A Generation Plan is a systematic organizational structure that is established by Multilevel Marketing (MLM) companies and is the most popular marketing compensation plan. It helps to manage Generation networks such as to keep track on down line’s incomes and expenditure. It reduces the manual works done by the MLM companies. It is quite popular among companies, part-time professionals, network marketers, and all the other members who wish to set up an MLM business. Consequently, the members are supposed to add only two forefront members.Structure grows faster in this plan which is beneficial for a business to earn and grow quickly.
In Generation Compensation Plan one member can recruit two people to the first level. This means that the sponsor can make only two distributors underneath, i.e. Left Leg and Right Leg. It is also referred as Power Leg and Profit Leg. If member sponsors more than two new members, excess members are placed at down line below the sponsoring member's forefront. This 'spill over' is an attractive feature that appeals new members, since they only need to sponsor two members to participate in the Generation compensation plan. That is why it is often termed as Generation Spill over MLM Plan. Earnings in Generation plan is always calculated on matching volume of sales done from both legs. And unmatched business volume gets carry forward for next payout. Matching volume may vary such as 1:1, 1:2, or 2:1. MLM Generation Plan software can also be combined with Level or Forced Matrix that results in hybrid software MLM plan.
Let’s Understand Generation MLM Plan with an example that is based on 1:1 ratio concept. Suppose a company has decided the package amount of Rs. 500 and Generation matching percentage is 5% of the package amount (5% of Rs.500). Sponsor A, can have only two direct members; B on its left & C on its right. B will have two members as D on the left side and E on the right side. C will have members as F on the left side and G on the right side.
For income calculation, we divide this tree in two parts as Left and Right.