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MLM Varieties


The binary compensation plan is one of the most common types of MLM compensation structures. In a binary plan, each distributor or salesperson recruits two new distributors, forming two "legs" of their downline. These two legs are usually referred to as the "left leg" and the "right leg."


In a matrix MLM plan, distributors are limited to a specific width and depth. For example, a 3x3 matrix plan means each distributor can have three frontline distributors and the depth is limited to three levels. Commissions are typically based on a fixed matrix structure.


A compensation plan is another popular structure used by MLM companies to reward their distributors for sales and recruitment efforts. Unlike the binary plan, where distributors are limited to building two legs, the unilevel plan allows distributors to build a broader and typically deeper network of recruits.


The breakaway plan is based on achieving certain sales or recruitment targets. Once a distributor meets these targets, they "break away" from their upline and become an independent leader. They then earn a percentage of the sales volume generated by their entire downline organization.

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