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The multi-level marketing (MLM) business has a somewhat tarnished image. Part of the problem has stemmed from unscrupulous parties adopting the payout structure in support of scams and frauds. Another reason for discontent is dissatisfaction many business operators have had with various variations on the payment plan.

At its core, MLM is attractive. Adam sells to Bob. Adam gets a commission. Bob sells to Charlie, Bob and Adam get a commission. The process can go deeper, but the idea is that one gets payment not only for the direct sales they make but also for the direct sales made by others one has recruited. Of course, that also means that a percentage of ones own sales and commissions are also getting kicked up to someone else.

The possibilities this system creates are attractive, but there is also a downside. Part of ones earnings will always be destined to disappear in the form of a payment to the recruiter. It can also be a difficult system to track and can require one to spend a great deal of time dealing with his or her downline to make the process a success.

These weaknesses, combined with some of the controversy surrounding MLM has led to the creation of some alternative payment structures that are gaining popularity in the online marketing world. One of the most attractive alternatives to MLM is the one-Up compensation plan. This system has been embraced by some online business industry leaders and is gaining steam as a powerful alternative to other MLM plans.

With a one-up plan, ones first sale is passed directly to the person who made the initial referral to the online business. After that, one earns direct commissions from then on out. Additionally, if one sponsors any other business participants, they receive the commission from the sponsored individuals first sale. The first qualifying sale of individuals sponsored one level beneath you also come back to you. Its a system similar to that used in the insurance and real estate industries for several years, and it is proving to be very well-received and lucrative for online home business, as well.

One-up compensation plans are time-tested in the brick and mortar world and avoid many of the problems frequently associated with MLM plans. Programs like the Prosperity Automated System (PAS) have been successfully using one-up structures for some time, clearly demonstrating that there is a fair and better way to handle referral business and commissions for online businesses.