It's almost been nine years since I've had a "actual job". I went full time in network marketing in March 2003, and I have come across just about every single twist on an MLM Pay plan you could ever imagine. Here are my 3 main downfalls to watch out for when you're reviewing an MLM company and it's pay plan.
MLM Pay plan Pitfall #1: Qualifying your business so you can earn a residual revenue.
About 2 years into my mlm career I got misled into a company that really touted their no breakage, no problems 9 levels deep pay plan. But after spending a strong year and a half we all found out that in a real life circumstance the comp plan had one ENORMOUS downside. If I enrolled you and you signed up Joe and Joe enrolled Mary and Mary was a heavy player moving on to a top rank, she would not count as one of my getting qualified legs simply because I didn't recruit her directly.
In reality we all know that leaders may be found from somebody you know who knows someone etc. So be wary of the direct enrollment trap to be eligible at those greater positions that enable you to get paid much deeper in the compensation plan.
MLM Pay plan Downside #2: Balancing and Structure
This specific about forced me right out of the business a couple of times. You spend hours, days, months, and years building, enrolling, and making the company lots of income. But unless you have the correct structure, you're making little on all that volume. Even though you introduce somebody that normally would most likely have never signed up with the company, there are many of compensation plans that unless you've 2 or more other "legs" with specific amounts of volume, you get paid very little if anything from that person and what they brought to the company.
Now I know this is needed to some extent, but believe me, some mlm companies cause you to jump through some very tiny hoops to structure your business to get paid any type of residual revenue long term.
MLM Compensation plan Downside #3: Global Bonus Pools and other Car or Home Bonuses
Plenty of mlm companies use their huge global bonuses or car incentives to attract the masses in. But let's be honest, most of your "average" builders won't ever achieve those high levels, therefore never earning in that part of the pay plan. This requires a huge portion of the companies income and gives all this to the elite and very few.
I am aware the big builders must be honored, heck I really like the additional money from building a large team. However, when you really consider it, the BIG group one person creates is made up of MANY small teams that lots of people built. Shouldn't all of them be rewarded a little something for those efforts and sales they introduced to the company? I believe so.