Something Big that's often Misunderstood...(1)

To follow on with a post from some months back... we'd herewith like to discuss in an academic & logical fashion -- arguably the most misunderstood compensation plan the industry has produced.

Well, there isn't a perfect solution to a compensation plan, really -- it will depend on the way you intend to work, how it suits your habits... & especially how it suits the network dynamics & the majority of people referred into the biz...
simply because if its not something that suits the majority (& because your performance will depend on the majority's performances) why even waste effort on it?
Makes sense?

Before we discuss its details, let's quickly talk about the pros & cons of the industry's sister plans...
--> keeping in mind that 90% of the people getting involved in network marketing are part-timers involved in 9-5 work, with little intention of going full-time into network marketing in the short-term.
--> also, keeping in mind that the point of network marketing is to leverage on the work done by the network as a whole (promoting products), thus resulting in residual income.


The Unilevel

• One can sponsor as wide a frontline as they wish (i.e. many personally-sponsored distributors on 1st level).
  Many legs. (For practicality here, any plan that requires 3 or more frontlines / legs, will be discussed as a Unilevel.)
• Good for building a large organisation in an acceptable time.
• Not practical for majority of distributors who realise the great biz opportunity the industry presents, but only have part-time to spare on their biz.
  (too much effort required to meet specified large number of personally-sponsored distributors to qualify for "executive/leadership" bonuses.)
• Incorporates variations of depth-for-width compensations.
  (e.g. you can't earn level 2, unless you personally sponsor 2; you can't earn level 3, unless you personally sponsor 3; etcetc.
  OR, you can't earn beyond level 3 if you don't attain "X" pin title; you can't earn beyond level 4 if you don't attain "Y" pin title; etcetc.)
• Cuts / breaks off revenue after certain levels.
  (e.g. only pays up to level 5, or 6, etc.)
• May include a "dynamic compression" characteristic, which essentially does not apply to the small-time distributors who simply do not have downline volume/numbers.
• May include a periodical "bonus pool", which again does not apply to small-timers.
• May include an "infinity bonus", which does not apply to small-timers.
• Very large organisational downline volume (monthly/quarterly/etc) required to qualify for bonuses/commissions.
• All product volume gets reset (flushed) at the end of the month.
• Revenue-wise, great for upfront paybacks (small sums though), but requires non-stop work to manage one's wide frontline (& each downline's wide frontlines), and to continue sponsoring new distributors to meet commission qualifications & offset for attrition.
• "Modern" methods of building Unilevel incorporate various degree of stacking or streamlining. These are basically binary payplan biz building traits which are applied negatively to unilevel biz building. Among other detrimental results, distributors are liable to get terminated! (See next post.)

--> A possible but difficult residual income plan, especially for part-timers.
It is essentially a "working plan".

The Breakaway

• aka the "stairstep breakaway" plan.
• Almost always a feature of Unilevel plans.
• Wide array of incentives / bonuses to encourage a distributor to continue building his/her organisation.
• It is literally mandatory to continue building one's organisation, especially when revenue is lost when a downline matches a particular pin title that cuts-off earnings from the relevant sub-organisation.
  (one either has to increase consumer productivity from sidelines to stay ahead of that downline's pin title,
  OR, to simply make up for lost product volume.)
• Very large organisational downline volume required to qualify for bonuses/commissions.
• All product volume gets reset (flushed) at the end of the month.
• Tendency for inventory loading (or "front loading" or "stacking" of memberships to gain pin titles / ranks.)
• Recent modifications to Breakaway plans have reduced a "total" cut-off of revenue.
  (some plans now pay back a (smaller) % of the volume that was to be originally cut-off,
  OR, rewards the distributor an "extra few levels".
  YET, distributors still feel that it is awesome to be receiving a small(er) % of breakaway volume. Question to these happy campers is: Why not receive the same (larger) % as compared to before breakaway, dopehead?!

--> A recent "invention" in compensation plans is the "hybrid plans".
Well, a unilevel is a unilevel. Once you've got to sponsor more than 2 referrals, its not a "binary" any longer. Who are these companies trying to kid?? Obviously the unsuspecting small-time distributors/consumers!
Again, a possible but difficult residual income plan, especially for part-timers.


The Forced Matrix
(not referring to the "matrix schemes" aka "elevator plans" which tend to be illegal in nature)

• Mostly requires a fixed number wide frontline (many personally-sponsored distributors), and a fixed number of levels deep .
  Keeps one's organisation within a "A x B" configuration. (e.g. 7x5, 8x4, etcetc.)
  i.e. no revenue from small-time distributors who fall outside of your "A x B" matrix.
• Great for building a seemingly large/successful organisation.
• Allows an "upline" to place a new "downline" below an existing downline (aka "spillover").
  (provides motivation, shows organisational growth & encourages teamwork.)
• Incorporates variations of depth-for-width compensations.
• Again, not practical for majority of distributors who only have part-time to spare on their biz.
  (too much effort required to meet specified number of personally-sponsored distributors to qualify for levels of compensation and/or "leadership" bonuses.)
• Moreover the forced matrix structure gives people the false urge to sit back and have the matrix organisation form on its own.
• May include an "infinity bonus", which does not apply to small-timers.
• All product volume gets reset (flushed) at the end of the month.
• Revenue-wise, moderate for upfront paybacks, but requires non-stop work to manage/manipulate the matrix to qualify for one's desired monthly paycheque.
• Basically, the deeper one goes in a matrix, the more people need to be placed sideways (on the same level) before someone gets placed below on the next level. Large MLM earnings surely take a long time to build. Good payplan for generating hundredaires.

--> Yet again, a possible but difficult residual income plan, especially for part-timers.
All in all, if a part-timer can't refer enough new distributors into their business in their part-time efforts... how in the world are they going to build up the mandatory large organisations to bring in their promised "full-time income" as illustrated above?

Also, if you're not confused by now, we are!! There are just too many hocus-pocus "bonuses" being thrown on the table just to lure ignorant bystanders into signing up.

And one major factor of the above plans that prevents a new distributor from obtaining "automatic" & selfless biz support from the seemingly "large population" of senior partners is the simple fact that most of the mid-level "senior partners" (uplines) do not qualify for "infinity" bonuses that rewards them for the selfless effort put in when time is spent helping out a junior distributor who falls outside of his/her earning levels.


<Part 2 coming up... >

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