The direct selling payout cycle defines when your distributors receive payment for the efforts they put into selling products. There are three types of MLM payout cycles that are usually used in the direct selling industry. Here, we’ll discuss each one in detail and identify which one works the best for you.
In the weekly direct selling payout cycle, payments are made every 7 days. For example, if someone joins on a Monday and makes sales that week, their payout will be processed and delivered the following Wednesday for that week’s activity.
It is best for keeping distributors active and retaining them, as they receive payouts frequently. However, it doesn’t work for all product types.
If your MLM business sells high-value items such as electronics or furniture, a weekly payout cycle usually isn’t practical because distributors don’t sell these items in high volumes every week. But if you’re selling fast-moving products such as skincare or wellness items, a weekly payout works great and keeps your distributors motivated.
Example company: USANA
As the name suggests, a monthly direct selling payout cycle means distributors are paid once a month. In most companies, the payout is calculated for the entire month, and payment is made on or before the 15th of the next month.
It is widely used in the MLM industry because it reduces the workload on internal teams and gives distributors a predictable, stable monthly income.
Example company: Vorwerk
The hybrid direct selling payout cycle offers a blend of weekly and monthly payouts. Some companies pay weekly commissions and monthly bonuses. Others follow the opposite.
Consider companies with fast-moving products, such as essential oils, that make a weekly payout for commissions. However, they keep the team bonus payout monthly and the leadership pool bonus quarterly or yearly.
Such an arrangement helps businesses balance the workload on internal teams and distributor motivation. It reduces the risk of errors while keeping the distributor churn low.
Check out our full MLM Payout Cycle article to understand which payout timing structure works best for your business model.
Whichever direct selling payout cycle you choose, it must be backed by expert guidance and research. The type of products, distributor retention rate, complexity of your compensation plan, and cash-flow requirements should all be taken into consideration while making the decision.
