Compensation plans, explained plainly.
Every direct-sales and network-marketing company pays through some version of these structures. Knowing how a plan actually works — before you join one or recruit into one — is the difference between an informed decision and a guess. This is a neutral, jargon-free guide to the five common plan types: how each one pays, where each tends to help or hurt, and the honest questions to ask first.
Questions to ask before you join any plan
These apply to every structure above. Tick the ones you've gotten a clear, written answer to — if a company can't answer them plainly, that's a signal in itself. Saved on this device.
⚑ Structure-level red flags (any plan)
- Income comes mainly from recruiting fees or required “packs,” not from real product sold to real customers — that's the hallmark of an illegal pyramid, regardless of the plan name.
- You must keep buying inventory to stay “active” or to qualify for commissions (inventory loading), with no genuine demand for the product.
- Earnings are shown as typical or guaranteed without a published income-disclosure statement showing what most participants actually make.
- The plan is so complex no one can clearly explain how you get paid — complexity often hides where the money really goes.
Results are not typical; most participants earn modest or no income. This page is general education about how compensation-plan structures work — it is not financial, legal, or business advice, and it is not an income promise or an endorsement of any company or plan. Plan names and rules vary widely between companies; the descriptions here are simplified and neutral. Always read a company's actual policies, official compensation plan, and published income-disclosure statement, and consider independent professional advice before joining. No earnings are implied or guaranteed.
Once you understand the plan, TierUp helps you do the actual work — track contacts, follow-ups, and your daily activity in one place.
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