Differential MLM Plan

Differential plan, is a direct selling compensation plan that runs on the difference of the commission between the sponsor and the members. In this plan, a distributor receives the difference between the amounts for which he himself qualifies and the amount for which his first level distributor qualifies. In this plan, commission in calculated on the purchase of PV/BV – Personal Value (Point Value)/Business Volume which is pre-defined on products. PV are the points that you have to earn for achieving your bonus. BV is the price that the company will pay you. Also, the commissions depend upon the difference between the existing members (up line) and newly added members (down line) PV percentage and so it is called as “Differential Plan.” The percentage of commission can increase as per generation level and total turnover of re-purchase.

In this type of compensation plan the company will generally pay you a percentage of the volume generated from each level. For example, you would be paid 5% commission on all volume generated by your first level, 4% on all volume generated by your second level, 3% for your third level, 2% for your fourth level, and 1% on your fifth level. See the diagram above. Besides the fact that you will be earning a commission on everyone in your down line up to a certain level, another advantage of the Forced Matrix Plan is that once you've filled your frontline, your focus can now be on developing the frontline of your down line, earning you a higher commission.

In this compensation plan, a term ‘slab’ is also being used wherein there is pre-defined range of group PVs to decide the percentage of the income distribution. For example: members with group PVs in the range of 100-200 can avail 5% PVs. In this case, the slabs are – 100-200 and 0-5%. Differential income is always distributed as per fresh (New) PVs in the payout period. Also, defining slabs may depend on either cumulative or fresh PVs depending upon the business.

Advantages of Differential Plan

1. A person can sponsor the unlimited number of a distributor in his down line.
2. As there is no concept of a spill in the differential plan, so all direct are added directly to the network of the sponsor.
3. The sponsor will get paid from the business for any of his directs. Also, you get paid for unlimited depth in the network.
4. Differential Plan is a long-term plan so the risk factor is very much less.
5. Different Types of PV/BV’s in Differential Plan.