There are several basic designs that are used in MLM bonus plans.
The most common, having been around the longest, is called a "breakaway" or "stairstep breakaway" plan. In this sort of plan, there are sometimes differing "discount" prices available to someone depending on their position in the plan. As you progress to the higher positions, you will get a larger discount.
The distinguishing characteristic of this plan is the "breakaway", a position where you "break away" from your upline. After this point, the product volume generated by you and your downline no longer counts toward your upline's "group volume." Now that you have "broken away," you start tracking your OWN group volume.
There is usually some provision for getting paid bonuses on the volume of "breakaway" groups. You might get paid 5% on first-level breakaways (groups directly under you), 4% on second-level groups (breakaway groups under your first-level groups), and so on. There is normally a minimum "group volume" requirement for you to qualify for these "breakaway" or "generation" bonuses. The number of generations you are paid on and the percentages you get are dependent on the company and your position within it.
Originally, companies made use of this "breakaway" design because it simplified their record-keeping and inventory problems. Without computers, it would have been impossible to track hundreds of thousands of distributors, so the companies DIDN'T track all of them. The "breakaway" levels were the only ones who worked directly with the company, and acted as distribution points to their downlines. Often they were responsible for paying their downlines as well. While many companies have gotten away from this sort of setup, the breakaway structure is still a popular design.
The "matrix" is a newer structure that came about since the advent of cheap and plentiful computers. A matrix plan has a fixed "shape" that determines the size of a downline you can be paid on. For example, if your company uses a 5x7 matrix, you can have no more than 5 people on your "frontline", and can be paid no more than 7 levels (people, not breakaway generations) deep. If you already have 5 people on your frontline, any future people you enroll will have to be "placed" somewhere below those 5 frontline people. This is called "spillover."
At first glance you might think this means you can only have 5*7 or 35 people in your downline, but that's not true: each of the 5 people in your frontline can have 5 people on *their* frontline, and so on. So a 5x7 matrix can actually hold as many as 5^7+5^6+5^5+... or almost 100,000 people.
Many new companies are using matrix plans. I have seen 5x7, 2x9, 3x12, 3x3, lots of different shapes. Study the plan carefully to understand how it will work. Don't assume that a matrix will fill evenly; most often you will have an active "leg" that will grow out of the bottom of your matrix long before other legs have filled in the rest of the matrix. But the simplicity of the matrix plans makes them very attractive to many people.
(There is also something called a "unilevel" plan, which I don't understand. I'd appreciate an explanation from someone who's familiar with unilevels.)
Finally, some new companies are combining aspects of different kinds of structures. This may result in a plan with the advantages of both and the disadvantages of neither -- or vice versa!
Make sure you understand at least the basics of the plan for any MLM you consider joining. After all, this is where your money comes from. Make sure you like what you're getting before you make the plunge.
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