mayapple
December 27th, 2004, 03:02 PM
Please note: This was not written by me. Taking no responsibility for it. Simply posting it in case it's helpful to anyone here. Happy Holidays.
Mlm matrix
Overview:
A mlm matrix is mainly a unilevel plan with the primary focus on the limited-width structure. Many of the early proponents of this type of mlm plan promoted some variation on the theme of "everyone will become a sales leader." So the idea was that the structure of the plan would make it easier for everyone to attain and maintain.
Commission types used:
Matrix plans originally used level commissions paid on personal volume exclusively. So it was, in fact, a traditional unilevel plan that limited the number of first levels any one distributor could sponsor. In the mid-1990s, matrix plans began to change; now, they often have a second compensation paid on an enroller downline. Another change to come along was the advent of multi-center matrix plans which basically allowed distributors to have more than one position in the downline.
Details:
Here is the crux of the problem: not everyone is a sales leader. But since the early versions of this mlm plan treated everyone like a sales leader, they didn't have long-term success in the industry. As a result, these days when you see a structure plan, it's almost always combined with some other type of compensation. In this plan, rather than focusing on the percentages or even on the rules, you focus on the structure.
The word "matrix" is a misnomer; it's really a tree structure with more than two nodes on it. A forced matrix is a structure that pays a unilevel compensation, but only allows a distributor to recruit a certain number of first level distributors, typically three to five. The theory behind this type of plan is that it requires the upline to help the downline. This ensures that a few distributors don't keep all the good people for themselves.
The payout in a forced mlm matrix is almost always a unilevel compensation. A relatively new twist on the forced matrix is the enroller compensation. As an "enroller," you can still get credit for the sales of your recruits beyond the three- to five-person limit, if you place additional recruits under one of your first-level people.
Originally, two types of forced matrixes were most common: a 3x9 structure (three first-level distributors wide and nine levels down from the recruiting distributor) and a 5x7 structure (five first-level distributors wide and seven levels deep). However, forced matrix structures have typically produced low compensation checks for two main reasons. The first is the issue-that no more than forty percent of the participants sponsored anyone-and the second is that stacking was rampant in the original matrixes.
This stacking mentality can cause big problems for a mlm company. One known company of had about 90,000 distributors. If the mlm matrix were perfectly filled, the downline should have been about thirty levels deep, but actually had three times that many levels; over 90 levels deep!
This is a small summary of a mlm matrix plan.
Strengths.
1.There isn't a lot of maintenance.
2.The plan is not difficult to deal with.
Weaknesses.
1.Unlike unilevels, it doesn't reward one specific behavior. It tends to pay out in an arbitrary fashion.
2.The distributors can't get to any earnings level very quickly, and they spend a long time "crossing the desert" until they can reach a sustainable earnings level.
3.In the past, distributors have spent a lot of time waiting for someone else to build their mlm business. They get in with the hope that someone in their upline will sponsor a lot of people and hence will build their organization for them.
4.Stacking is a problem, and this causes sales volume to move out of the distributor's payline very quickly.
Summary:
The challenge structure-based plans must overcome is that the plan must reward the distributors for working with leaders where they find them-because it's impossible to predict where you're going to find leaders.
Resource: http://www.vipgo.net/ab/mlm-matrix.html
Mlm matrix
Overview:
A mlm matrix is mainly a unilevel plan with the primary focus on the limited-width structure. Many of the early proponents of this type of mlm plan promoted some variation on the theme of "everyone will become a sales leader." So the idea was that the structure of the plan would make it easier for everyone to attain and maintain.
Commission types used:
Matrix plans originally used level commissions paid on personal volume exclusively. So it was, in fact, a traditional unilevel plan that limited the number of first levels any one distributor could sponsor. In the mid-1990s, matrix plans began to change; now, they often have a second compensation paid on an enroller downline. Another change to come along was the advent of multi-center matrix plans which basically allowed distributors to have more than one position in the downline.
Details:
Here is the crux of the problem: not everyone is a sales leader. But since the early versions of this mlm plan treated everyone like a sales leader, they didn't have long-term success in the industry. As a result, these days when you see a structure plan, it's almost always combined with some other type of compensation. In this plan, rather than focusing on the percentages or even on the rules, you focus on the structure.
The word "matrix" is a misnomer; it's really a tree structure with more than two nodes on it. A forced matrix is a structure that pays a unilevel compensation, but only allows a distributor to recruit a certain number of first level distributors, typically three to five. The theory behind this type of plan is that it requires the upline to help the downline. This ensures that a few distributors don't keep all the good people for themselves.
The payout in a forced mlm matrix is almost always a unilevel compensation. A relatively new twist on the forced matrix is the enroller compensation. As an "enroller," you can still get credit for the sales of your recruits beyond the three- to five-person limit, if you place additional recruits under one of your first-level people.
Originally, two types of forced matrixes were most common: a 3x9 structure (three first-level distributors wide and nine levels down from the recruiting distributor) and a 5x7 structure (five first-level distributors wide and seven levels deep). However, forced matrix structures have typically produced low compensation checks for two main reasons. The first is the issue-that no more than forty percent of the participants sponsored anyone-and the second is that stacking was rampant in the original matrixes.
This stacking mentality can cause big problems for a mlm company. One known company of had about 90,000 distributors. If the mlm matrix were perfectly filled, the downline should have been about thirty levels deep, but actually had three times that many levels; over 90 levels deep!
This is a small summary of a mlm matrix plan.
Strengths.
1.There isn't a lot of maintenance.
2.The plan is not difficult to deal with.
Weaknesses.
1.Unlike unilevels, it doesn't reward one specific behavior. It tends to pay out in an arbitrary fashion.
2.The distributors can't get to any earnings level very quickly, and they spend a long time "crossing the desert" until they can reach a sustainable earnings level.
3.In the past, distributors have spent a lot of time waiting for someone else to build their mlm business. They get in with the hope that someone in their upline will sponsor a lot of people and hence will build their organization for them.
4.Stacking is a problem, and this causes sales volume to move out of the distributor's payline very quickly.
Summary:
The challenge structure-based plans must overcome is that the plan must reward the distributors for working with leaders where they find them-because it's impossible to predict where you're going to find leaders.
Resource: http://www.vipgo.net/ab/mlm-matrix.html