08 April 2006

Understanding The Comp Plans

I found this article, written by Doris Wood of Multi-Level Marketing International Association (MLMIA). It is a very thorough explanation of compensation plans and examples of how they function.
Here's a short snip:
UNDERSTANDING THE MLM COMPENSATION PLANS
Copyright 1995 - 2003
By Doris Wood

Many components go into making up a plan and circumstances change with time. For instance, back in 1932, when MLM first began, and for another 20 years, the vast majority of companies developed their compensation plans without the benefit of computers. For those companies that started back before every business had a computer, and there are still quite a few around, it probably would cause a major shake up (as well as the loss of many dollars) if these companies were to make any major change in their program. Yet, it is doubtful if they would create the exact same program today.

Many factors, such as...

* Direct sales (party plan) or MLM
* Type of product
* Consumable, not consumable
* Product or service (a service is the product)
* The product mix
* Cost to consumer ratio
* Corporate goals (going public or sell the company within 3 years)
* Experience
* Postal laws
* Ease of sales
* Internet Based
* National or International
* Room for incentives like travel and cars
* More!
Read the entire post.

Doris Wood is the co-founder of MLMIA, which was formed in 1985 along with Michael Sheffield. If you are interested in reading their bio information, click HERE.

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