MLM Analyst

I recently finished a post on why you should be nervous about MLM companies that release distributor earnings. I finished that post suggesting that if your MLM company shows some distributors with massive monthly income numbers, there’s a great chance that its compensation program is unfairly top-heavy.

Fair vs. Unfair MLM Compensation Models

What makes a top-heavy MLM comp plan imbalanced & unfair? If you aren’t one of a few dozen of those top earners you may never see a decent income no matter how hard you work at it. Wouldn’t you rather be part of an organization that gives a fair chance for everyone to prosper?

MLM comp plans can be pretty complex and in the near future I’ll do some more detailed comparisons. But for now, bear with my over-simplifications and let’s graphically compare a top-heavy comp plan to a more balanced comp plan.

Comparing MLM Compensation Models

Choosing the Right MLM Compensation Model

…of course the plan would need to be complex enough that the rank-and-file members wouldn’t understand that they just got jacked…

OK, yes, I realize I’m exaggerating a bit on both sides. But I’m trying to illustrate an important point (that, and I don’t have all day to make graphics, I have a business to run). At least you get the picture, right? Which one would you want to belong to; the one that lets a few dozen people make a few extra million per year at the expense of everyone else who is working hard to support them, or the plan that spreads those millions around? Wouldn’t an ideal plan be easy on initial participants, rewarding to the middle-class distributors and still very motivating to the top leaders?

Look at it this way. What if you were starting an MLM company and you wanted to poach a few huge distributor organizations? I’ll bet you’d be tempted to implement a top-heavy plan that convinces some top guys to move their groups to you. Of course the plan would need to be complex enough that the rank-and-file members wouldn’t understand that they just got jacked. Are you sure you understand your network marketing company’s compensation plan?

Are You Excited About Your Guys at the Top of a High Earners List?

…go ahead and milk that warm fuzzy feeling for all it’s worth. It’s likely to be the highest compensation you ever see…

So, let’s go back to the topic of “top earners” and think about all of those mid-to-low-level distributors that are so excited to show off the fact that their upline leader is on top of the list. Pal (yes, I’m speaking to you, confused MonaVie guy), if you’re proud that some top earners list shows your guys at the top, go ahead and milk that warm fuzzy feeling for all it’s worth. It’s likely to be the highest compensation you ever see.

Everyone else who actually understood this argument should be asking themselves, “How do I identify the best possible network marketing company to join?” Lucky for you there are quite a few equitable MLM companies. To identify which one is right for you, you’d want to find out about their upline support, product quality, company support, compensation plan, cost, etc. And if the business opportunity was your primary concern, you’d definitely want to look at what companies are growing – and on top of that, which are experiencing momentum? Those are the ones who probably got the overall mix “right.”

As always, there’s more to come…. And, please feel free to comment anytime if you agree or disagree or if you have any questions or subjects you’d like me to cover in the future.