Lesson 3: Choosing the Right Plan for Your Brand

If you know every distributor by name and can calculate commissions by hand without errors, you are early stage. Use unilevel with 3-5 levels and a flat commission rate (e.g., 10% on all levels). This is easiest to explain, easiest to track, and builds trust. Your distributors understand exactly how they earn. No software needed. Revisit this plan when you hit 50 active distributors or when spreadsheet errors become common.

At 50-200 distributors, introduce commission tiers (e.g., 5% at $0-1000 volume, 10% at $1001-5000, 15% at $5000+). This rewards top performers and incentivizes growth without changing the core structure. You can still use a spreadsheet, but now you need a clean template and monthly audits. Consider moving to a matrix plan if you want to reward width as well as depth. This is where many networks introduce weekly or bi-weekly payout cycles.

At 200+ distributors, spreadsheet errors become expensive. Introduce binary or board plans if your brand culture supports high-payout, high-churn models. Otherwise, stick with tiered unilevel but invest in software (Stripe + Notion or a dedicated MLM platform). At this stage, you no longer know every distributor by name. Automation saves time and reduces errors. The cost of software ($50-300/month) is cheaper than the cost of a single commission error.

If brand consistency matters more than commission breadth, use a flat or low-depth plan. Example: 10% on direct sales only, no downline commission. Or unilevel with only 2 levels. This keeps the focus on product quality and customer service, not recruitment. Distributors are brand ambassadors, not recruiters. This works for luxury goods, artisanal products, and mission-driven brands. Payouts are lower, but churn is also lower because people join for the product, not the money.