Nov.

17

Nov. 17

INDEX

Sr.No

Chapter

Page No.

1.

Concept of MLM

2.

Terminologies used in MLM

3.

MLM Plans

17

1)Binary Plan

17

2) Daily Binary Plan

20

3) Hyper Binary Plan

21

4)Level Binary Plan

25

5)Matrix Plan

26

6)Growth Plan

29

7)Generation Plan

31

8) Board Plan

35

Nov. 17

Chapter 1

Concept Of MLM
1.1) Introduction to MLM:
Multi-level marketing (MLM), also known as Network Marketing, Matrix Marketing
or Chain Marketing. It is a business-distribution model that allows a company to market its
products directly to consumers by means of relationship referrals and direct selling.
MLM is a way of selling goods or services through distributors. Multi Level Marketing
(MLM) is an important component of the direct selling industry. Multilevel marketing plans
usually promise to pay commissions through two or more levels of recruits, known as the
distributors "down line."
Independent, unsalaried salespeople of multi-level marketing, referred to as
distributors, represent the parent company and are awarded a commission based upon the
volume of product sold through each of their independent businesses.
Distributors earn a commission based on the sales efforts of their organization, which
includes their independent sale efforts as well as the leveraged sales efforts of their
downline. Commissions are paid to multi-level marketing distributors according to the
companys compensation plan.
1.2) Examples of MLM Company
The most successful MLM scheme is Amway. It has millions of distributors
worldwide with sales in the billions. At the turn of the century, the average Amway distributor
earned about $700 a year in sales, but spent about $1,000 a year on Amway products.
Distributors also have other expenses related to the business, e.g., telephone, gas,
motivational meetings, and publicity material.

List of MLM Companies:

Influx Multitrade Pvt. Ltd - Pune
Image Multitrade (P) Ltd - Mumbai
Puja Syncotx (I) Ltd (PSM)- Bhilwara (Rajasthan)
Hide Park Farming (P) Ltd (BlueMormon)- Pune
Inspire India Marketing (P) Ltd Indore
Dhanvarsha Universal Trading Mumbai
GIC Mumbai

Nov. 17

1.3) Traditional business structure verses MLM:

In traditional business structure, companies having its own distributors on country

level, state level, city level and etc. for the distribution of product. So, in this structure, the
product price is get increased than its manufactured price because of distributors
commission, retailers commission, additional taxes such as transporting, manufacturing and
etc. so, end user get that product in some high cost. And as result companies business
growth get affected.
But in MLM, each customer itself a Businessman & End User is directly connected
to the company. So, he can get products in low cost as well as they can get incentives as
per the performance. So, they will get motivated & increase companies business.

Some other advantages of MLM over Traditional Marketing:

No need to stock up inventories of expensive physical products (that means
cash that would otherwise be spent could be channeled to advertising the
network marketing business)
No shipping cost involved, either by the network marketing company or it's
distributors.
High compensation payout to the distributors due to the extremely high
profit margin for the virtual products.
1.3) Advantages of MLM:
Fast Growth in Business.
Low manpower required for marketing, sales, advertising, etc.
Each of the members receives incentives as per the performance. So, they
will get motivated & increase their business.
The product is sold to customer at lower price than in traditional marketing.

Nov. 17

1.4) Need of MLM software:

MLM is the network marketing, there is large information is gathered or have to

maintain, and it is not possible to maintain in traditional formats. So this type of huge
information is get maintained by MLM software.

MLM or multilevel marketing software describes the tools to manage and organize
MLM accounts. Generally web-based and user friendly, MLM tools allow company to track
its customers and recruits, as well as organize and report day to day sales, revenue and
profit.

Nov. 17

Chapter 2

Terminologies used in MLM

Genealogy:
Genealogy is a graphical representation of member network. It shows tree
like structure of its downline.

Fig: (1): Genealogy/Tree

Tree:
Its a specific structure, in which member are placed. The root of tree is
company and branches of tree are formed by different members network.

Sponsor / Introducer:
It is the member who provides direct reference to its downline.
Ex In fig (1), U is sponsor for A & B.
Downline:
It is the term used to denote the group of members under one particular
member.
Ex In fig (1), A, B, C, D, E, F,G,H are the downlines of U.

