Sometimes it can get a little confusing as to how you are compensated when you start and mlm or network marketing business.  Even if your upline explains it to you, you might still have some questions or confusion, so below I have tried to summarize the different types of compensation in MLMTypes of MLM Compensation companies.

In multi-level marketing, the independent agents are compensated depending on the volume they sell and/or the new agents that they recruit. It is very important to learn about the types of MLM compensation plans and choose the right one for you.
There are five types of MLM compensation:

a) Binary compensation:
It involves the application of two legs that can be run like business centers.
You sell the products from each of these legs and compute the volume of sales in each of them.
You must balance out the sales volume in the two legs. This ensures that one business center is not too idle as the other one is filled with a buzz of activity.
Compensation is based on the volume of sales per leg. This is obviously an advantage because you have two legs, and two is better than one.
b) Matrix compensation:
In this type of compensation, there is a high application of computer technology.
Compensation is based on the new agents you recruit. With a new agent you recruit, the computer searches for a free spot in its matrix and allocates them.
You can over-ride this system if you specify the exact place you want the recruit to be placed. You get compensated for recruiting.
c)Stair-step compensation:
It basically involves compensation via promotions. You must achieve a certain sales volume in order to achieve a rank.
With each promotion, there is more money.
The promotion is usually monthly, but you cannot get promoted unless you reach the relevant sales volume.
d) Uni-level compensation:
In this type of compensation, there is no promotion for agents or ranking. The company will compensate you on the number of levels.
Compensation occurs when you have a sales volume that is over and above a certain level that is preset.
The more times you sell above the set sales volume, the more money you make.
e) Break-away compensation:
Here, your business will be required to reach a certain level of success, beyond which it does not become part of your payments.
Your business will “break away” from your compensation pool.
This type of compensation is not really preferred because it could lead to the an eventual drop off or death of your business.
In order to choose the right type, make sure that it is not too complicated for you to operate. Most important of all, make sure that it is making you money.  Finally, if you have questions, ask your sponsor or the person you are considering joining.  The last thing you want is a misunderstanding when starting your new business!


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