What is Matrix MLM Plan?

Matrix MLM plan is a popular compensation strategy in the direct sales business, where members are arranged in a fixed matrix structure. Unlike other compensation plans, matrix MLM plan has precise clarity on both the width and depth of the genealogy structure it would adapt. This plan is also called Forced Matrix Plan and is represented by the formula Width * Depth.

Matrix MLM limits its width more compared to its depth and motivates to hire more members in the downline. It has a pyramid structure arranged into a fixed number of width(row) and depth(column) that restricts the number of distributors you can sponsor on your first level.

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Structure of Matrix MLM Plan

Matrix Genealogy tree is the network structure adopted by MLM firms that choose Matrix MLM plans. Though Matrix MLM Plan have fixed width and depth, which will be decided in advance by the MLM. These widths and depth shall be depended on the product, its sale, and distributor network prospects. The most commonly used matrix MLM plans are 2×2, 4×7, 5×7, 3×9, and 2×12.

Working of Matrix MLM Plan

The most important decision an MLM can make while deploying an Matrix MLM Plan is the number of members at each level. They should also determine the most apt number of genealogy levels that will bring them the best benefits. These two factors make up the width ( members at each level under a parent) and the depth( Number of Levels) they should have in their Matrix MLM business plan.

Matrix MLM plan have a fixed/predetermined depth and width and strongly reject placing any member in a position that is at odds with the predetermined depth and width. Such members are spilled to the next level of the matrix MLM.

The distributors must help their downline members for the growth of their organization because there is a limited width to this MLM compensation plan. In the Matrix MLM compensation plan when the first level becomes full the distributors have to sponsor new recruits deeper into their downline. Consequently, these new distributors are placed into the next available position. As the distributors grow more experienced in their roles, they will be able to decide the best positions for the new distributors under them in the matrix MLM plan.

Working Of Matrix MLM Plan With An Example

Let us consider a 3*2 matrix MLM plan, where 3 is the width and 2 is the depth or height of the matrix MLM. Below shown is the 3*2 matrix.


Width (3) is the maximum distribution allowed in each level of the matrix mlm plan and height(2) is the number of levels in the matrix. Once the 3 distributors are added to the first level of the matrix mlm, the first level is finished and the new 3 members are added to the next level. i.e 2nd level. Here the matrix contains only 2 levels.

Under each member in the first level i.e under 3 members in the first level again 3 members are added to the second level. Altogether there will be 9 members on the second level. Adding distributors to the second level is called a spillover in the Matrix MLM plan. In the 3*2 matrix, the total number of distributors will be 13( Sponsor-1, First level-3, Second level-9=13 members). The matrix 3*2 will be completed once it forms these 13 members.

As the width is restricted in the matrix mlm plan, only 3 members are added in each level and so it is called the forced matrix mlm plan.

Different MLM companies follow different Spillover preferences as per their MLM business strategy.

Spillover Preferences, Guidelines, and Scenarios

Sponsor: The distributor who introduced the new member to the matrix mlm network.

Parent: The distributor, who is the direct upline of the new member introduced to the matrix mlm network.

When does Spillover Happen?

In the Matrix MLM plan, spillover happens when the frontline under a sponsor is completely filled and a new individual joins under him. In such a case the new joiner will be spilled over to the next levels of the genealogy tree whose parent would be a downline of the Sponsor.

Guidelines for Spillover

Spillover can be done in many ways as per the preference of the company, but generally, spillover has a framework when admitting new joiners to the genealogy tree.

Normally by default new joiners spilled over are filed from left to right positions in the genealogy tree.

New members may be added according to their sponsor’s preference, or according to the owner’s wishes.

Listed below are a few of the scenarios that can happen in a mlm matrix software when sponsors place new joins at different positions in the genealogy tree.

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Different Scenarios in a Matrix Spillover

  1. The Sponsor & the Parent of downlines are the same same-sponser-parent-matrix-plan

    If distributor X sponsors A and If A introduces a new member B to the left leg of A in the matrix tree, then B is the direct downline of A. If again A sponsors a new member C, then it is added to the right of A since it was the vacant position.

    Now B, C are the direct downlines of A. A is the sponsor as well as the parent of B, C.

  2. The Sponsor and the Parent of the downline are different different-sponser-parent-matrix-plan

    Here X sponsors A and Y, where Y is placed under the right leg of A. A sponsors new member B, and B is placed under the left leg of A since there is no vacant position at the left leg.

    Now For Y, A is the parent and X is the sponsor. Here the sponsor and the parent are different for the Y. The matrix of A is formed from their own effort and the upline’s (X) effort by spilling over the member Y.

Weaker Leg Spilling

Here the newly introduced members are placed under the weak leg of the matrix mlm plan. The weak leg may be the left or the right leg of the matrix mlm and it depends upon the lowest sales volume acquired by the left or the right end so that the new member will be able to increase sales volume on the weaker leg.

Compensation Structure

In a matrix MLM plan members can be compensated in various ways in relation to the rank, recruitments, and sale of MLM products. Common MLM compensation schemes include Sponsor Bonus, Level Commissions, Matching Bonus, Position Bonus, and Forced Matrix Bonus.