Nov. 17

Leg Count:
Leg Count is the down count of a particular member on left side & right side,
i.e. left leg & right leg.
Ex - In fig (1), U has following leg counts, left count is 2 & right count is 2.
Directs:
The members directly sponsored by a particular member is supposed to
known as Directs of that member.
Ex in fig (1), A, B are the directs of U.
C, D are the directs of A.
E, F are the directs of B.
G,H are thr directs of F
Adjusted to:
The member to whom the new member is actually get attached, is called as
Adjusted to for that new member. The Adjusted to & the Sponsor may or may not
be same.
Ex In fig(1), U is sponsor & also adjusted to of A & B.
Spill:

D
G

Fig (2):Spill

Nov. 17

Third direct onwards all directs are known as Spill. In Binary plan, a member
can sponsor 2 IDs immediately, if he wants more ids to sponsor then those ids get
placed in his network, get attached to other members called as Adjusted to.
Spill can only possible in extreme left & extreme right.
Ex fig(2) shows that A, B, C are three directs of U.
Types of Spills:

They are as follows:

Extreme Left or Extreme Right

Top to Bottom and Left to Right

Weaker Side

Manual Spill

Extreme Left or Extreme Right:

In this type, the member is allowed to decide which side he/she wants to join,
whether extreme left or extreme right side of the tree.

Fig (3): Extreme Left or Extreme Right

Ex: fig(3) shows, Sponsor U can spill his/her third direct either to his/her extreme left
side i.e. left side of Direct A or extreme right side i.e. right side of Direct B.

Nov. 17

Top to Bottom Left to Right:

In this type, the member is added into the structure by checking the structure
from top to bottom and from left to right whether any side is empty.

Before Adition

After Adition
Fig (4): Top to Bottom Left to Right

Ex: fig(4) shows that, a new member, suppose F wants to join the company and
he/she wants to be placed on the first vacant side, then through top to bottom and left
to right method, F will be placed below B on right hand side and beside E.
Weaker Side:
In this type, the member is placed on the weaker side i.e. the side which has
less member count, in the structure.

Before Adition

After Adition
Fig (5): Weaker Spill

Ex: fig(5) shows that, right side of U has 3 counts on left side and 2 counts on right
side, then the new member F is placed on the right side of U.

Nov. 17

Manual Spill:
In this type, the member can select manually the place where he/she wants to
be placed.

Before Adition

After Adition
Fig (6): Manual Spill

Ex:- fig(6) shows that, new member F can select any place in the structure wherever
he/she wants to be placed.
Spill Network:
Spill network is known as Spills directs network.
Ex fig(7), F is the spill of U & G is the direct of F. Then Gs network is known as
Spill network of U. H is the second direct of B.

U
F is a Spill of U
A

H is not Spill of B

Fig (7): Spill Network

10

Nov. 17

Upline:
Members present above the member in chain like structure in mother tree, is
known as Upline, who earns money on their downline.
U

Fig (8) Up Line Structure

Ex fig (8):U, B, F, H are the uplines of L.
Direct Upline:
The adjacent to is the sponsor of the member, is called its direct upline.
Ex In fig(8) - H is the direct upline of L, B is the direct upline of E, etc.
Set/ Pair:
Set/ Pair is the confirm count of left & right side. Binary Earning depends
upon no. of sets/ pairs. Set / Pair may be of 1:1, 1:2, 2:1, 1:3, 3:1, etc.
Ex Suppose in a company, first set is of 1:2 or 2:1 & then second set onwards
considered as 1:1. Here U has two sets/ pairs. One is for 2:1 & another one is 1:1.
U

Fig (9): Set/Pair

11

Nov. 17

Member Leg:Down count of a member is known as leg of the member.

(Total Count = Total Left Count + Total Right Count)
Ex In above figure U has left count 2 & right count 3, and then Us leg count is 5.

Payout/ Incentives:Member will get incentive on his downline network according to business
plan. It can be calculated daily/ monthly/ weekly.

Set Amount:The amount fixed per set as per Companys rules & regulations is called Set
Amount. How set will be formed & what will be the set amount, is decided by the
company only.
Reserve Amount:
It is a particular amount, decided by the company which is reserved from
package cost. Reserve amount is collected for distribution among members.
Ex Suppose Package cost is 3500/- & Reserve amount is 2000/- per package.
If there are thirty joining in a period, then Companys Turn Over will be
30* 2000/- = 60,000/ Payout Analysis:
Payout Analysis gives us a detailed idea about the particular payout i.e. it shows
total no. of joining, total collection, total reserved amount, total available amount,
amount to be distributed, brought forward amount, carry forward amount, TDS,
processing/ service charges, advance amount, net amount.
Carry Forward & Brought Forward:
The deficiency of amount/ count will be considered as CF and in the next payout,
it is called as BF.
Capping:
The maximum amount/ pair which can be earned/ considered by a member in a
particular time period are called as capping. Capping will have been decided by the
company.

