Unilevel MLM plan is a compensation structure that has only a single level. All the members sponsored by a distributor are positioned directly at that level. There is no spillover and the recruitment efforts of a distributor are directly beneficial to them only.
It is one of the simplest compensation plans out there and is easy to explain to prospects. Because of these reasons, the unilevel MLM plan is widely used by network marketing companies all over the world.
As the name implies there is only one level here. Unlike most plans with multiple levels for member placement and width limitations, in a unilevel plan, all the members recruited by a sponsor get placed to the same level.
Commissions are attributed up to a fixed depth of the distribution line. This depth is decided according to the MLM company. Normally unilevel compensation plans run 5 to 10 levels deep.
The main objective of the plan is to recruit as many members as you can 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. And as there is no spillover, each member can add as many members to their downline, building a stronger and longer network.
Suppose a distributor X joined this Unilevel MLM plan and introduced 5 new members. These members will be placed on the first level of X’s network.
Suppose distributor 1, placed under sponsor X recruits new members to the network. These downlines are directly placed under distributor 1 and it provides direct compensation for his/her efforts. However, these are also compensations earned from the downlines of sponsor X. So sponsor X earns compensations 5 to 10 levels deep in the network. These compensations vary according to levels.
For eg:
Bonus paid as an encouragement to the sponsors or distributors to promote business and recruit new members to their downline.
A predetermined amount paid per new recruit. This bonus provides a starter benefit for enrolling new members. A member has to achieve a target to qualify for this bonus.
The amount paid to distributors from the sales achieved by downline members. A unilevel plan has unlimited direct downlines in the first level and each of those members can have their own unlimited downline members. This opens large earning opportunities.
When the distributor advances to the higher ranks set by the MLM company with specific rank criteria, he/she will earn this rank advancement bonus.
When the distributors meet certain bonus criteria to earn a percentage of the MLM business turnover, they will receive the leadership bonus.
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