Hi Poon,
Pay plans, comp plans or marketing plans are the way in which a
network marketing company divides the commission payments amongst
its distributors. Compensation plans determine how much commission
you will receive from the number of people you have on your various
levels.
On paper some plans appear more lucrative than others. You need to
look at how much of every dollar of product sold is returned back
to distributors. Some companies return only 30% back in commissions
whereas others may return 50%, 60% or even higher.
There are two fundamental aspects of a pay plan that determine its
effectiveness. First, you have the structure of the pay plan. The
breakaway, binary, matrix, Australian two-up, multiple phase, and
the uni-level are examples of the different pay structures
available in the industry. Secondly, how the bonuses are placed
throughout these structures is important. Each of these structures
have features that favor the heavy hitter, the company, or the
part-timer. Pay structures that balance the potential commissions
between these three categories provide a more secure income for all
three. Traditionally, pay structures have favored the company and a
few heavy hitters. Gradually, network marketing is maturing and a
number of programs are providing a better balance between these
segments. In my personal opinion, I believe the uni-level provides
the greatest opportunity and balance for the majority of its
participants.
For a complete expose on Pay plans by Mr Mike Akins have a read of
"Science Behind Pay Plans" at www.professionalnetworkers.com/5071412.html