MLM Matrix Compensation Plan

 ByJetro Olowole

The Matrix MLM Compensation Plan also known as ladder Plan or Forced Matrix
Plan comes under the category of MLM compensation plans. This MLM plan based on
a compensation structure which consists of a certain width and depth, represented by
the formula ‘width*depth’.

How Does MLM Matrix Compensation Plan Works?

The matrix MLM compensation plan is entirely different while compared to
other MLM Plans. Let's use the 3 x 7 matrix as an example, you are on top, and have 3
on your front line. Your second level is 9, third 27, and eventually, your seventh level
is about 2,187. If filled up, your entire organization will compensate you for a total of
only 3,279 people. Many of the top leaders in this industry have organizations of tens
or hundred times larger network than this. Literally, converting an unlimited
opportunity to a limited income position. The matrix MLM compensation plan
possesses limited width.
Some MLM companies use variations of matrix MLM plan like 3x2, 2x2 matrix
cycles to regulate their amount of compensation by completing matrix cycle. Although
there exist many models to the matrix plan including the Forced Matrix compensation
plan, The basic concept of the matrix plan remains the same.The distributors must help
their downline members in the growth of their organization because there is the limited
width of Matrix. In the Matrix MLM compensation plan when the front line becomes
full, the distributors have to sponsor new recruits deeper into their down line.
Consequently, these new distributors are allocated to the next available position. As
plans develop, Distributors will have the privilege to allocate positions to these new
distributors.
These features made this structure more attractive.It gives distributors more control
over their business and increases the amount of teamwork.

The most boosted benefit of matrix plans is its ability to spillover, this unique
characteristic of matrix plan will motivate your downline distributors to sponsor more
into their downline also and eventually benefits you. that is, once you recruit the
maximum number of distributors you are allowed on your first level, Everyone else you
sign up after that will spill over into your next level, and possibly even into deeper
levels, depending on the number you personally sponsor. Ergo, those below you recruit,
and spillover distributors below them will stay motivated, downlines will "go deep"
faster, and downlines can benefit from their uplines activity, resulting in motivation and
support coming from both directions.
Some organizations included additional tactics like infinite bonuses and roll up
compression enabling diligent suppliers to generate income on levels specified outside
the detail of the strategy to make Matrix Plan more eye-catching. However, Consider
the fact that despite the number of these eye-catching rewards, Only a few suppliers
have the effective resource to generate them.

MLM Companies can make more attractive Forced Matrix Plan by increasing the depth
for bonuses and compensation; some MLM companies can reduce the width in this
regard. We can say the Matrix Plan have potential for new comers as well as old
members.

What makes the matrix plan unique is the limitation to building width in your
organization. The problem with a model of this type is that while it looks great on paper,
it is difficult to achieve in the real world.

The most obvious, and most hyped, benefit to the Matrix plan is the potential for “spill-
over.” Spill-over occurs when you have maximized your first level and all sponsored
directly by you afterward “spill” to subsequent levels. The point of this is to provide
support to your downline, allowing you to build an organization faster. One benefit of
this effect is that a new business owner could actually end up with two sponsors; the
one who sponsored them and the one under whom they fall in the matrix.

One study conducted to examine the effect of such a narrow focus revealed that once a
business owner achieved three downline, either through their own efforts or through
spill-over, they would not or could not quit. Based upon feedback from participants,
this effect was attributed to fear of loss.

Compensation in a matrix plan tends to be maximized further down than on than other
types of plans, at least on paper. Since the width is limited, and organizations tend to
go deeper in matrix plans, so do the levels bonuses are paid on. It is also much easier to
predict how much you will earn on each level, since you will know exactly how many
people will fill each one. Generally, matrix plans are simple and easy to explain and
understand.

According to another study, MLM participants will sponsor 2.6 new business owners
on average. In other words, if your matrix width is greater than two, you will not likely
see any spill-over. But it is important to recognize that this is not the median, but the
average. You should carefully consider the following points when evaluating a matrix
compensation plan.
 Width versus depth relative to payout: for example, you will probably make more
money with a 5 x 6 matrix with a 40% payout.
 Check to see if you get paid on every level
 What kind of products lend themselves to matrix plans? In a word – all.
Over to you. Do your MLM company use the MLM Matrix compensation plan? How
is it working for you?