As I indicated last time, in my view there are network marketing compensation plans that will give you much better value for your efforts than the standard “stairstep breakaway” plan.  (The only possible exception would be if you’re a gung-ho, full-time operator, experienced in MLM, and with numerous contacts and money to spend.  Which most of us are not.)

The only other thing I want to say on breakaway plans is this:  people seduced into this plan are always willing to quote you theoretical scenarios and rubbery figures till they’re blue in the face.  They may even brag that their company and upline are making a fortune, while ignoring their own sad pittance.  But putting theory aside as irrelevant, for me this plan just has too poor a history in practice to mess with any more.  I could even surmise that its poor track record in the last 20 or 30 years in bringing profit to any but the very top distributors is the real cause of so many burned out MLMers with a grudge against the whole industry.

And the great thing is, there’s no need to mess with these old-style plans, and with companies whose glory days are behind them.  This is mainly due to a couple of exciting new developments in the network marketing industry.

The first such development

…is how amazingly well-positioned the new breed of companies are to take full advantage of what’s been called “the next trillion-dollar industry.”  This, as you may be aware, is the booming health and wellness movement.

People en masse are starting to become more and more proactive in taking care of their health and fitness in advance, rather than going to doctors after the damage has been done.

What’s more, doctors can only do so much.  There are many intractable medical conditions which don’t respond well to either pharmaceutical drugs, or expensive, high-tech (and often highly invasive) treatments.

As well as making the obvious recommendations for more exercise and better diets, scientific and medical researchers are turning to nature and discovering a virtual treasure-trove of plant substances (known as “phyto-nutrients”) which native peoples have used for centuries to cure — or prevent — common ailments. And a growing number of new-style network marketing companies are applying some of the most cutting-edge research in this field, and coming up with products with tremendous potency and wide application in promoting health and wellness.  Products which — in a lot of cases — are even able to undo the damage that’s already occurred.

This is such a big and exciting subject that I’m going to devote more time to it a little farther down the track.  For now, let’s keep our focus on modern-day compensation plans.

The second new development

…I was referring to is the arrival of some highly-evolved new marketing plans.  These have only been made possible through today’s extremely sophisticated computers, with their vast data storage capacities and lightning-fast processing capabilities.  They can now be programmed with algorithms that ensure a fair spread of compensation, taking into account everyone’s contribution and making adjustments on the fly even faster than the speed of thought.

Add to this streamlined fulfillment systems that get product out with unprecedented efficiency, and you have a recipe for independent entrepreneurs to create their own big, nationwide or even global distribution businesses — without even leaving home.

The new breed of companies that are doing this are, in the main, using marketing plans called “binary” and “unilevel” plans.

Early forms of both these plans have been around for many years, and they’ve been shown to have several advantages in practice over the stairstep breakaway plan we were talking about before. 

For instance:  whereas the breakaway suffers from the effects of continually chopping almost-viable teams into smaller, non-viable units which are constantly in a state of having to struggle to get on their feet, only to be divided again — binaries and unilevels have no breakaway element.  So that huge built-in problem is avoided.  Along with the de-motivating effects of seeing your check cut down even as your overall group is growing!

Certainly, cutoff mechanisms are needed in every plan.  After all, the commission dollar can only be stretched so far.  And no plan deems it wise to allow a person to benefit greatly from a minimal work level.  For example, you can’t expect to earn a fortune by sponsoring just one hard-working distributor who brings in large numbers of people and huge sales volumes, while you sit back and do nothing more.

Therefore, you always have to sponsor a minimum of two good people; sometimes several.  And usually the more such people you sponsor, AND WORK WITH to help them succeed, the more you will earn.  This is where systems and upline support are so valuable, and in fact vital to your success.  (Just to finish this thought, I would never join with a sponsor who was not going places him- or herself.  How come?  Because I want to benefit from their drive and their motivation to help me; I don’t want my sponsor to be either not serious, not making progress, or so well established that they’re content where they are.)

On the subject of commission cutoff points, in binaries and unilevels these points occur only when each group has reached a solid, maintainable size and volume level.  This means that as your team grows, so does your commissionable volume, and so do your earnings.  And these plans usually contain a feature known as “dynamic compression,” by which your “reach” continues downline without limit to pay you your full current entitlement.  Volume is all that matters: if it’s there, it will count.

Now of course, not all unilevels and binaries got the formula right — especially in the early days.  Some companies failed; others prospered.  Always what mattered, and still matters, is how well the particular formula works in practice.

Recently I read a critique of a large and deservedly well-known company in this industry, which uses a 1990s binary-style compensation plan.  Somehow the writer, for all his analytical skills, had managed to take theory to new levels of unreality.  In business you’ve got to know the details, but you must never lose sight of practical reality.  And as a business person, you also have to have a vision of what’s possible, as well as a degree of excitement about what you see, if you’re going to be successful.

Niels Bohr, the pioneer of quantum physics, once said:  “Anyone who has looked at quantum physics and not been shocked by it, has not understood it.”  I’d like to say that anyone who has looked at 21st century network marketing, and not lost sleep with excitement, has equally not understood it.

Next time, I’ll look at binary plans, and especially “new generation” binaries, in more depth.