What is MLM?
A multi-level marketing business(MLM) or network marketing is a tiered, commission-based business.
Here, sales associates not only sell the product themselves but if other sales representatives join the company beneath a sales associate, the sales associates also earn a commission every sale the new sales representative makes!
Unilevel Compensation Plan:
The Unilevel Compensation plan is one of the oldest and well-established compensation plan in the Network Marketing industry.
As the name indicates, the Unilevel MLM Plan permits you to sponsor only one line of distributors, so everyone you sponsor is on your front (i.e no spillover). There’s no width limit on this plan and the commissions usually paid out at a specified level depth. In unilevel plan, each user can enroll unlimited number downline (frontline) under his downline.
The purpose of this compensation plan is to recruit as many members of the team first and then line them even. In this plan, the depth is limited but you can build as wide as you want. This limitation in depth inspires distributors to build wide. The primary feature of a unilevel compensation plan is the payment of a level commission to all qualifying distributors. In MLM plans, one of the oldest compensation plans.
Advantages of Unilevel Compensation Plan
Unilevel MLM plan is the easiest, MLM structure.
To start to earn commissions with the Unilevel Compensation plan usually only requires the least amount of personal volume.
Disadvantages of Unilevel Compensation Plan
Not Much possibility of rapid downline development
Matrix Compensation plan
The Matrix MLM Compensation Plan is also referred as Forced Matrix Plan. This MLM plan is based on a compensation structure that consists of a certain width and depth. The basic structure of the Matrix compensation plan is identified by the ‘width * depth’ of the matrix. In matrix plan each user can enroll limited number downline (frontline) under his downline.
Advantages of Matrix Compensation Plan:
Once you have filled your frontline distributors, you can then shift your focus to developing your frontline distributors into leaders.
Disadvantages of Matrix Compensation Plan
The width and depth of the plan coupled with the variable pay scale can leave many prospects confused.
Unilevel Vs Matrix MLM Compensation Plan – A comparison
Matrix MLM Plan pays more in comparison to the Unilevel MLM Plan.
Since the Unilevel MLM plan involves the uni-level distribution of members, implementation is quite easier than the Matrix MLM plan.
Downline expansion is easier in case of a Unilevel MLM plan due to the uni-level layout.
The down line structure of the Unilevel MLM plan is different from that of Matrix MLM
In the case of the Unilevel MLM plan, a sponsor cannot influence the downline recruitment since the concept is that of uni-level.
Downline matching is not essential in case of Unilevel MLM plan whereas it is essential in the case of Matrix MLM plan.