Understanding Global and Local Compensation Plans for Businesses

Competing in International Markets — A direct sales company looking to expand its business into international markets will need to modify its compensation plan. The two ways you can structure these plans is the Global MLM compensation model or the Local MLM compensation plan, and have their respective features. This is where the global MLM compensation plan comes into play which provides a common payout structure over all countries. It can be hard to implement this model due to different international regulations but it has a big advantage — scalability. When businesses expand, they can adjust the current distribution formula slightly to easily enter new geographies. In contrast, a local MLM compensation plan is adaptable to the wants in any given territory. They account for local regulations, cultural norms, and economic conditions. These kinds of plans often have more tailored, less convoluted payouts and are easier to fit in the constraints of local legal regulations.