12

Nov. 17

Ex - suppose it is 20,000/- If a member earns 50,000/- in certain payout. That

member will get only 20,000/- because of capping. Rest amount will be lapsed.
Royalty:
Royalty is one type of earning. There is a certain percentage of T.O. of the
Company will be distributed between all royalty qualifiers. For royalty qualification,
member has to satisfy the criteria, in a certain time period a particular no. of pairs has to
form.
Business Value/Personal Value (Point Value) (BV/PV):The BVs/PVs are predefined for the different products. When member purchase
product, he/she will get benefit in the form of BV/PV.
Ex. On purchase of Rs 1000/- from the company, then BV =40.
If member purchase for Rs 5000/- then he will get 40*5 =200 BVs
Depending on BVs again member can earn income
Repurchase:Purchasing of products from the company other than joining kit is called as
Repurchase. Member will get commission on repurchase.
Types of Entry:
A member can join company in different way by using any Paymode like DD,
Cash and Credit card or by using E-pin. Following are the types of entries:
a. Paid/ Confirm Entry:
The members who have paid the amount before joining are called as Paid/
Confirm ID. The Paid/Confirm IDs are green in color. Members are joined in
various methods like using E-pins, DD and cash payment.
b. Credit entry:
Member joins to the company without paying joining amount, those members
are called Credit Members and type is called as Credit Entry. Until recovery of
joining amount, a member cannot get any income on a credit entry on its
downline. Credit members can get income on paid members only.

13

Nov. 17

c. Free entry:
Those Members who join to the company without paying joining amount is
called as Free Entry. Free entries will get income on paid entries in its downline
network. Paid entries will not get any income on free entries from its downline
network.

d. Partial Paid Entry:

Member joins to the company paying partial amount, those members are
called Partial Members and type is called as Partial Paid Entry. Until recovery
of joining amount, a member cannot get any income on a credit entry on its
downline. Partial members can get income on paid members only.
Earning:
The sources of income according to the business plan are known as Earning. It
is also called as income / Incentive.
Ex. Binary, Spill, Royalty.
Cumulative Earning:
Cumulative Earning of member means sum of all earnings that a member get by
different types of incentive in different payout.
Ex U gets following income
Payout

Binary Amount

Spill Amount

Total Amount

4000

1000

5000

3500

500

4000

2000

2000

In the above example, U gets 11,000/- as total or cumulative earnings in three payouts.
Deduction:
All the charges on income get deducted from income as per companies
policy.
The ID will get cheque of an amount as Total earnings Total Deduction.
Ex. If U gets 1000/- as binary income in a payout. If 10% is service charge. Then
he/she will get 90% of 1000/-.

14

Nov. 17

Types of Deduction:
a. TDS
Tax Deduction at Source (TDS) is the amount deducted from members total
amount earned during the payout.
b. Process/Admin/Service Charge
According to the company policy some percentage amount will be deducted.
It includes service or process charges. It can be 5% on total amount earned.

c. Other
Other deduction includes charity charges, product dispatch charges will be
deducted from total amount earned.
Turn Over:Turn over is the total collection of a company for a particular period. It
depends up on nos. of joining and reserve amount per joining. This is used as
distribution amount in a payout.
Turn Over = No. of joining * reserve amount.
E.g. If reserve amount is 2000 and no. of joining is 30 then turn over of company is
T.O. = 30 * 2000 = 60,000/ MCA: MCA is the abbreviation of Minimum Cheque Amount. It is decided by the company.
If net amount is greater than MCA, then only cheque will be processed.
Paid Member: The member, whose net payable amount is greater than MCA, is called as Paid
member.
Unpaid Member: The member, whose net payable amount is less than MCA, is called as Unpaid
member.

15

Nov. 17

Simulation:
Company reserves a specific amount from package cost for distribution. After a
period situation comes where distribution amount is greater than reserve amount.
In such case Company applies a policy in following way:
All members who earn a specific amount, get qualify for simulation. Simulation
occurs as percentage wise.
Ex.
Suppose 10,000/- is the specified simulation amount, then all the members who earn
cumulative 10,000/- from binary plan are eligible for simulation.
Rest of the members get full amount. Eligible members get that percentage of net
amount.
Payout
1
2
3

Reserv Amt.

Amt. to be Member
Dist.
26000
25000
A,B,C,D,E
29000+1000 30000
A,B,C
A,B,C,D,E,F
50000
60000

Amt. Dist. Each.

