. Learn the difference between sponsors and recruits. Get the definition of each unique compensation plan and which plans are most common and which are less successful. How many levels deep is it most common to go, and legal, to go?

When does a compensation plan become a lottery, which is considered legal by many states? Which programs have stood the test of time, and which have gone by the wayside? Which compensation plan should you choose so that your company is legal and stands the test of time? Learn how to ask the right questions to determine a legitimate operating MLM company vs. a pyramid scheme. Watch the video.

Keep yourself educated on the legal aspects of the MLM industry. Visit MLMLegal.com. Are you starting a MLM company? Make sure you have your legal aspects covered. Contact legal MLM expert Jeff Babener for your free legal consultation today.

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Compensation plans are drawn by skilled craftsmen.

As the French say, “a chaque a son gout.” Translated, this means, to each his own taste. And this is the truth. There is no right or wrong when it comes to types of compensation plans, whether they be unilevel, stairstep breakaway, binary, matrix, Australia Two Up, etc.

In fact, it is rare today to see a compensation plan that does not combine elements of various models as well as various add on features such as a shared bonus pool, enroller bonus, check match, infinity bonus, generational payout, fast start bonus, etc. Compensation plans are drawn by skilled craftsmen such as Michael Sheffield of the Sheffield Group, www.Sheffieldnet.com, to incentivize differing types of behavior. And incentives may be accomplished by rewarding those who have substantial personal volume, substantial group volume, sponsor wide, sponsor deep, train their downline, demonstrate substantial retention, demonstrate the building of other leaders, etc. Differing compensation plan models reward differing types of behavior. In general party plan companies tend toward unilevel and generational bonuses. Consumables companies tend toward matrixes and binaries because the focus is on recruiting large downlines. Australia Two Up plans tend to be oriented to high-priced, one-time purchases.

As a general matter, all compensation plans have a similar amount to distribute, ranging from 30-50%. How the pie is cut differs from business to business. A party plan skews payments to the direct sale. A consumables plan skews payments to be spread over a larger base. In the end, the compensation plans chosen are tailored to the products, economic objectives and behavior to be incentivized.

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Our next Starting and Running the Successful MLM Company Conference takes place October 27 and 28, 2016 in Las Vegas. Call 503-226-6600 or 800-231-2162 to register. If you’d like to see how you can get free tickets to the next MLM Startup Conference, visit our Innovation Campaign page.

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