Compensation Plan: Join Online Businesses With Good Compensation Plans
A good compensation plan is one of the major factors to consider when selecting the best online home business. Before joining any online program, find out more about their payment plan. A good plan is one of the secrets behind your business success in network marketing. If you join an affiliate marketing program with a weak compensation plan, you burn out before achieving your goals. Your online home business will be destined for failure. It’s because you join a company to market its products for a commission. If you want to earn a reasonable and growing income, then you need to join a business that offers high commission. It’s the reason why you should focus on businesses that have a profitable compensation plan.
What is a compensation plan?
Before going into the details, let’s understand what a compensation plan is. It’s a plan outlining the details of how the commission of independent agents is determined on the sales made by themselves and those of their downlines. In network marketing, independent agents are distributors of goods and services. They are encouraged and supported to build their marketing team or sales force through recruiting and training other independent agents.
When you join an affiliate marketing program, you agree to market the products/services of the company to other people to earn a commission. The company provides you with all the marketing tools. It also gives you a compensation plan, stipulating how you will earn income from distributing their products/services to other people.
As an affiliate, you operate as an independent contractor. You work freely on your own but following the policies and terms of the company for which you agree to market the products/services. You are self-employed. The harder you work the more you increase your income. But if you join a company with a poor compensation plan, you will not earn much however hard you work.
How is a good compensation plan like?
A profitable compensation plan should offer a high commission bonus and residual income as well. Let me explain this further. When you join a program, the commission bonus you earn when you buy a product should be high. The same with other people you refer to buy the products. A good compensation plan should pay at least 40% on the sales and purchases you make.
Secondly, a good compensation plan should offer residual income. When you join an affiliate program, you recruit others to join. They also recruit other people to join the business. The trend continues like that up to several levels. A good company offers a plan where you earn commission and continue earning it from your downlines’ business activities up to some levels. We refer to this kind of earning as residual income. It is revenue earned indirectly from the people you brought into the business normally referred to as downlines. And it comes as a result of your previous work but not on your ongoing work. It enables you to earn commission perpetually, whether you are working or not.
Thirdly, a good compensation plan should have multiple streams of income. Relying on one source of income is like putting all your eggs in one basket. When it falls, you lose all your eggs. If the compensation plan offers you a chance to earn income from various sources, it’s, therefore, a lucrative plan.
Some companies give high commission bonuses and low residual incomes or vice versa. When searching for a home-based business, find a company with an equal balance of the two-income sources. Consider also the income streams offered by the company. That’s when you will succeed in your online business.
Why is a good compensation plan important when searching for an online home business?
1. When you start a business, you need to partner with a company that gives you high commissions. If you are paid little money for your efforts, you will find it difficult to gain momentum. It might require you to invest a lot of capital to take off.
2. Most people start online home businesses to supplement their existing income or to build a fulltime income. When they get a full-time income, they pull out of their current jobs/employment.
If you join a company that doesn’t pay a high commission bonus and doesn’t offer a chance to earn residual income, you will not succeed in business. High commissions enable you to start faster and to continue being in business. Residual income helps you to retire and continue earning income perpetually.
In conclusion, when you are searching for a good company with a good program, look for companies that offer a profitable compensation plan. It will enable you to earn a high commission bonus on your sales/purchases and residual commission from your team. Also important is the ability to earn from multiple streams of income. If you have any question, please use the comment section to leave your question.
Hello! My name is Charles Kiyimba, a creative engraver, a professional teacher, a passionate blogger, a confident graphic/web designer and the founder of Goleza Designers Ltd, an engraving business that turns images into real products. Through my hands-on experience, I share with you free helpful information on our products and services, business, marketing and personal development. Always dive in for more!