Remaining
Reserve Amt.
5000
1000
10000
0
10000 for D,E,F 20000
and 6666 A,B,C

So table shows A,B,C members are Eligible for Simualtion so the get income as per the
Simulation persentage
Simulation percentage= (Remaining Reserve Amt/Required Distributed Amt )* 100.
In this case, simulation percentage=(2000/60000)*100=33.33%
So, all qualified members A,B,C will get the 50% of the actual payout amount means
they get 6666/- each amount.
Award:
Company will give some awards and rewards to his members to motivate them
by completing some targets decided by company. If a member satisfies some criteria,
then those members will be qualified for awards. Member can get award in two ways:
one is Fresh and other is Cumulative.
Ex-

16

No. of days

No. of pair

Award

10

A1

10

20

A2

15

25

A3

Nov. 17

Chapter 3

MLM PLANS
1) Binary Plan:
In Binary plan, each member can sponsor two direct members immediately under
him. But if he wants more ids to sponsor, then those ids are placed in his network as Spills,
which get attached to other members called as Adjusted to.
Spill can only possible in extreme left & extreme right.
Ex Any member can sponsor only two members.

Fig.(9) Binary Plan

NOTE:But any member after sponsoring two members wants to sponsor third member, he / she
can also sponsor third member by Spill method. Third Directs onwards all directs are called
as Spills
----------------------------------------------Example of Binary Plan------------------------------------------Considerations:-

17

Ratio required to form a first pair is 1:2 or 2:1 in left or right side respectively.

After that ratio required 1:1.

1st Pair amount is Rs.300

2nd onwards gets Rs.200

TDS amt = 10%

Service Charges = 4%

Minimum Cheque amt = Rs.300

Nov. 17

Members Joining Date: 01-11-2009

For 1st Payout:-

U
A

1st Payout

Calculations on daily basis: (1-11-2009 to 7-11-2009)

For 1st Payout
Member
U
A
B
C
D
E
F

Left
5
3
3
1
0
1
1

Right
7
1
3
1
0
1
1

Leg Count
5:7
3:1
3:3
1:1
0
1:1
1:1

Paid
1(1:2)+4(1:1)
1(2:1)
1(1:2)+1(1:1)
0
0
0
0

Sets
5
1
2
0
0
0
0

CF
0:1
1:0
1:0
1:1
0:0
1:1
1:1

Commission
1*300+4*200=1100
1*300=300
1*300+1*200=500
0
0
0
0

For C, E & F as they do not satisfy the required criteria, they are not qualified for the
commission calculation.
Therefore, C, E and F each have carry forward as 1:1, as per the structure.

Calculation for Net Amount in 1st Payout:Member

U
A
B

Total
Pair
5
1
2

Binary Pair
Amt
1100
300
500

TDS
110
30
50

Service
Charges
44
12
20

CF
0
258
0

Total
Payable
0
258
0

Net
Amt
946
0
430

Since, the Minimum Cheque Amount = 300, member A cannot get the payment even
though he is qualified. The Total Payable of A is carry forwarded into the next Payout
calculation.

18

Nov. 17

Member Joining date 8-11-2009

For 2nd Payout:U
B

A
C

2nd Payout
M

Member

Left

Right

U
A
B
C
D
E
F
G
H
I
J
K
L

2
1
1
0
1
1
1
0
1
1
0
1
0

2
1
1
1
0
0
0
0
0
0
0
0
0

Leg
Count
2:2
1:1
1:1
1:1
1:0
1:0
1:0
0:0
1:0
1:0
0:0
1:0
0

BF
0:1
1:0
1:0
1:1
0:0
1:1
1:1
0:0
0:0
0:0
0:0
0:0
0:0

New
Count
2:3
2:1
2:1
1:2
1:0
2:1
2:1
0:0
1:0
1:0
0:0
1:0
0:0

Paid

Sets

CF

Commission

2(1:1)
1(1:1)
1(1:1)
1(1:2)
0
1(2:1)
1(2:1)
0
0
0
0
0
0

2
1
1
1
0
1
1
0
0
0
0
0
0

0:1
1:0
1:0
0:0
1:0
0:0
0:0
0:0
1:0
1:0
0:0
1:0
0:0

400
200
200
300
0
300
300
0
0
0
0
0
0

Here, Ratio is taken as 1:2 and 2:1 because its the 1st set of C,E,F.
Calculation for Net Amount in 2nd Payout:Member
U
A
B
C
E
F

Total
Pair
2
1
1
1
1
1

Binary Pair
Amt
400
200
200
300
300
300

TDS
40
20
20
30
30
30

Service
Charges
16
8
8
12
12
12

CF

BF

0
0
172 258
172
0
258
0
258
0
258
0

Total
Payable
0
0
258
258
258
258

Net
Amt
344
430
0
0
0
0

Since, the Minimum Cheque Amount = 300, members B, C, E and F cannot get the
payment even though they are qualified. Their Total Payable is carry forwarded into the next
Payout calculation.

