Question
What is an MLM compensation plan?
What to do next:
- Read the compensation plan next to the income disclosure, not on its own.
- Mark which payments come from customer sales versus team activity.
- Note every monthly requirement needed to stay qualified.
Why this matters
The plan should be read alongside the income disclosure because rules for earning money are not the same as typical participant outcomes.
Look for customer sales, participant purchases, team volume, recruiting, rank maintenance, and monthly qualification requirements.
Questions to ask before joining
- What activity actually creates compensation?
- What must I do each month to stay qualified?
- Does the plan reward retail sales, participant purchases, recruiting, team volume, or a mix?
Related recruiting phrases
Helpful next pages
- Someone pitched me an MLM. What should I do?
- Before You Join an MLM
- Before You Pay
- Documents to request before joining an MLM
- MLM expense worksheet
- Scripts you can use
Sources
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Regulator guidance
Multi-level Marketing Businesses and Pyramid Schemes
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Regulator guidance
Business Guidance Concerning Multi-Level Marketing