Let’s use the 3 x 7 matrix as an example: you are on top and you have 3 members on your frontline. Your second level has 9 members, the third level has 27, all the way to your seventh level which has a whopping 2,187 members. If filled up, you get bonuses thanks to a total of 3,279 people! Many of the top leaders in this industry have organizations tens or hundreds of times larger than this. This is literally a case of converting.

Generally, sponsors of a new joint are compensated with a sponsor bonus in a matrix MLM business plan when the new individual joins the company under his referral. With the joining of the same member, those in the new joiner’s upper lines would be compensated with Level Commissions.

Once the matrix MLM gets completely filled by members, it is a general trend in most MLMs following a Matrix MLM plan to compensate them with forced matrix MLM bonus.

Bonuses in Matrix MLM Plan

  1. Sponsor Bonus

    The Sponsor bonus is the amount earned from adding the downline members on the front line in a matrix mlm plan.

  2. Level Bonus

    Level commissions are the compensation earned by upline members in a matrix mlm when a new joiner is placed on their downline. The upline levels up to which Level commission can be earned varies according to the compensation schemes of the MLM.

  3. Matching Bonus

    A Matching Bonus is a commission received by the sponsors based on the earnings of downline distributors whom they have sponsored.

  4. Forced Matrix Bonus

    All the members of a Matrix Genealogy tree will be eligible for a Forced Matrix MLM Bonus when the matrix is complete.

  5. Rank Bonus

    This bonus is paid to members of matrix MLM business plan who achieve a specific rank or level within the matrix. The bonus is typically a one-time payment and the amount varies depending on the rank achieved.

  6. Infinity Bonus

    This bonus is paid to high-ranking members who reach a specific level of success in the MLM matrix plan, as a percentage of sales or commission earned by members beyond a set number of levels.

Pros of Matrix MLM Plan

1. Spillover Effect

When a sponsor brings on more employees than their matrix can handle in their downline, spillover happens. The extra recruits are given to their downline, who gains from them and speeds up the expansion of their network.

2. Team Collaboration

Team members cooperate to take up their matrix positions because each is given a fixed-width matrix. As participants work to support each other’s success, this promotes an encouraging atmosphere and fosters teamwork.

3. Fast Cycling

A member completing their matrix & receiving commission is known as cycling. When contrasted with wider MLM structures, the plans provide faster cycling, enabling members to receive payouts more frequently & generate income more quickly.

4. Focus on Depth

A deep structure is produced as members add new distributors by placing them under the existing members of their downline. Members with a strong downline benefit from depth by receiving support, mentoring, and increased earning potential.

Cons of Matrix MLM Plan

1. Limited Width

There is a limit on the amount of direct recruits one can have because each member is only permitted to hold a certain number of frontline positions. Network growth is restricted by narrow channels and expansion options are constrained.

2. Spillover Dependency

Members who rely heavily on spillover risk becoming complacent and neglecting to actively recruit new members. In the event that spillover fails to happen as anticipated, this may lead to slower growth and fewer earnings potential.

3. Balancing Placement

To maximise their potential earnings, members must position new hires within their organisational structure. To prevent unbalanced matrix positions along with missed income opportunities, careful leadership and strategic planning are imperative.

4. Income Disparity

Earnings in the matrix plan vary based on positioning and downline activity, resulting in income disparities among members. Income disparities can lead to dissatisfaction, demotivation, and network attrition among members with lower earnings.

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Matrix MLM Calculator

Matrix MLM Calculator will help to predict your monthly income while exercising the Matrix based on your recruitment, sales volume, and so on.

In the Matrix MLM Plan, there are different types of compensation that are used to increase the stability of the matrix MLM structure and to make the team active.

The all-inclusive report generated by the matrix MLM plan calculator helps to single out realistic details in choosing a Matrix MLM plan with a given width, depth, commission, tax, and other charges and expenses.

Matrix MLM Calculator helps to measure the wealthiness of Matrix MLM plan for a given account of income and payouts. This way MLM companies are able to choose the most ideal compensation plans that benefit the MLMs and their members equally.

Following are the inputs that need to be given for the calculator to generate its results

  1. Joining Fee

    The joining fee should be decided by taking into account an estimate of how much a distributor in a demographic sector will be willing to pay while joining an MLM company.

  2. Product /Service Expense

    Every MLM should have a clear idea about how much expenses would accrue on the company in making the MLMs product or services available for sale. This needs to be properly budgeted for running the company profitably.

  3. Matrix Commission

    MLM companies have to decide on the Matrix MLM commission they will be able to pay to their distributors by taking into account the budget around which reasonable profit can be made for the company.

  4. Number of Levels

    The number of levels in an MLM plan is scalable. MLM companies need to decide wisely about how many levels they need in their MLM plan.

  5. Admin Charges

    Administration charges normally range between 2% to 4 %. MLM companies should estimate it accordingly.

  6. Tax Deduction

    Shall depend on the country of the MLM Company.

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