19

Nov. 17

2) Daily Binary Plan:

In Daily Binary Plan, payout calculation is done daily. It has auto generated
scheduler. Here, commission is calculated daily, but all the deduction will be done at
time of cheque processing. Company can provide the different condition. But, on
each day, no. of pairs is constant. Each member should make those no of pairs to
get the commission. If any member fails to make those no of pairs, then those no. of
joining count will be flushed out daily. Though member makes more than 1 set, then
also member will get only commission on fixed no. of pairs.

-: Example On Daily Binary Paln:-

Day 1

Day 2
F

Day 3

Day 4

Considerations: Pair Required - 1:1.

Pair amount - Rs. 1, 000/ Pair Capping -1 pair per day.
Payout calculation 1 time per day.
System should not carry forward any count or pairs.
Payout calculation will be done at 12.00 noon.

Daily Income:Member

Day1 Income

Day2 Income

Day3 Income

Day4 Income

Total Income

U
A
B

0
0
0

1000
0
0

1000
1000
1000

1000
0
0

30000
1000
1000

C,D,E,F,G,H have not satisfied the condition of pair, So they will not get any commission
amount. So, all count will be flushed out.

20

Nov. 17

3) Hyper Binary Plan:Its the earlier version of Daily binary plan. Its the one in which the Set amount is
not fixed. The payout calculation was carried out by the Admin department. It consists of
following things:o

Fixed Binary

Variable Binary

Diamond Income

Lapse Pair Income

Fixed Binary:
In this, a member will get certain fix amount for particular period / pair and
then the amount will vary.
E.g.:- Suppose the member will get the fix amount for the 1st two set only
then the amount would vary for next period / pair.
Variable Binary:
If a member has more pairs even after the condition for fixed pair is satisfied,
then that pairs will be consider for variable Income. It is also having certain pair limit.
E.g.:- Suppose Reserve amt on per joining = 100
Capping limit of pairs = 4 i.e. only 4 Variable pairs are considered and
rest are flushed out.
Diamond:
If a member still has certain pairs left after the variable income then as per
the plan of the Organization if he satisfies the pair condition he is qualified for pair
income.
Formula:Diamond Rate = Total no. of joining * Diamond Reserve Amt
No. of Diamond Set
Lapse Pair Income:
After calculating Diamond rate, still if some of the pairs are left out, then they
are called as Lapsed Pairs. But certain organizations also pay some income on the
lapsed pairs. It may vary from company to company.

21

Nov. 17

Formulase Used in Hyper Binary Plan:

1) Variable set amt = T.O (Turnover) Fix binary amt for total pair
----------------------------------------------------------No. of Variable pair created.
2) Variable Income = No. of Sets * Variable Rate

3) Net Income of a member = Fixed Income + Variable Income

-:Example On Hyper Binary Plan:Suppose there is a Hyper Binary plan having a tree structure as shown below and
along with following conditions:1. Ratio required to form pair is 1:1 in left or right side respectively
2. Rs.300 per joining will be kept reserved for Distribution for hyper binary.
3. First 2 pair consider to Fixed Binary Pairs.
4. Pair amt is Rs.200/5. For Fixed Binary income, capping per day is 2 pairs.
6. First 2 pair onwards all the pairs will be considering for Variable Binary Income.
7. For this income, capping per day is 4 pairs.
8. The amt available for hyper binary income will be equally distributed in eligible Pairs.
9. TDS amt 10%.
10. Processing Charges 4%.
11. Minimum Cheque amt 300.

22

Nov. 17

U
A

1st Payout

Calculation for the 1st payout (1-11-2009 to 8-11-2009):Member

Left

Right

Total Leg

Fix Pairs

Variable Pairs

CF

U
A
B
C
D
E
F

6
3
2
1
0
1
1

6
2
3
1
1
0
1

6:6
3:2
2:3
1:1
0:1
1:0
1:1

2
2
2
1
0
0
1

4
0
0
0
0
0
0

0:0
1:0
0:1
0:0
0:1
1:0
0:0

In 1st Payout:
Tot. no. of joining = 13.
Total No. of Fixed Sets=8.
Total No. of Variable Sets = 4.
For Fixed binary amt calculation

= No. of pair * Pair amt.

