Matrix Compensation Plan for Direct Selling Business
MLM MATRIX PLAN
The matrix mlm compensation plan or forced matrix compensation
plan is one of the commonly used plan in the mlm industry. This
plan is popular for its unique characteristic that is limited width.
The only distinguishing feature of this plan is therefore its limited
How Matrix plan Works
The Compensation plan is denoted by 3x5, 5x7 in this plan. The
3x5-matrix compensation plan denotes that you can recruit up
to three distributor in your direct downline & your organization
can go down to five level deep. On the other hand, you can say
that you have a maximum of three distributors at your first level,
nine at second level, twenty seven at third level and so on right
up to the fifth level. As there is a limitation on the number of
distributors at any given level, so once a particular level fills, any
new recruit will spill over to the next available position
irrespective of level.
Advantages of Matrix Plan
There are two advantages of mlm matrix compensation plan,
they are namely:
• The potential for spillover
• The possibility of having more than one sponsor
The Potential of Spillover
The potential for spillover is the most exaggerated of the two
advantages. When recruiting, distributors often promise their
prospects massive amounts of spillover. Statements such as 'I will build
your downline' are common in opportunities using the matrix plan.
These kind of promises often create a major disadvantage in the matrix
plan, namely, that people will sign up having a false belief that all they
need to do is signing up and their downlines will be built.
If you promise your prospects that you or someone else will build their
downline, you might be setting up yourself for major problems later.
The myth behind spillover is that you will benefit from upline activity,
and that your downline will also benefit from upline activity.
The potential to have more than one sponsor
Your sponsor is the person who introduced you to the network
marketing opportunity or the person in whose downline you fall
Because of spill over, you will not necessarily be in the direct
downline of the person who introduced you. You may be placed
in a direct downline of another distributor.
The benefit of having two sponsors is that, if both sponsors are
active and excellent trainers, you may gain a lot from their
Disadvantages of Matrix Plan
There are two misconceptions about the matrix plan
• Downlines grow faster
• Distributors will remain motivated
Downlines grow faster
The reason behind this is that since you are forced to have only a
limited number of distributors on your first level, those
distributors you recruit beyond the given number will be placed
in your second level until that too is filled. In addition, you will
receive new distributors from the upline. However, it may not
necessarily be as simple as that because building of a downline is
mainly dependent on the type of matrix plan the company has
Distributors will remain motivated
People are not necessarily motivated by freebies, i.e. spill over
distributors in the case of matrix plans. The opposite may
actually happen. Some people will join your organization
expecting to have their downlines built by others. Promises such
as "Join my team and I will build your downline" can be a recipe
for disaster for the matrix plan mlm business.
Whether the matrix plan is for you or not, is for you to
determine. Do note that like other networking marketing
compensation plans, the matrix will not necessarily work well in
all situations. To make the matrix compensation plan successful
you need to use a well-defined mlm software solution along with
avoiding the disadvantages of matrix plan mlm business.
Sankalp Computer & Systems Pvt Ltd
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Mangalwar Peth, Pune, Maharashtra
Ph.: (91) 20 41062300