MLM ArtisanLesson 1: The Four Core Compensation Structures
Four Ways to Pay Your Network
Each structure creates different incentives and complexity. Pick the one that fits your brand.
Plan Mechanics at a Glance
Unilevel: Linear Depth
You earn commission on sales from people you recruit, and on their recruits, down to a fixed depth (usually 5-10 levels). Each level earns a percentage of sales, declining as you go deeper. Example: 10% on level 1, 5% on level 2, 2% on level 3. No width limits. Easiest to explain and calculate by hand.
Binary: Two-Leg Balance
You have exactly two legs, left and right. You earn commission on the weaker leg up to the volume of the stronger leg. Example: left leg has $10K volume, right leg has $20K volume. You earn on the $10K (the weaker side). Binary encourages balanced team building but penalizes imbalance. Requires careful tracking.
Matrix: Grid Structure
You occupy a position in a fixed grid, say 3x5 (3 wide, 5 deep). You earn commission on all positions you fill in your grid. Positions beyond your grid spillover to your upline. Incentivizes recruiting width and depth within limits. More moving parts than unilevel.
Board: Rotating Cycles
Distributors buy into a board, usually 2x2 or 3x3. When a board fills, the person at the top receives a payout and cycles out. Everyone else moves up one position. New recruits fill the bottom. Highest payouts but requires constant recruitment to sustain.
Quick Comparison
| Feature | Unilevel Simplest to explain and track Easiest mathLinear growth | Binary Encourages balanced recruitment Moderate mathBalanced incentive | Matrix Spillover rewards team builders Complex mathGrid-based | Board Highest payouts, highest churn Simple mathCycle-based |
|---|
Lesson 1 Recap
-
Unilevel is linearOne upline, commission down multiple levels. Best for simplicity.
-
Binary balances two legsEarn on the weaker side. Encourages balanced building.
-
Matrix uses a gridFixed width and depth. Spillover moves recruits up the chain.
-
Board cycles payoutsBuy in, fill the board, collect, cycle out. Highest payouts.