=8*200
=1600

For Variable binary set amt calculation

= T.O (Turnover) Fix binary amt for total pair
----------------------------------------------------------No. of Variable pair created.
=[(8*300)-1600]/4
=200
Toatal Payout Calculation:
Member

Fix.
Pairs

Vairable
Pairs

Fix
Income

Variable
Income

Toatal
Amount

TDS

Processing
Charge

Total
Payable

CF

Net
Payable

U
A
B
C
D
E
F

2
2
2
1
0
0
1

4
0
0
0
0
0
0

400
400
400
200
0
0
200

800
0
0
0
0
0
0

1200
400
400
200
0
0
200

120
40
40
20
0
0
20

48
16
16
8
0
0
8

1032
344
344
172
0
0
172

0
0
0
172
0
0
172

1032
344
344
0
0
0
0

23

Nov. 17

-:Example for Diamond and Lapse Calculation:Conditions : Consider Fixed Binary capping =1:1, commission = 200
For variable capping =1:1, Reserved amt = 100
For Diamond capping =1:1 = One Diamond., Reserve amount = 50

U
A

Calculation of Commission:Member

Left

Right

Total Leg

Fix Pairs

U
A
B

3
2
2

3
2
2

3:3
2:2
2:2

1
1
1

Variable
Pairs
1
1
1

Diamond
Pair
1
0
0

CF
0:0
0:0
0:0

Variable Pair Amount = (Reserved amount * total no of new joined)

Total no of variable set
Diamond income

= (Res. Amt. * total no. of joining)

No. of Diamond Sets

Lapse pair income

= (Reserved amount * No. of new joined)

Total no. of Lapse Pairs

Member

Fix.
Pairs

Vairable
Pairs

Diamond
Pair

Lapse
Pair

Fix
Income

Variable
Income

Diamond
Income

Laps
Income

Toatal
Amount

U
A
B

1
1
1

1
1
1

1
0
0

0:0
0:0
0:0

200
200
200

600
600
600

300
0
0

0
0
0

1100
800
800

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Nov. 17

4) Level Binary
Commission is calculated per Joining and per level.
If a spill is created in binary tree, then for level commission calculation, it is
converted to actual tree and then commission is calculated per Joining.
Ex- Here, commission is calculated by arranging all the members according to
their sponsors, which is represented by Actual Tree. Then, the commission will
be calculated per Joining and per level.

U
B

A
D

D
H

Binary Tree

Actual Tree

Single Level:
Single Level commission given Joining , though it has only one leg on one side.
When he will create another leg, then he will get only binary commission.
Ex- in following figure, U and C will get only leg commission and all others i.e. A, B and
D will get only binary commission.
U

25

G
I

Nov. 17

5) Matrix Binary and Auto-matrix:

A matrix plan is the one in which the tree grows in n X n structure only. A Binary plan is
an example of 2X2 matrix. The structure of Binary Matrix plan is of 1-2-4-8 and so on.
Other example of Matrix plan is of 3X3 matrix. The structure of this plan is of 1-3-9-27
and so on. These two types of matrix are most commonly used. The user can also use
4X4 matrix but it would create a lot of complication and time consuming.
In Simple Matrix Plan, the members are placed randomly based on the Sponsor id and
its downline. The user is not allowed to select the position. He can only select the
sponsor. In this plan, the member will get commission on level basis. In this, the payout
period is there and after certain no. of levels is completed, the members earning is
stopped.
If matrix binary is of 2X2, then it is called as Level Binary or regular binary.
Consider 3X3 matrix plan:
U

Here commission is calculated level wise and per Joining wise.

Now in this example U will receive 100 Rs. for each member if that member joins next level
of U and will receive 80 for next level in this way commission is received.

26

Level
1

Income
100

80

3
4
5

50
30
20

Nov. 17

Payout for U:The Payout for U

=(1st level commission * No. of joining) + (2nd level commission * No. of joining)
+ (3rd level commission * No. of joining)+(4th Level Commission* No. of Joining)
=(100*3)+(80*9)+(50*5)+(30*3)
=1360
Payout for A:The payout for A
= (1st level commission * no. of joining) + (2nd level commission * no. of joining)
+(3rd level commission * No. of joining)
= (100 * 3) + (80 * 3) + (50*3)
= 690
In this way the remaining membres get commission.

Auto-matrix:
The only difference in the matrix and auto matrix is that, in auto matrix, member is
even not allowed to select the sponsor. In this, the members are placed sequentially by
searching the next vacant place in the structure from top to bottom, left to right.

In this plan there is uniform growth of the tree.

U

27

Nov. 17

Auto-matrix is modified matrix in which position filling is sequential and so no need of

sponsor ID to join.
Auto-matrix Re-Entry possible, one sponsor again joining in a tree. So he get commission for
that also.
Total commission = No. of joining * amount per ID.

The commission for a member can last until a specific level is reached. Rest all the
calculations will be same.
Note: This plan is never alone it is always clubbed with some other plan either Binary or
Generation.

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Nov. 17

6) Growth Plan:
In this type of plan, the Growth of the Company determines the Growth/ Commission
of the Member i.e. number of joining members in a company per cycle.
Growth of the company is a determined by the percentage of target achieved
by the company. When ever a company or organization goes for this plan it decides the
target that is to be achieved in each cycle. If the organization fails to achieve the target
then the percentage of achievement of the target is calculated and the same percentage
of amount is distributed to each member.

