Product-Based Trees for MLM Commission Systems
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Solution Overview
Problem
Current multi-level marketing (MLM) systems do not effectively incentivize users to promote products outside their own networks without contractual obligations, exclusivity requirements, and high minimum purchase thresholds, and lack integration with internet-based consumer influence and dynamic commission structures.
Innovation Solution
A system where a buyer becomes a user of an administration network upon purchasing a registered product, receiving a unique code to share, allowing them to earn commissions through referrals and enabling an iterative structure of commission payments across multiple levels, without contractual signup or exclusivity, and utilizing online stores for product sales.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If traditional MLM systems use contractual obligations and exclusivity requirements, then commission payment structure is established, but user freedom and ease of operation are reduced
Solution Approach 1:
The patent extracts and eliminates the contractual obligation and exclusivity requirements from the MLM system. Users can promote products without signing contracts or being restricted from other MLM companies, while still receiving commissions through the referral code system. This removes the harmful constraints while preserving the core commission payment function.
Solution Approach 2:
The patent introduces a referral code as an intermediary mechanism that enables commission payments without requiring contractual relationships. The referral code acts as a mediator between the referrer and the purchase, automatically tracking and enabling commission payments without needing exclusivity agreements or contracts.
2Reliability
If MLM systems require minimum purchase thresholds, then commission eligibility is established, but accessibility and ease of operation are reduced
Solution Approach 1:
The patent removes the minimum purchase threshold requirement from the commission eligibility criteria. Users can earn commissions on any purchase amount through referrals, eliminating the barrier of minimum purchase requirements while maintaining reliable commission payment structure.
Solution Approach 2:
The patent changes the eligibility parameter from minimum purchase amount to referral code usage. Instead of requiring a minimum purchase threshold, the system now bases eligibility on whether the referred user used the referrer's unique code, making the system more accessible while maintaining commission reliability.
3Device complexity
If MLM systems use permanent tree structure placement, then commission calculation is simplified, but adaptability and versatility are reduced
Solution Approach 1:
The patent implements a dynamic commission structure where referral codes can be generated and used at any time, and commission eligibility can change based on real-time purchase data. The system allows for flexible commission calculations that adapt to different scenarios without requiring permanent tree structure placement, maintaining simplicity while enabling versatility.
Data Source
AI summary
The present disclosure is directed to a system and method to allow sellers of products to establish individual products in a multilevel marketing (MLM) commission system, where the product is offered and sold to a first purchaser—who then actively by requesting a code, or passively, through the purchase of the product, becomes a user of the commission system. This user is provided a code such that the code may be passed onto followers of the registered user, either directly or via a referral hyperlink. The registered user will be allowed to advertise the product to a second purchaser and the second purchaser will be allowed to purchase the product and provide advertisements to other purchasers. Commissions paid to respective downline purchasers for a single product may be limited by a preset number of defined levels. After a product is purchased, commissions are paid out to each respective purchaser according to the defined commission levels. Purchase of the product may be facilitated by an online store controlled by the system. Products may be automatically added to the online store. The referral hyperlink may be directed to the online store or to the default landing page provided by the third party vendor of the product.