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Compression is one of the greatest development in the world of level commissions in MLM business. Compression is a technique that keeps nonqualified, inactive distributors from achieving a payout level in a level commission plan or MLM plan.
Dynamic compression is a fascinating development on compression. Comparing with the standard compression method where the commission amount is not fully paid. Dynamic compression is applicable to those distributors who are in a premium position and has a number level of distributors, most probably it’s four to five level. Simply stating dynamic compression pays out all levels of a level commission. Unlike standard compression, dynamic compression compresses not only the inactive or non-qualified, it compresses people who don’t qualify for a specific level of commission. In dynamic compression, it compresses out the unqualified distributors on that specific level and pays the desired level commission to their up line.
The main advantage of dynamic compression is that a leader can get paid by the company even from their deeper downline. The main disadvantage of dynamic compression is that when qualifying to a level is difficult, then distributors may be paid down few levels because few people in their downline are qualified. Another disadvantage is that when someone on such distributors first level qualifies all of the income then moves to the first of the distributor, thereby causing a sudden and drastic fall down in the earning of that person.
Instead of implementing dynamic compression, A company can try other methods to use the breakage to encourage the desired behavior. Dynamic compression is not the effective way to get a full payout, and a full payout is not required for the correct approach. A company should consider options like selecting a best MLM Software, effective MLM plans etc.