Note: Depending upon the joining of the new members in the next cycle, the members
joined in the current cycle would get the commission based on the rate of growth.
It is based on the growth of the company, i.e. number of joining members in a
company per cycle.
It can be binary or generation plan.
Cycle (payout) will be calculated for any period.
Target of no. of joining will be defined per cycle.
Cycle calculation will be daily/weekly/fortnightly/monthly.

In this plan, there are 12 cycles.

There are 2 types of incomes:

a) Direct growth/Own growth income.
b) Referral Growth income.

a) Direct Growth Income:

When member will get join in a company, it will get direct growth income for 12
cycles.

b) Referral Growth Income:

Member will get income for 12 cycles on members referred by it.
If member refers 2 direct members, then it will get 12 cycles income on first direct
and 12 cycles income on second direct.

All income will be according to company growth of that cycle.

In this plan, if growth of company is 100%, then all members of that company will get 100%
commission.

29

Nov. 17

If member joins in the company in the 1st cycle of company; then it will get the direct growth
income from the companys 2nd cycle, and it will get this income its own 12 cycles.

Exapmle on Growth Paln:P1

P2

P3

Jan

Feb

P3

Mar

Apr
b

r
May

P2

Consider a Company has following growth plan:

Month

Cycle

Jan
Feb
March
April
May
June
July
August

1
2
3
4
5
6
7
8

Company
Growth in %
100
75
80
90
60
63
45
100

Direct Growth
P1
50
100
200
400
800
1600
3200
6400

P2
100
200
400
800
1600
3200
6400
12800

P3
150
300
600
1200
2400
4800
9600
19200

Referral Growth
P1
P2
P3
75
100
150
150
200
300
300
400
600
600
800
1200
1200
1600
2400
2400
3200
4800
4800
6400
9600
9600 12800 19200

In this example, U will make four referrals joining to the company; fist direct will join in
companys 1st Cycle in Jan, second direct will join in companys 2nd cycle in Jan, third direct
will join in companys 3rd cycle in March and Forth direct join in companys 5th cycle in May .
Calculations:
For Us Comision on companies Growth:

30

Nov. 17

New
Membre
Join
A
B

Month

Jan

Feb

March

April

May

Income
Member

Package

Direct Growth

Referal Growth

U
A
B
U
A
B
U
A
B
C
U
A
B
C
U
A
B
C
D

P1
P2
P3
P1
P2
P3
P1
P2
P3
P3
P1
P2
P3
P3
P1
P2
P3
P3
P2

50(100%)=50
100(75%)=75
200(80%)=160
400(90%)=360
800(60%)=480
-

100(100%)=100
150(100%)=150
200(75%)=150
300(100%)=225
400(80%)=320
600(80%)=480
150(80%)=120
800(90%)=720
1200(90%)=1080
300(90%)=270
1600(60%)=960
2400(60%)=1440
600(60%)=360
100(60)=60

Total
Income
= DG+RG
=50+250
=300
=75+375
=450
=160+920
=1080

=360+2070
=2430

=2820+480
=3300

Next months June to December U will get the income .

Cases:
A) If for any cycle there are more joining against target then the difference will carry forward
for next cycle.
B) If for any cycle there are less joining against target, then a member will get income as,
No. of joining in that cycle / target for that cycle * 100
Ex:
Cycle

Target

Joning

CF

BF

Total Joining

Growth of Cycle in %

100

110

200

150

10

100

100

10

160

80

So, all members will get same Growth income % in that cycle.

C) Re-entry condition:
In Growth plan, according to company policy, a member can make re-entry at
some cycle no. member has to pay the re-entry amount, where he will get
commission on new id as well as on old id. Re-entry amount will be deducted from its
Direct Growth amount or Referral Growth amount or both.
For new id, cycle will start from 1st cycle, but for old id, the cycle continues till
12th cycle.

31

Nov. 17

7) Generation Plan:
In Generation plan, Member can sponsor n no. of directs.
The growth in it is left-to-right & top-to-bottom.
Only sponsor-id is to be mentioned for the member while joining.
Commission is calculated on the basis of no. of BV or PV according to the companys
plan.
Ex In following figure, U,A, B, C, D are directs of U and E and F are directs of A.

P1

P1

B
P1

P1

P1

P1

F
P1

G
P1

Package

BV

P1

100

P2

200

P3

500

Slab (BV)

Commission %

1-500

501-1000

10

1001-2000

15

2001-5000

20

1st Payout Calculation:

Group BV is calculated on its downline.
Total BV (Group BV) = Own BV + Own Downline BV.

