A differential plan is a direct selling compensation plan that runs on the difference of the commission between the sponsor and the members. In this plan, a distributor receives the difference between the amounts for which he himself qualifies and the amount for which his first level distributor qualifies.
A differential plan is based on the difference in commission between the sponsor and the members and is a type of direct selling compensation plan. Under this arrangement, a distributor gets paid the difference between the amounts that he is eligible for and the amounts that his first level distributor is eligible for.
By providing customized rewards based on both individual and team accomplishments, the Differential
MLM plan puts a contemporary spin on conventional MLM compensation schemes. Its goal is to inspire
distributors. It is appropriate for businesses trying to stand out in the crowded MLM market due to
its adaptability and emphasis on performance indicators.
Ex. The first upline distributor is at rank 1. She qualifies for piece 1 and the whole pie is still
there so she gets 1 piece. The second upline distributor is at rank 3. He qualifies for pieces 1, 2,
& 3, but piece 1 has already been taken so he gets 2 pieces.
The generation-based multilevel marketing strategy, however, is more akin to this differential plan. This concept is more beneficial for businesses and industries that rely on products more than anything else. As an example, consider a business that handles the product's repurchase feature. The current network member may handle the repurchase procedure. The preferred option in the network business for future development will be franchisee.
Advantages of Differential Plan
• No Spill Network :- As there is no concept of a spill in the differential plan, so all the directs are added directly to the network of the sponsor.
• Easy Earning :- The sponsor will get paid from the business for any of his directs. Also, he get paid for unlimited depth in the network according to his rank.
• Low Risk :- Differential Plan is a long-term plan because commission distribution percentage is fixed so the risk factor is very much less.
