Understanding Multi Level Marketing Commission Structure

Many times people join a MLM business before they understand just how the commission structure works. In mlm there are several different commissions structures and each are quite different and some are very hard to understand. Understanding the different commission plans will help you better understand your business. So, today I want to explain some of the different mlm structures to help you understand them without the mumbo jumbo many mlm’ers like to use to confuse people.

What are the types of commission structures in an MLM program?

• Binary
• Breakaway
• Uni-level
• Matrix

What is Binary commission structure?
Binary is as the term dictates, it is a commission structure where you get your commission if you get a pair under you.

The idea is for you to get two frontline distributors or independent sales agent. This two will then need to get two frontline each.

You will then have about 6 people under you. Your level 3 will get two members under them as well. This is the requirement to get a commission for the sales of their recruits. If they all get pairs, you get a certain amount of commission from these levels. The idea is always to get two people under a certain individual to get the commission from their performances. Binary image provide by
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What is Breakaway commission plan?
This is a commission structure where there is a certain requirement of volume of sales or number of recruits before they can breakaway from your group. Those that perform well may be given the opportunity to create their own matrix by breaking away from their original upline.

The original upline may loose the ability to get a commission from the breakaway group but a possibility of override may make them feel that breaking away may be just fine.

What is Uni-level Commission?
This seems to be the most simple commission plan. You get paid commission in every member of your line. You earn a specific commission for your front line. You get a certain amount of commission from the front line of your front line otherwise known as your second level, and the commission scheme flow deeper down below. There may be forced Matrix creation but this is dependent on your MLM Company’s rules.

Note: Uni-level is not the same plan as a Stairstep breakaway. When one “breaks away, the upline no longer receives credit on the volume and the one who breaks away earns a higher commission.

What is Matrix Commission Plan?
This is almost the same as uni-level but there is limit in the number of frontline you may put under you. The second level will likewise have limited frontline members as well. If a certain group reaches a certain width and depth, this line may create a new matrix providing the new matrix a chance to get unlimited commission for themselves.

There may be other variations of commission structure depending on the rules of the Multi Level Marketing Company. You will need to understand the structure perfectly before entering a MLM Company.

For those of you in MLM currently, what type of commission structure does your company offer? What do you find to be the pro’s and con’s of it?