What is MLM Spillover and Should You Rely On It?

More and more people have heard of MLM, or multilevel marketing, an ingenious internet marketing scheme that allows people to make a lot of money very quickly if exploited correctly. As the business plan becomes more and more popular, the concepts associated with it are becoming better and better known. One such concept is spillover, which applies to certain MLM structures. Spillover, basically, is a way for MLM companies to force yo uto place distributors in your downline as you recruit more and more of them. Let’s see how this works.

 

What is MLM Spillover and Should You Rely On ItMoney, Money, Money

 

But first, a little background. In multilevel marketing, most of your money comes from sales made by distributors you’ve recruited. These people constitute your downline. Each person in your downline can develop their own network of distributors, which is where the real fun starts: This is when you start to make a lot of money for yourself, and when you start to see that income grow regularly. The most important part of multilevel marketing is exploiting this downstream effect. MLM spillover allows you to build that downstream quickly and with a lot of advantages and disadvantages.

 

MLM-BinaryWhat exactly is MLM Spillover?

 

What is spillover? Just what it sounds like: The spilling over of distributors you recruit from one level of your downline (say, first level) to the next (in this case, second level) as a result of size constraints on your levels. Say you can only have two distributors in your first level. If you fill this level with two distributors, you’ll have to place that new recruit underneath one of the two slots from your first level

 

Should you rely on MLM Spillover?

 

As you can see, you can benefit from team work.  This isn’t exactly the best way to build a MLM business. Say if you are in a binary comp plan and your sponsor works on one side of the leg, while you work the other leg.  It gives a people of perception that if a sponsor or upline puts people under their downline, they will make instant money.  It’s a great leverage point for sponsors to recruit more people but they are not recruiting leaders or business builders.  I’ve never seen or heard of anyone who has made a killing from spillover.

 

Waiting in LineYour downline will to develop into a larger organization, which, of course, but not everyone benefits from the spillover.  I’ve seen uplines put new people on their weaker leg, and it doesn't create any leverage for those who are on the weaker leg.  As you can see, this become lopsided.

 

This notion of teamwork is important in MLM, since it’s crucial that everyone work towards a common goal with the ultimate objective being the benefit of the entire team. The problem with spillover, not everyone benefits from it.  Instead of trying to rely on spillover, improve on your skill set so that you don’t have to rely on spillover.  What you lack in skills, you make up in numbers.  The primary objective in the MLM model is to recruit.  If you don’t recruit, your business will die.

 

Spillover, ultimately, is not the best way to build a large MLM Network Marketing organization, but you may build an enormous downline in a short amount of time, provided that you have a strong upline.  But it doesn't mean that you'll make money.  On the back-end, it doesn’t last long-term.  It doesn't create leverage for everyone that is involved.

 

Now, it’s your turn!

 

What are your thoughts on MLM Spillover?  Are you an advocate of spillover?  Have you had any good or bad experiences with spillover?  Be sure to leave your feedback in the comments section and I look forward to reading them!

 

To your Success,


Nate Leung


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Nate Leung

Nate Leung

CEO & Founder @ NateLeung.com at NateLeung.com
Nate Leung is the CEO and Founder of NateLeung.com, and author of "Virtual Entrepreneur: Live Free With the Business of Your Dreams". Nate specializes in helping people take their passion, knowledge, and expertise and bring it to life. You can find out more from Nate by connecting with him over at Google +. If you're struggling and or looking for help, contact Nate here.
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19 Responses to “What is MLM Spillover and Should You Rely On It?”

  1. Asif

    The spillover effect can be marginal but one with not complete knowledge will always assume that these spillovers will make their down-line earnings to increase. Infact you have to work on your own leg or level to get it going. Flukes are rare in MLMs.

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  2. Darren Spruyt

    The spillover effect is not so evident in compensation plans such as the Binary ones. However, those that may help the “lazy networkers” would probably be the matrix compensation plans, which lesser companies are using in their payouts.

    I am guessing that is also the reason why lesser companies use it nowadays since it does not incentivize the distributors to work and promote their products.

    However, many companies also have many forms of payments to their distributors such as the leadership bonuses etc. So the real money also comes in when a team mate of yours or someone that you signed into the business becomes more and more successful.

    As a result, you are rewarded because of their success. As you have mentioned, it is always good to upgrade one’s skills so that they can become more successful in the business.

    Even if one does benefit from the spillover effect. It is very limited, no matter what type of compensation plan it may be.

