Unilevel compensation plan is employed by most of the modern MLM business companies due to its simplicity. This plan works well for both small and large scale business organizations.
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How does Unilevel MLM Plan work?
Unilevel Compensation Plan Structure
The commission is attributed up to a fixed limited depth of distribution line. This depth is decided according to the compensation plan of the MLM company.
The main objective of the plan is to recruit as many members and line them evenly. Each affiliate recruits newcomers in the front line, introducing them at any width. A person can sponsor
only one line of distributors. There are no limitations in the width of the plan.There would be no spillover in this case, unlike other MLM plans. Hence, each member can add as many members in his downline, thereby building a stronger and longer network downline.The fee is normally paid up to a limited depth that has been decided by the company. The payment structure is regulated by insisting on a minimum member volume to be required to earn a commission. Hence this is a very convenient plan for part-timers. Due to the simplicity of the plan, it is very easy to understand. The training imparted to the employees is also very less when compared to other plans.
- Since one member controls the entire down chain, he gets a dividend of each down chain member.
- Generally, companies have compensation plans that run 5 and 7 levels deep. They can run anywhere between 4 and 10 levels deep.
- All the distributors at the same level would receive the same compensation.
- This constraint can affect deep sales organizations and this can be considered the only disadvantage of the Unilevel compensation plan.
Let us consider one example of the Unilevel compensation plan. Suppose a Distributor X joined this Unilevel MLM plan and introduced 5 new members and these 5 members will be placed on the first level of the Unilevel MLM plan. This is how it is called a Unilevel MLM plan. The unlimited members can be added to the first level of the MLM plan. This is the importance of the Unilevel MLM plan and so it is also called a Single Level MLM Plan. The sponsor will have more opportunity to earn a high commission as there is no limit in the width of the plan or introduce the recruits under the first level of the plan that comes directly under the sponsor
New sales made by the downlines of the sponsor X
Suppose Distributor 1, is placed under the sponsor X and recruits new members to the Unilevel compensation Plan. These downlines of distributor 1 are directly placed under distributor 1 and it provides compensation for the efforts of the distributor 1, this is called direct compensation. However, there are compensations earned from the new sales made by the downlines of the sponsor X. Here sponsor X earns compensation up to 5 to 10 levels deep, which is set by the MLM company. When the distributor purchases the enrollment package he/she becomes the part of this MLM plan. The normal user then becomes the distributor and is placed under the sponsor genealogy
tree. Now the distributor earns a downline position in the genealogy tree under the sponsor.
Unilevel MLM Compensation Structure
Unilevel Compensation may be provided for 5 to 10 levels deep down the MLM plan structure depending upon the MLM company. The commission varies depending upon the levels in the Unilevel compensation plan. Say, For an Example:
- 10% of SV at level 1
- 5% of SV at level 2
- 4% of SV at level 3
- 3% of SV at level 4
- 2% of SV at level 5
- 1% of SV at level 6
MLM companies may set some compensation criteria like distributors can earn only up to a certain percentage of the enrollment fee or based on ranks, etc. Unilevel MLM plan motivates the group members and makes them active. However, the compensation earned is less when compared with other MLM plan compensation as there is no chance for a spillover.
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