32

Nov. 17

Member

Own BV

Downline BV

Total BV

Commission %

100

700

800

10

100

300

400

100

100

100

100

100

100

Commission of U=
=[100*10/100]+[400*(10-5)/100]+[100*(10-5)/100]+[100*(10-5)/100]+[100*(10-5)/100]
=10+20+5+5+5
=45
Comission of A=
=[100*5/100]+[200*(5-5)/100]+[100*(5-5)/100]
=5
2nd Payout:

In following figure, Purple color indicates the new joining and new package in red Color and
Blue color indicates old joining.

P1+P2+P3+P3

P1+P2+P3+P3

B
P1+P3

P1+P2

P1+ P2

P1

F
P1+P3

H
P1

33

P2

I
P2

Nov. 17

2nd Payout Calculation:

Member
U
A
B
C
D
E
F
G
H
I

For this 2nd

Payout
Own BV
1200
1200
500
200
0
200
500
0
200
200

Total
Own BV

Downline
BV

Total
BV

Commission %

1300
1300
600
300
100
300
600
100
200
200

3700
1000
400
0
0
200
0
0
0
0

5000
2300
1000
300
100
500
600
100
200
200

20
20
10
5
5
5
10
5
5
5

When you calculate the comission percentages that time you give all Own BVs for
calculation

When you calculate Comission on new pay out you will get new own BV for the
calculatons.

Commission of U=
=[1200*20/100]+[1900*(20-20)/100]+[900*(20-10)/100]+[200*(20-5)/100]
=240+0+90+30
=360

Comission of A=
=[1200*5/100]+[200*(20-5)/100]+[500*(20-10)/100]
=240+30+50
=320
Comission of B=
=[500*1/100]+[200*(10-5)/100]+[200*(10-5)/100]
=50+10+10
=70

34

Nov. 17

8) BOARD PLAN:
Board Plan is one of the plan in MLM. It is a box type structure, but there is a
limitation in levels, after that board will split & two new boards created.
In board, members are placed in FIFO (First Input and First Output) basis.
Board:
Board means its a box type entry. It may be of 1-2-4, 1-2-4-8, 1-2-4-8-16.

Ex - Figure shows 1-2-4 Board.

For the Board Plan we have following things:

No. Of Boards:

There are three types of Boards:

1. Feeder Board:
This is the first board. When member joins the company he will get entry in
Feeder Board.

2. Main Board:
After Feeder Board next board is Main Board. When member of Feeder
Board satisfies certain condition then he will get entry in Main Board.

3. Reentry Board:
Most of companys only have Feeder and Main Board. Some of companys
also have one more board which is Reentry Board.
When Member of the Main Board satisfies certain condition then member will get entry
in Reentry board.

35

Nov. 17

If Reentry Board is not available then member will get entry in another Main
Board where Sponsor of the member resides or in the same Main Board positioning
from left to right.
No. of Levels:

All the board plans have certain structure which can be 1-2-4, 1-2-4-8, 1-2-4-8-16.
For 1-2-4 structure there are total 3 levels.On first level it has only one member.
On second level it has two members and for third level it has four members.
Board Position:
Board Plan follows Top to Bottom and Left to Right Approach for deciding position of
members.
For Feeder Board following conditions can be applied:
1. New member follows Adjusted to member.
2. New member follows his downline network.
3. New member follows his upline network.

For Main Board following conditions can be applied:

1. New member follows his Sponsor.
2. New member follows his upline network.
Shuffling:
As per the plan members position get shuffled before splitting.
For shuffling, condition may be that member who has 2 directs will get position before other
members in the board.

Splitting:
Board will split at that very moment when all the boxes get filled. At no point of time a
board will remain without splitting, if all the positions are filled.
Commission:
In Board Plan member will get commission when he moves from Feeder Board to
Main Board and from Main Board to Reentry Board according to company plan.
In some cases board member will get commission for new entries in the board

36

Nov. 17

-:Example on Board Plan:-

Binary Reperesentation

Members will get entries in the Feeder Board as follows:

Shufling:A

Feader Board1(Befor Shufling)

Feader Board1 (After Shufling)

Here according to Top to Bottom and Left to Right approach and in FIFO manner
members are placed.
In this case, A satisfies the all criteria. So after shuffling the structure becomes as above.

37

Nov. 17

Spliting:-

Feader Board 2

Feader Board 3

This is 1-2-4 Board Plan, here when 7th member E enters in the board so board split into 2
new boards and the top most member A get entry in the Main board.
So, after splitting A will transfer to the Main board as qualifier.

Main Board

38