How does MLM Matrix Plan work?

The Basic Definition of the Matrix Plan

Matrix Plan is basically a pyramid-like structure, i.e., ordered into a certain number of column (depth) and row (width). These rows (seen horizontally), and columns (seen vertically) limit the total number of distributors to whom you can sponsor throughout the first stage of functioning.

It can be calculated by the formula: 'width X depth.' A matrix plan is even called a 'Ladder Plan' and a 'Forced MLM Matrix Plan.' The members who’re managed in a specific depth and width are being compensated as soon as they attain the desired level. Matrix Plan restricts the row (width). It inspires a company to hire more and more members in the downline in order to earn an increased amount of benefit.

Multi-level marketing organizations can form more compelling Ladder Plan by enhancing the depth (column) for compensation and bonuses. Some of the MLM organizations decrease the width (row) in order to do so. That’s why it can be said that the matrix plan holds capability for old and new members altogether.

How does MLM Matrix Plan function?

The most famous matrix MLM plans are 3X9, 2X12, 5X7, and 4X7. The matrix plan functions by adding the default members to the very first level. And, all the members who register after concluding the first level, would spill over into the following level, and maybe to the more in-depth levels according to the matrix plan.

The feature that differentiates the matrix plan from other plans is that its width is limited. For instance, if you opt for 3X3 matrix MLM plan, then you are allowed to recruit three members to the very first level and the remaining members will spillover to the next levels having a depth of exact three level. It is a 3X3 matrix that’s why it will be having three numbers in depth as well as in width.

This Ladder Calculator can also be utilized to calculate certain commission amounts to be used for MLM companies. This calculator also helps in computing monthly income for MLM companies depending on the sales density, recruitments, and much more. The compensations can also be called bonuses, which are extra add-ons that the customers receive for reaching the set target. In the MLM Matrix Plan, various types of compensation plans are being used to activate and stabilize the Matrix structure.

Various Compensation Plans

The Compensation Plans are:

1. Sponsor Bonus

Sponsor bonus can be earned by recruiting or selecting new members to the already established network. It simply means that sponsor bonus is provided to motivate the existing members so that they keep on adding new members to the system. Sponsor bonus is earned after getting the first level done. This bonus is earned when the members associated with downline are added to the front line.

2. Position Bonus

Position bonus is an alternative to get benefited with some extra income. The downline members can opt for position bonus when they recruit new members, and they are added to their matrix. The position bonus percentage can be decreased or increased according to the need.

For instance, let’s consider a 3X3 matrix; in that case, a member will be provided with the position bonus only when any new member gets added to his/her three down levels.

3. Level Bonus

Level Bonus is earned when the new distributors are recruited. This kind of bonus is received when the members associated with the front line, recruit new members and then get a bonus through their sales. Then the recruited members can also hire new people so that they may get benefited from their sales. That’s why, it is called level bonus, and it is allowed to be extended to the nth level.

4. Matching Bonus

The criteria to receive the matching bonus changes company by company, because the companies’ set policies decide it. Matching bonus is the compensation. i.e., given to the sponsors. If a new member receives any of the rewards like matrix or level, then his/her sponsor is also provided with a specific percentage of that particular amount.

5. Matrix Bonus

Matrix compensation is a bonus amount that is given to the distributors. This bonus is provided to those members who get successful in filling their matrices with the members who get added to the downline.

For instance, if MLM company follows 3X3 matrix plan, then the members are allowed to add three members to their first level downline, nine members to their second level downline, 27 members to their third level downline, and 81 members to their fourth level downline.

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Kamini is a technical content writer and freelance blogger. She writes for wide range of topics in technology, currently she is writing on Mlm Software India.