This is a great question – perhaps it is the million dollar question. We’ve looked at several different types of compensation plan structures, but we still need to address how to tie it all together. It’s not just the type of pay plan, but also how much it pays out, and to whom it pays most of the money. Let’s look at a couple of things that will help us figure out how to answer this.
First, most people who join network marketing will start out part time. They won’t be full time until they make enough money to replace their income from their job. Also, most people are not super-recruiters. On average, a person will sponsor 2.7 people. A plan that requires you to sponsor 6 who sponsor 6, etc., will be very difficult for most people. A good pay plan will reward those people who put forth a serious part time effort without massive recruiting. Otherwise most people will drop out and you’ll have to start all over again.
Second, most people are about average. That’s the definition of average, isn’t it? Most people are not in that top 3% that makes the big bucks. Also, most people will be doing average volume. They won’t be selling products out of a high-traffic retail or online store. A good pay plan will reward average people doing average volume. If not, then why would they stay? You’re back to the drawing board again.
So my advice on picking the best compensation plan is to look at several things. First, how easy is it for the average person to break even? How much work do I have to do to earn my desired income? Can a serious part time person make money without doing a lot of recruiting? And finally, does the plan reward average people doing average volume? Once you answer those 4 questions, you’ll have a better understanding as to how good a compensation plan is.
More information on compensation plans