Hi Poon,
Pay plans, comp plans or marketing plans are the way in which a network marketing company divides the commission payments amongst its distributors. Compensation plans determine how much commission you will receive from the number of people you have on your various levels.
On paper some plans appear more lucrative than others. You need to look at how much of every dollar of product sold is returned back to distributors. Some companies return only 30% back in commissions whereas others may return 50%, 60% or even higher.
There are two fundamental aspects of a pay plan that determine its effectiveness. First, you have the structure of the pay plan. The breakaway, binary, matrix, Australian two-up, multiple phase, and the uni-level are examples of the different pay structures available in the industry. Secondly, how the bonuses are placed throughout these structures is important. Each of these structures have features that favor the heavy hitter, the company, or the part-timer. Pay structures that balance the potential commissions between these three categories provide a more secure income for all three. Traditionally, pay structures have favored the company and a few heavy hitters. Gradually, network marketing is maturing and a number of programs are providing a better balance between these segments. In my personal opinion, I believe the uni-level provides the greatest opportunity and balance for the majority of its participants.
For a complete expose on Pay plans by Mr Mike Akins have a read of "Science Behind Pay Plans" at
www.professionalnetworkers.com/5071412.html