Unilevel Compensation Plan: Everything you Need to know

Let’s be honest: You cannot deny that the MLM industry is booming at a rapid speed. Many companies use multi-millionaire marketing plans to achieve heights in their business. And the reason for the same is to get the financial freedom and massive growth they thought of.

What happens in an MLM plan, as compared to the traditional distribution channel, is that network marketing companies sell their products directly to the customers. Furthermore, the distributors follow unilevel compensation plans to earn commission systematically. When customers become distributors, you are bound to earn extra bucks. And who says no to extra money? Here we have come up with the nitty-gritty of a unilevel compensation plan.

Let’s get started.

What are Unilevel Compensation Plans?

A Unilevel MLM plan or compensation plan is a plan including one business level. All the members in that business level are sponsored without any spillover in this plan. It is universal due to the fact that the sponsorship tree of a distributor in every compensation plan is represented using a unilevel plan.

But your organization needs to keep track of your business to turn towards growth.

So, how does a unilevel plan work, and what is its structure? Let’s find out.

Unilevel compensation plans work on the principle of ensuring maximum benefit for the collective effort of the distributors. Companies that work in the field of network marketing tend to use unilevel MLM software for automating, recruiting, and training. It also makes the process of payout as seamless as possible.

Structure

A new recruit is always on your frontline if you have only one line of distribution in the unilevel MLM plan. There is no set limit to the number of people you can recruit. The commission earning of every individual depends on the depth of the level. Every member is free to recruit as many members as they want, which gives rise to a strong network. Some network marketing companies also have criteria like a distributor can only earn 150% of the enrollment fee as compensation, or it will depend on their ranks, etc.

What are the Pros & Cons of the Unilevel Plan?

PROS

1. There are no complexities involved in the structure of a unilevel compensation plan.
2. The compensation earned can touch the sky if the distributors are good enough.
3. You can earn some really good bonuses in addition to the higher residual income.
4. The plan works well as far as all network marketing business models are concerned.

CONS

1. The plan comes with some limitations as it does not pay up to an unlimited extent.
2. There is no rapid downline growth.
3. The volume of the downline cannot be increased unless there is strong leadership established there.

Hybrid Unilevel Plan

The combination of two or more than two compensation plans is known as a hybrid unilevel plan. Other compensation plans include binary plans, and matrix plans, to name a few. Companies use hybrid plans to scale their business and make it more beneficial to the distributors.

Unilevel MLM Calculator

The individuals who are a part of the unilevel MLM plan should have an idea of whether it should prove beneficial for a direct selling company or not. Use the tools that are helpful in analyzing the profits. Network marketing companies use a unilevel MLM calculator to see how their plan is going to work and give results. The calculator gives error-free results in real-time and provides necessary inputs.

Similar Compensation Plans

There are many plans similar to compensation plans. Some of them are the monoline MLM plan, matrix MLM plan, board MLM plan, and Australian X-up plan, to name a few.

Let’s explain one of them, the Australian X-up plan in detail.

It is similar to the unilevel compensation plan but comes with an extra element, say “X.” Now, this extra element possesses a value. For instance – you have given “2” as the value of this “X.” In such a case, the plan will be called a 2-up plan. It means the sales volume of the first two direct downlines will get transferred to the direct upline.

To explain more, the sales of these two downlines are sponsored by distributor A which is transferred to distributor Y. Y is A’s parent. In the same way, the sales volume of all the “X” distributors will get transferred to the direct upline, i.e., to the Y (parent).

The name of this plan is given after the value of X. So, if the value is 3, the plan will be called a 3-up plan.

Moving further, here are the name of some popular companies using unilevel compensation plans –

1. PM International
2. SeneGence
3. Arbonne International
4. Melaleuca
5. New Image Group
6. DoTerra
7. Vestige marketing

Also Read: Complete Guide on Real Estate MLM

Final Thoughts

Following the unilevel compensation plan can make you provide the highest payouts to your team. So, say hello to the compensation, commission, and bonuses with the unilevel compensation plan, and let your customers and distributors feel happy with the extra money they earn.

Frequently Asked Questions

1. What is the best compensation plan in MLM?

Unilevel MLM plan is considered one of the best compensation plans in MLM as there can be unlimited members added to it. Moreover, every customer will be on the frontline. Thus, it maximizes the benefits to the distributor with the combined efforts of the team.

2. What is a breakaway compensation plan?

The breakaway compensation plan is the one where the distributor and his/her team break the chain after the distributor achieves the highest rank. Now, the breakaway group is added as a new tree below the admin. This plan is followed by companies that want to enhance the sales efficiency of the distributors.

3. Which type of compensation plan is mostly used?

The trending compensation plan is the unilevel one due to its single level of frontline distributors under each sponsor.

4. What is the simplest compensation plan?

The Monoline MLM plan is one of the simplest ones in the compensation plans as it has only one leg. The downlines are placed vertically on the first-come-first-serve basis. It helps the distributors fill their downlines fast and easily.