compensation plan

Compensation Plan Basics Page 4

Organization Level

Compensation Plan Organization Level

The organization level refers to the location of the downline distributor / associate relative to you or your Business Center. In the image below, the downline distributors / associates circled would be considered 2nd level distributors / associates to this Business Center. They are called this as they sit two levels below the Business Center.

The level directly above the 2nd level distributors / associates is the 1st level or frontline distributors / associates for this Business Center.

Organization Leg

For every 1st level (or frontline) distributor / associate you personally sponsor, they will form, with the exception of in a Binary Compensation Plan, a leg within your organization.

Compensation Plan Organization Leg

Looking at the image below you can see that there are 3 1st level (or frontline) distributors / associates. Therefore this Business Center has 3 legs. If this was a (4 X 6) Matrix Compensation Plan example, there would be 4 legs.

Each leg of your organization represents another Business Center with it's own legs. Keeping with our example, this Business Center has 3 1st level (frontline) distributors / associates, which in turn each have their own 3 1st level (frontline) distributors / associates.

As this pattern repeats and the organization fills out, it is obvious that you want to support your 1st level (frontline) distributors / associates so that they can start and fill their legs to their organizations as fast as possible.

Business Volume

The Network Marketing business model is used in many different industries. Regardless of the industry that it's used in, the goal is to move and sell products or services, just like any other business that exists. The difference being that with each product or service that is sold, a portion of the revenue generated through the sale is paid back to the distributors / associates responsible for the sale.

Along with this most successful network marketing companies operate in more than one country, and thus have to deal with different currencies of each country. To eliminate the issues associated with currency exchange rates, network marketing companies will associate a point system, or business volume amount with each product. That way, when a product is sold, regardless of the country that it is sold in, it will generate a consistent amount of business volume.

The business volume is what the compensation plan will pay the distributors / associates on. This keeps everything fair and equitable amongst all distributors / associates regardless of the country they are in.

More information on Compensation Plans, go to . . . Page 5 >>
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