Multi-Level Marketing (MLM) is a method of distribution of goods and services and is quite different from traditional distribution methods.
Here, the MLM companies don’t have to advertise their products or services in commercials on TV or other mass media but they depend on their customers to share their experiences on using the products and recommend it to their friend sand family through word of mouth.
In exchange for that, they get around 10 to 12 percent profit of the sales value. Hence, as much as it is a powerful marketing tool, it is also a way to earn money and thus an excellent form of passive income.
Once you sign up someone by selling them some products and they sign up someone else, a network is created. The bigger the network, the larger the sales and bigger the commissions that you get.
All of that being said, MLM has a few plans to keep the marketing strategy up to mark. An MLM company can choose between these to find the plan that works the best for their company.
In the article below, I have discussed a few plans, their features, popularity and how they work. Let us start off by understanding about the best Multi Level Marketing plan which is the Binary MLM plan and follow it up with some of the less popular plans.
1. Binary MLM Plan
Now, let us delve into the most popular MLM Plan that is widely being used by a lot of companies. It is the Binary MLM Plan. This is an organizational structure used in MLM where new members are introduced into the tree-like structure of the system where each new member of the organization has a left and right sub-tree.
Related: Binary MLM Plan Software
This plan is very easy to understand, is extremely popular and requires capping.In each sub-tree of a binary plan, there is the outside leg and the inside leg. Under the outside leg, also known as power leg, new distributors are placed below their recruiter.
The inside leg, also known as profit leg, is filled with directly sponsored members or members enrolled by their immediate ancestor.
An important feature of this plan is that it makes each member responsible for recruiting and sponsoring only two others to join the plan. But if more than two are recruited, they are added to the next available node in the power leg. Whichever sub-tree that makes the least amount of money becomes the pay leg due to a concept called balanced volume.
The members of both the sub-trees are paid a percentage of the pay leg’s growth regardless of how much that person is responsible for or which tree he or she is actually in.
Now that we have read about the most popular and widely used MLM plan, below I have discussed a few of the other plans that are just as popular and effective.
2. Unilevel MLM Plan
This is a simple MLM plan which employs traditional methods to expand one’s network by exerting direct control over the distributors. It involves two to ten levels in depth and unlimited members can be added in the first level.
Related: Unilevel MLM software
The first level members can add members to down-line and earn an unlimited reward. The main features of this plan are it is easy to understand, has control on profit sharing and does not require capping.
Some of the famous companies like Amway and Herbalife employ Unilevel MLM Plan.
3. Repurchase/Generation MLM Plan
This is a compensation plan and is purely based on selling the product. This is specially meant for companies that are the manufacturers of consumables.
Related: Generation MLM Plan Software
There are many users working on network establishment from around the world and the referral system keeps on improving and increasing thus making the member network larger.
If the network consists of 500 members, then the organization can divide them into 2 generations with each generation receiving different compensation. This plan is more complicated than the Unilevel MLM but it is very popular.
4. Stair Step MLM Plan
Stair Step MLM Plan is one of the oldest plans which is still very popular because of its high earning potential. It starts just like the Unilevel MLM plan but there is a percentage or target-cut-off at each level.
Related: Stair step MLM Software
If one can meet the cut-off, they can move up and finally breakaway at certain level.
There is an initial cost while entering the plan and the breakaway depends on the earnings from this and the down-line teams. This plan is so easy to understand and has a high control over profit sharing.
Only a limited number of levels are possible in this plan. Large companies like Tupperware use this compensation model.
5. Board MLM Plan
This compensation plan is also known as Revolving Matrix Plan or Matrix Cycle Plan and is extensively used by a lot of companies.
It is a bit complicated in nature with a few concepts which are crucial for the success of the MLM companies. When the board it full, it splits into other and the excess members of the first board can form a new board. One of the board gains all the profits and the other one can earn referrals.
All the members come with referrals and each MLM company works with a specific limit and the company sets the limit of the board. The one who decides on the plan also decides on the number of the board and who gets promoted to the next board. This MLM Plan is not that popular and has an average control on profits.
6. Australian Binary MLM Plan
This is another one of the preferred plans in the MLM industry. This compensation plan got famous fairly quickly owing to the good amount of commissions and bonus rate. This plan picks out the limitations of the binary plan and filters them off to give out a better plan.
It is very similar to the Binary plan, but instead of two legs, this one has an extra leg which improves the compensation structure. This extra leg can also be mixed up with the Matrix plan and hence, the Australian Binary MLM is an extended version of the currently available plan but with extra benefits.
It is easy to understand and very popular.
These are the best MLM plans in multi-level marketing as of now and are being widely used in the industry to reap benefits for the companies as well as the distributors.