How does a Unilevel MLM Plan Work?
Unilevel compensation plan is a single level plan with unlimited members on the front-line. This plan ensures maximum benefit for the collective effort of distributors. Network marketing companies with unilevel mlm compensation plan use Unilevel MLM software to automate their marketing, prospecting, recruiting, training, and payout processes effectively.Read offline
What is Unilevel MLM Plan?
Unilevel MLM compensation plan is defined as a compensation plan that has only one business level, and all the sponsored members of a distributor are placed directly in the first level.
There is no spillover and the efforts made by a distributor on recruitment are directly beneficial to him/her. It is a universal plan, the plan can be seen in all the compensation plan.
Usually, the sponsorship tree of a distributor in any compensation plan is represented using a unilevel plan. Thus, the plan is seen in all MLM compensation plans hence known as ‘universal plan’.
Companies who want to follow a simple compensation plan choose a unilevel compensation plan. There are no complications like spillover or other criteria, basically, the plan is simple to explain.
However, MLM companies need to track their business properly to make steady progress from time-to-time. How can the companies achieve it? It is by implementing a data-driven MLM software that can manage the entire business processes easily.I want to learn more about unilevel MLM software
How does the Unilevel MLM plan work?
Just like the name suggests the plan is “uni” level i.e only one business level. Unlike other plans with multiple levels for member placement, in unilevel plan all the sales referrals (new members) made by the sponsor get added to the same business level, one after the other.
Let’s make the explanation easier with an example. Consider ‘Distributor X’ joined the business and sponsored 5 new members. These 5 members will be added to the same business level i.e level 1, that’s why the plan is simply known as ‘unilevel’ plan!
The most important highlight of the unilevel plan is, the plan lets distributors add unlimited members on a single level. Thus unilevel compensation plan is also known as ‘single level plan’. There is no limit for ‘width’ in new sales or recruits and this increases the compensation of a sponsor. The sponsor is directly beneficial as the sponsored members are directly placed on the same level.
What happens to the new sales made by Distributor X’s network?
Say, ‘distributor1’ who is under ‘X’ recruits new members. These new referrals are directly placed under distributor1. All the members referred by this distributor are added to this level. Thus the plan provides maximum compensation for the efforts of a distributor. The plan looks more like,
Apart from direct compensations, there are other compensations available up to 5-10 business levels. In this case, distributor X gets benefited from the downline recruits up to 5-10 levels set by the company.
This is how a unilevel tree is built!
A distributor becomes a part of the unilevel plan once he/she purchases an enrollment package. After enrollment, the user becomes a ‘distributor’ and is then added to the genealogy tree under the sponsor.
The distributor now gets a new position as a downline on the tree underneath the sponsor.
Unilevel compensation structure
As mentioned above, unilevel compensation eligibility for a distributor is limited to 5-10 business levels as per company regulations. The commission payment varies for each business level. For example,
- Level 1: 10% of Sales volume(direct bonus)
- Level 2: 5% of Sales volume
- Level 3: 4% of Sales volume
- Level 4: 3% of Sales volume
- Level 5: 2% of Sales volume
- Level 6: 1% of Sales volume
Network marketing companies might include some criteria like a distributor can earn only 200% of the enrollment fee as compensation, based on ranks, etc.
Like the binary compensation plan, unilevel also makes distributors active by making the group members motivated. Compensations are less compared to other compensation plans as there is no spillover process.
Compensations in unilevel plan
Compensations in unilevel are based on individual performance and group efforts. Let’s see how popular compensations look like in a unilevel plan.
Advantages/benefits of unilevel MLM plan
Simple plan: The plan is easy to understand for distributors as there involve no complexities.
Solid income: Distributors will get solid income potential from the individual efforts as well as from the team.
Less compensation overflow: Companies won’t lose too much money as compensations compared to other plans.
Universal plan: A plan suitable for all types of network marketing business models.
Hybrid unilevel plan
The Unilevel plan is customizable by adding other compensation plans like matrix plan, binary plan, etc. Companies combine more than two compensation plans if required. Unilevel plan is mostly implemented in platforms like e-commerce, trading platforms, etc. as a compensation structure.
Usually, network marketing companies combine multiple plans to make their business more beneficial and attractive to distributors.
Unilevel MLM calculator
It’s always important to know whether a plan is beneficial for a direct selling company or not. Before choosing unilevel as your marketing plan, it is best to use dedicated tools to analyze the profit, and analysis by providing your business inputs.
Unilevel MLM calculator lets companies or individuals assess the plan and simulate for results.
Provide the necessary input and simulate the results to check whether the plan looks apt for your business or not.Unilevel MLM calculator
Similar compensation plans
Australian X-up plan
A plan that looks exactly like a unilevel compensation tree. However, the plan process comes with an extra element - ‘X’.
The extra element X has a value, and if the value is given 2, then the plan is known as a 2-up plan. The sales volume of the first two direct downlines will be transferred to the direct upline.
In the above example, the sales volume of two downlines sponsored by distributor A transfer to distributor Y. Y is the parent of A, similarly, the sales volume of all the X number of distributors gets transferred to the parent.
Thus, the plan is named after the value of X. If X is 2, then the plan is a 2-up plan, if it’s 3 then the plan will be known as a 3-up plan.
Popular companies using unilevel compensation plan
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