    Regards,
    Darren Spruyt

    [Reply]

    Nate Leung Reply:

    Hi Darren,

    Yes, this is very evident in binary plans. Spillover “could” benefit you, but typically it doesn’t. I don’t knock spillover as a bad thing, but I do feel that gives a bad perception for the “lazy networker”. If you are a builder, and you have spillover, the combination of the two could be an ideal situation. Appreciate the comments bro!

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  3. Andrew Spence

    This is a great article Nate. Many do not really understand this area and you laid it out very clearly. Excellent stuff. I will tweet this. Regards, Andrew

    [Reply]

    Nate Leung Reply:

    Hey Andrew,

    Great to see you here. I agree, they don’t understand it. Thanks and have a great week ahead. 🙂

    [Reply]

  4. Sherman Smith

    Hey Nate,

    One thing i’m not going to front about is that with all the comp plans out there, they confuse the hell out of me. I just want to know the basics without the bonus’ and super bonus’ for now, then I’ll work my way up LOL…

    But anyways, I think with any comp plan one should focus on becoming a better recruiter. I’ve had better luck with other comp plans, but what it really comes down to is what are you doing to get results? You mentioned this and I totally agree with you!

    [Reply]

    Nate Leung Reply:

    Hey Sherman,

    They sure can be confusing! So many people get so wound up on the comp plan and they forget they need to recruit. Thanks for the feedback!

    [Reply]

  5. pam schmidt

    You gave me the lesson of the day regarding spillover. Great info, Nate!

    [Reply]

    Nate Leung Reply:

    You’re welcome Pam!

    [Reply]

  6. Stefani McCune

    Love your explanation. I’ve had people promise me spillover…never got it. Then once my upline gave me a whole line of people. That was really awesome. But it’s not something to rely on. This is YOUR business. Not a business that’s handed to you!

    [Reply]

    Nate Leung Reply:

    Hi Stefani,

    Exactly. This your business, and you treat it like a business. You are responsible for your own success. Thanks for the comments!

    [Reply]

  7. Ryan Biddulph

    Hi Nate,

    I am 100% new to this concept. I can see why you would want to build your venture on more solid footing 😉

    Thanks for sharing Nate,

    Ryan

    [Reply]

    Nate Leung Reply:

    You’re welcome Ryan!

    [Reply]

  8. Andrea

    Great post Nate. I understand spillover much better now

    [Reply]

    Nate Leung Reply:

    Great! Thanks Andrea.

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  9. Sanya

    Nice breakdown of the MLM spillover Nate. I think too many people come into this industry with the mindset of having their upline build their downline for them, but I believe you should come in with the mindset that you are in business for yourself, not by yourself. Don’t be lazy and rely on spillover because its no guarantee! 😉

    [Reply]

    Nate Leung Reply:

    Hey Sanya!

    Exactly, work it like a business, come in with proper expectations, know that you’re going to be doing some work and last don’t be lazy! 😉

    Have a great week ahead.

    [Reply]

  10. William

    Nate, actually that phrase is fairly new to me even though I’ve been around MLM for a long time. You explained it very nicely.
    Lately, I’ve seen people talking about this and it seems as though they are using it as a bait and switch method to recruit people.
    Obviously that’s ridiculous.

    I’ll be the first to say that comp plans confuse the hell out of me; I don’t think I’ve really understood them. All that I’m concerned with is that it’s fair and it pays me. Follow what your successful upline leaders tell you to do and you’ll be fine. Forget about all the non-sense out there. In every single MLM company there are BIG time earners regardless of the type of comp plan. So don’t get hung up on the small details.

    Good stuff Nate!

    [Reply]

    Nate Leung Reply:

    Hey William!

    Yes, it’s a very intriguing concept that gets a lot of people interested in signing up. You can actually create leverage with applications (or sign-up forms) with spill over. Say you have three people on the fence and the first person you approached with the opportunity, you can say that you have 2 people that are ready to sign up, and you will put those two people under the first person who is on the fence. This gets them to move, because if they don’t, they will lose out an a potential spillover.

    After that, you can go to person #2 and do the same thing. It’s a great way to build your business but it doesn’t really benefit the people who are being leveraged because, if they are not coming in with proper expectations, or think they can just “spill” their way into residual income, they won’t make any money, because they still need to build the other side.

    I agree, just come in, keep it simple, work on what you lack in skills but in numbers and you’ll be fine. Appreciate the feedback!

    [Reply]