What to Look for in a MLM Compensation Plan

When choosing a MLM business it is wise to take a look at the compensation plan since that is what determines how you get paid for your team building efforts. MLM compensation plans can be a real pain to understand and they come in all different kinds so here are some questions to ask yourself and to think about before choosing a MLM company.

1. How much product will I have to purchase on a monthly basis? This is important because if the number is high it will make it harder for you as well as the people you sponsor to be able to afford it. This is especially true in the beginning when they are not making any money yet.

2. Will the amount of product you have to purchase each month increase as your income increases? This is important because you want to make sure that you will not ever be required to buy or sell more than you can reasonably expect to consume in one month even if you are sick or have something come up that makes running your business difficult or impossible.

3. How hard is it for a part time person to make a decent income? Various compensation plans make it easier or harder for the average part timer to make a decent income.

4. How much of the plan is based on bonuses and other extras that do not make up the standard compensation plan? If the amount is too large of a percentage then you need to be very careful because this can be a sign of an illegal pyramid instead of a valid MLM company.

5. Does the comp plan strongly encourage everyone to have customers and not just distributors? This is one of the requirements for a legitimate company and you will make a lot more money if you are able to retail and make a profit instead of only enrolling distributors.

6. Will you be able to keep your income if you cannot work for a period of time? With many companies the comp plan makes this impossible or difficult.

In summary you really need to make sure that you understand the comp plan for any MLM opportunity that you either are already with or that you are considering joining.

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