Network Marketing Compensation Plans

	The Direct Selling Association(dsa.org) states that the average individual can sponsor 2.3 – 2.8 people in their lifetime with a network marketing company. By the way, the DSA is the largest governing body that regulates the direct sales industry. So if the average Joe can only sponsor between 2.3 – 2.8 people then it would be best to have a company where the minimum requirement to be successful in terms of recruiting fits the average. With this in mind, the most successful network marketing companies use the binary system because it only requires 2 people to be successful. If you fit below the average, then anyone can do the business! You are taught how to find two people, and then you teach those two people to find their two people, and it keeps going from there exponentially. It doesn’t take long to go from 2, 4, 8, 16, 32, 64, 128, 256, 512 etc. It is exponential growth! The power of two is used in: Computers use the binary code 1 & 2 E=MC2 Typically everything has two’s, night & day, hot & cold etc. The older systems of network marketing use other systems such as: The Stairstep The Stairstep or step and ladder plan is a simple plan that has requirements that you must meet to get up the "Stairs of Success" Every step is a promotion usually based on achieving a certain volume and each promotion or rank gives you a larger cut. The Unilevel The Unilevel is a simple "Number of Levels" that the company will pay you, and usually there is no promotion or rank. You make money by getting a certain override off of the volume, and usually there is a requirement of volume to qualify for a check. The Breakaway This plan has been said to have become somewhat unpopular in the industry, as you could lose the business you build, once it gets to a certain level of success, and it "breaks away" to no longer be a part of what you get paid on. It usually appears in stairstep. The Matrix The Matrix or sometimes called a Forced Matrix is like a pre-order tree. A computer driven plan puts into your group by computer, and they go in the next available slot. Usually this plan is combined with some form of a Binary and it does work well if there are a lot of people that are recruited and working together to fill the matrix. The Australian Two Up This is a marketing plan that is very unique. Basically, the two people you recruit are given to your upline sponsor and the rest of the recruits are yours. The Hybrid A hybrid is a combination of any of the above features. An example would be a Forced Matrix with Unilevel benefits ensuring that those who actually work to fill the tree gets paid more, or an Australian Two Up with Stairstep advancement to offset the disadvantages of distributors being too deep in an organization. The problem with these older business models is that it is not duplicateable. Meaning it is hard for people to copy because they require more than two people to become successful. Remember, the average person can only sponsor between 2.3 – 2.8 people in their lifetimes. If they require 3 people then you would have to be above average to succeed. The problem is that most people who start a network marketing business are just normal average folks with very little or no business experience. Therefore, the binary system has been the most successful. A perfect example of this is USANA Health Sciences winning the distributors and editor’s choice award for its binary business model for 10 years in a row by Network Marketing Today & MLM insider magazine which is a watchdog publication in the direct sales industry.

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