Finally there comes the issue of the compensation plan. There are many compensation plans in the network marketing industry and there are a few things to consider when evaluating them.

Assumptions & Facts
We can start off with an assumption that nearly all network marketing participants, professionals and new representatives alike, agree on. That is that regardless of the opportunity it takes about the same amount of work and effort to find and enroll new business participants. Further, research shows that the majority of folks enrolling in a network marketing business never reach down in the multi level compensation plans to take advantage of percentage payouts beyond the second level.  Finally, the average individual in network marketing enrolls about three other people.  These are simply the facts.

Hypothesis & Evaluation
These being the facts we should evaluate a compensation plan to make sure that the average individual (usually a part timer) can really earn an income and be profitable in a reasonable period of time based on a realistic view of what the average individual can achieve. Therefore, we should take a hypothetical situation of an average individual enrolling some folks, we'll say only four (Yes I know its one more (1) than the average but the numbers work more evenly for this article) new business participants and helping each of them to enroll four. This would mean a total of 20 business participants, call it our 20 Club, in the entire organization.  Thats it, no more, because the average person doesn't usually get paid beyond the second level in a multi-level compensation plan.

Now we must assume that everyone does some ordering or volume because a true and viable (Not to mention legal) network marketing company compensation plan pays on the sale of products or services (Not on Enrolling New Members). So we will assume for our evaluation that each person in the organization orders $100 each month of a consumable product. This creates a volume of $2,000 in our 20 Club organization.

Evaluate Residuals not One Time or Quick Start Bonuses
Next we need to ask the question; what will the average individual earn from this volume each and every month in ongoing residual commissions? Remember, we do not want to concern ourselves with enroller or quick start bonuses because they are not a measuring stick of what one will earn residually on the volume of products moving through the organization that has been created. The focus here is what will the average individual earn on an ongoing basis for the time, money, and effort they have put to this point?