Making money in this industry depends on a few fundamental factors: the soundness of the company, the quality and the market of the products, and your own enthusiasm, commitment, and hard work.

In every serious network marketing company, some people are making six-figure incomes, and lots are making little or nothing. The latter are often people who dabble in network marketing with the "I'll try it for a couple of months" attitude.

That doesn't earn serious money. Serious money means serious work! Compensation plans also make a difference in your likely earnings. There are three prevalent types of compensation plans, each with a very different effect on group togetherness and potential earnings.

Binary Plans

Binary plans start with one center and a left and a right "leg." Each person receives commission on his group's sales volume in a given time period, often on a weekly basis. This type of plan encourages strong communication between upline and downline. New distributors are continually placed underneath a distributor in the downline, regardless of whether he actually recruited the new person. Thus, you may receive income from distributors placed under you in your downline who were actually recruited by your sponsor. This is called "spillover." He recruited more than two people, and his extra recruits "spilled over" into your downline.

In the opinion of many professional network marketers, binary plans are the most equitable and lucrative compensation plans around, but they are fairly new. Only a few companies feature them. This arrangement guarantees that you will always receive income on the sales volume of all distributors under you. There are no breakaway groups. Binary plans build deep for long-term residual income. It is said, "Wide for show, deep for dough!"

Breakaway Plans

Breakaway plans are older and more common in this industry. In a breakaway, the sponsor recruits as many people as he can and places them on his first level. They in turn recruit others under them who are placed on the sponsor's second level or below. Income is generated from retail sales margins, as well as from product discounts offered to the sponsor as he reaches each successively higher "step." He also receives commission on his group's sales volume.

When one of these downline groups surpasses a specific amount of sales volume, that group "breaks away" from you and becomes independent. Generally, the original sponsor then earns a much smaller commission on that breakaway group's future sales volume. This arrangement makes it much harder than does a binary plan for a sponsor to sustain a constant, high income.

Breakaways tend to form a diamond shape. That is, you recruit a few people on your first level, each of them recruits a few more, and by the time you get to the 3rd or 4th generation, the lines are maximized. The structure then looks like a rough diamond, with the maximum number of distributors on levels 3 and 4. The trouble is, the company probably pays out the highest commissions on levels 5-8!

Studies of commissions earned in this type of compensation plan show that most distributors never develop their lines "deep" enough to reach the highest payout levels. The second negative is that if someone in the downline is a booming business builder, it won't be long before he "breaks away" from your group and becomes independent, taking his downline along.

Matrix Plans

Matrix plans are known as the 5 x 7 or 3 x 10 type plans. What that means is that you recruit five people on your first level, and you earn commissions on all distributors recruited by these first five down through the 7th or 10th level, whatever the plan specifies.

Look at such plans very carefully. To make money, the highest payouts should be on levels 3 and 4, not deeper. Also, this type of plan does not particularly encourage group support or cohesiveness.

Conclusion

Persuasion is the missing puzzle piece that will crack the code to dramatically increase your income, improve your relationships, and help you get what you want, when you want, and win friends for life. Ask yourself how much money and income you have lost because of your inability to persuade and influence. Think about it. Sure you've seen some success, but think of the times you couldn't get it done. Has there ever been a time when you did not get your point across? Were you unable to convince someone to do something? Have you reached your full potential? Are you able to motivate yourself and others to achieve more and accomplish their goals? What about your relationships? Imagine being able to overcome objections before they happen, know what your prospect is thinking and feeling, feel more confident in your ability to persuade. Professional success, personal happiness, leadership potential, and income depend on the ability to persuade, influence, and motivate others.