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How to Compensate Distributors in Direct Sales

Good compensation plans are designed to reward the behavior that helps build and maintain product sales. Each compensation plan is composed of multiple commissions, each filling a different role, rewarding a different behavior. Companies need to understand the advantages to each type of commission and build a successful strategy that meets the needs of every type of distributor that will profit their organization.

  • March 26, 2016

    Bringing Compensation Plans Into Perspective Part 4

    Hybrid Uni-level and the 5% Plus Theory How does a Hybrid Uni-level Compensation Plan create the above- referenced 5% Plus Commission? (See Foundation Principles, 5% Plus Theory.) With this plan, there are only customers and distributors. You can receive retail commission on customers if they’re first leve... Read more ›

  • March 25, 2016

    Bringing Compensation Plans Into Perspective Part 3

    The Three Proven Compensation Plans Over the last 25 years, three predominant compensation plan types have been implemented by select network marketing companies to achieve landslide success: • Breakaway 
• Hybrid Uni-level • Binary Each of these plans can work and be a good choice. Herbalife, Nu... Read more ›

  • March 24, 2016

    Bringing Compensation Plans Into Perspective Part 2

    5% Plus Theory The 5% Plus Curve observed in network marketing industry commissions provides a standard for network marketing companies to allocate commission money. The 5% Plus Theory says, in order for a compensation plan to be viable: 1) each upline distributor that receives commissions must receive at le... Read more ›

  • March 23, 2016

    Bringing Compensation Plans Into Perspective Part 1

    While there are many factors that contribute to the success or failure of direct selling companies, the compensation plan is one of the biggest. The companies who achieve long-term success always have a sound one. Plans that are not well designed and consequently fail to motivate distributors can become a bri... Read more ›

  • October 12, 2015

    Problems The FTC Sees In “Pay To Play” Commission Plan

    The FTC's primary cause of action alleges that business practices constitute unfair and deceptive trade practices and are therefore a violation of Section 5 of the FTC Act. The FTC is ultimately seeking to prove that the program is a pyramid because all pyramids are inherently deceptive. The fundamental eleme... Read more ›

  • September 23, 2015

    Back to the Breakaway?

    One of the key arguments in the recent Vemma versus the FTC case was about the use of personal volume (PV) requirements for compensation qualification. The FTC contends that compensation must be paid on the sale of product and not on recruitment. But if a company requires PV for compensation, it is unclear if... Read more ›

  • September 3, 2015

    Binary Compensation Plan

    We sat down with Ray Rawlins, commission programmer of more than 40 years, to get his insights about binary plans. How do they work? What variations have been seen in the industry? What bonuses are they often supplemented with? How are they programmed? Let’s find out! https://youtu.be/XUl7_wTHo9A Full T... Read more ›