Thursday, April 23, 2009

What is an MLM compensation Plan?

A compensation plan is a vehicle by which an MLM company rewards its distributors for selling the company’s products and services. In general business terms, some companies hire employees and pay them a fixed wage while other individuals may work for a company on contract.

MLM distributors are not employees of the company they are affiliated with, they are independent agent contractors. A compensation plan is the stated means by which the distributors will be rewarded for their efforts with the company.

The term “multilevel marketing” (MLM) in and of itself describes the nature of each compensation plan. The MLM compensation plan pays its distributors on multiple levels of sales activity; i.e. on more sales than just those that a distributor his or herself is responsible for making.

In summary, the key thing to keep in mind when speaking of an mlm compensation plan is that it is intended to reward a company’s distributors on the sales efforts of multiple levels of sales people.


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Let's get the industry cleaned up!

Sincerely,
Scott H Leonard

2 comments:

  1. The right compensation plan will help the company achieve the results it is looking for.

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  2. This is very good information a really nice blog. keep it up!!!

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