Compensation Plans-4 Warning Signs That Your MLM Check Is Not Safe From Your CEO

Networking isa wonderful opportunity where average people can make a huge difference in their financial future.  But it does come with some warning….I don’t want to frighten people away from networking; but there are 4 warning signs that your MLM check is not safe from imageyour CEO, the crooked evil opportunist.

Most people just sign up and never do any research, then a few months down the road when they are failing and frustrated networkers, wondering why?  Do you know what to look for in a company and the opportunity attached to it (the compensation plan)? Most people don’t know the answer to that question!


  1. Before joining any opportunity you should do your OWN due diligence.  YOUR due diligence!  Don’t leave that up to your friend or your sponsor.  Chances are they did not research the company either and even their upline may not have done their due diligence.  It creates a long line of the blind leading the blind who didn’t take their business opportunity seriously enough to check everything.
  2. If you don’t know what to look for, that would normally raise red flags, then you don’t know what could be a problem even if it were right in front of you…so education is key…know what  you should be looking for and where to look.
  3. Be sure that you have the Policies and Procedures in your possession BEFORE you sign up; so you can study them and even take them to a lawyer or someone who has studied this sort of legalese, to be certain that the contract is fair for both you and the company.  Make sure the contract is not leaning more in the company’s favour.
  4. Be sure to study the compensation plan.  If you do not understand compensation plans…most people do not…they see some circles in a presentation and think they only need to find 2 or 3 people to generate a good income.  Compensation plans are much deeper than this and require some careful research and understanding of the numbers.  

If you  look at any company’s policies and procedures, for example, and see that there is aimage non-renewal clause this means that the company  can decide NOT to RENEW your contract for any reason or for no reason at all.  This means the company CAN terminate you for any reason with or without cause.

This is not a good clause to see in a contract because:

  • Companies from time to time decide that they would like to change the business model from networking to retailing…this my friends spells TERMINATION of your contract.    
  • Many times distributors have been terminated because the company was going through financial trouble.  When they become this financially strapped they will go looking for a clause to use against you.    
  • That’s a bad thing, because if you build up a nice pay check and they decide they would rather not renew your contract because they need your check to pay for their lights, leer jets, big fancy office building, large legal team and office staff,  you may be terminated and others to meet their financial burden.

Now you may be saying to yourself that all contracts are written this way and they would never terminate me. 

Not all contracts are written this way but be sure that  if your contract is riddled with the word”terminate” believe you me, they will use it (when necessary and for the companies greater good) and terminate anyone.

In 2008, we declared war on losing money and maxing out our credit cards.  If you’d like to read the free report that showed us how we could pay off our credit cards and will turn things around for you, then be sure to download Are You Walking Past A Fortune?    

Commit To Success Today
Dave and Darlene Mills
Leadership With A Vision


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Dave and Darlene Mills

Welcome and thank you for visiting our blog. We are Mentors with "Mentoring for Free". A community of volunteers who believe in the value of education, personal development, and in sharing what we know that works to build a solid online business. We use this system to build our business and can be used with any MLM/Network Marketing company. We devote much of our time mentoring ANYONE in ANY company to build THEIR personae so they too acquire the skills they need to be successful. We will be more than glad to give you 100% of our effort and support. Today, Life is Grand!! We will never look back!! Darlene and Dave Mills "Be a Mentor With a Servant's Heart"

One thought on “Compensation Plans-4 Warning Signs That Your MLM Check Is Not Safe From Your CEO

  1. Hey Darleen and Dave Hope you are both well, I know you both have studied compensation plans to the bone and thought id share my ideas as well.

    When you get into network marketing, you can’t expect to get the same kind of salary-based compensation that you used to get from the office you used to work with. The fact is that you can make a whole lot more money from Multi Level Marketing compensation plans. The problem is that if you don’t understand what the plans are and how they are carried out, you might just give up on Multi Level Marketing itself. Here are some of the plans that are out there in the networking industry and how they work.

    The Binary Plan – This Multi Level Marketing plan actually has two branches. This plan can be different among the companies that are out there. But the goal is simple with this plan. Basically, there is a kind of quota that each of the branches needs to meet and each of the plans has to be successful in sales. If one branch fails then you will be sure to get a lesser amount when it comes to Multi Level Marketing compensation.

    The Stair Plan – MLM distributors are actually quite fond of using this kind of MLM compensation plan. It works by promoting people if they are successful in selling a lot of a certain product. As a distributor, it is probably this plan that makes the most sense for them. However, it may not hold true for everyone within a network structure.

    The Matrix Plan – This is a basically a plan that uses a computer to make a few of the decisions in the multi level marketing network. A program is used to assign members of a network to other people within the same network. By deciding to have people work with other people based on their skills, this can actually help improve the quality and volume of sales for the company. On a personal level for the network, they can find the people that they are most successful with. The computer is not the end-all decision maker in this Multi Level Marketing compensation process and should not be depended on all the time.

    The Unilevel Plan – This is a Marketing compensation plan where no promotions take place. A Multi Level Marketing company will just pay a certain amount if there is a certain quota of sales that has been met. That quota is agreed upon between the distributor and the marketer.

    Rewards Plans – Aside from Network Marketing compensation, there are also other ways that certain distributors will entice their downline to work harder. A rewards plan is given wherein a company gives out bonuses that come in the form of money and even holiday trips. This shows the appreciation of the distributor to the marketers efforts but not all Multi Level Marketing companies will offer such a program.

    Breakaway Plan – This is where a certain part of a network may start to be more successful in the long run than any other in the same network. This compensation plan offers the opportunity for a part of a network to actually break off and function as a separate and independent business.


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