There are two most popular compensation models used by the direct selling companies: unilevel and matrix compensation plan. The unilevel compensation model in direct selling allows unlimited direct recruits all placed on one level below their sposnsor, while the sponsor can earn commissions down through multiple levels. The initial investment in unilevel plan is low because of its simple structure. They have low maintanance costs and they are suitable for smaller teams.
In contrast, in a matrix compensation plan they imposes a fixed width and depth for example 3×3 or 5×7 structure limiting how many recruits the sponsor can place on their frontline and how deep they can earn commissions. If there are more recruits in the level, they are spill over into the downline members which automatically encourages team building.
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