MLM Compensation Plans - The Matrix
This plan looks like a grid in which a distributor is limited to a certain number of recruits at each level. For example,
in a 3-by-5 matrix, each level down to five can have only three downline distributors.
This type of plan is sometimes considered to be more gimmicky than others. Why? Because due to the width
limitations, new recruits may find themselves placed underneath upline distributors who did not directly recruit them.
In a three-wide matrix, for instance, the fourth distributor you personally sponsor would be placed under one of the
first three distributors you personally sponsored (your first-level distributors).
This automatic filling of spots in the matrix can be attractive to novice distributors if they sign on with strong leaders
who help fill their grids. Also, it works well in companies where most of the products are used by the distributors,
rather than sold to outside consumers.
Matrix plans have been subjected to attacks by regulatory agencies because they sometimes look like "a game." By
and large, they have not had a successful record in the industry, and they foster nonproducers, which makes the
upline distributors resentful. Nevertheless, several major companies operate matrix plans. Only time will tell whether
these plans are here to stay.
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