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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.

Editor's Picks

  • February 26, 2018

    Designing qualifications for distributor ranks and commissions

    When you design a compensation plan, there are a lot of details that you have to get right. Today we’re going to talk about the rules that determine when and how distributors advance through the ranks and qualify for monthly commissions. Your rules answer the question “What do I need to do each month to b... Read more ›

  • February 13, 2018

    Compensation Plan Payout

    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 have a sound plan. Plans that are not well designed and consequently fail to motivate distributors can become a brick wall to c... Read more ›

  • January 29, 2018

    What’s a Binary Plan?

    The binary compensation plan is the newest of the three common plan types. When it arrived on the industry scene, this type of plan was the complete opposite approach to commissions than existing plans. The difference was night and day. Before the binary emerged, every other compensation plan relied on the fo... Read more ›

  • January 22, 2018

    What’s a Unilevel Plan?

    The unilevel was the first plan to challenge the dominance of the breakaway. It came on the scene in the mid 90s, and its inventors intended it to be a simpler and fairer plan that was easier to understand. Over the years, unilevels have come to be just as complex as breakaways. The backbone of a unilevel ... Read more ›

  • January 15, 2018

    Analyzing your compensation plan

    Podcast episode 19

    Mark Rawlins, Founder and CEO of InfoTrax Systems, joins Kenny to talk about MLM compensation plans. What direction is the direct selling industry going on compensation? What’s the perfect compensation plan? How do you know if your direct sales commissions are working? How can you use data and analy... Read more ›

  • January 9, 2018

    What’s a Breakaway Compensation Plan?

    Breakaway compensation plans are the oldest of the three common plan types. They’ve been around since the 1970s. To this day, they’re the most popular compensation plan among party plan companies. A breakaway compensation plan uses two primary bonuses and two defined sales force classifications: sales peo... Read more ›

  • December 26, 2017

    The Role of the Fast Start Bonus

    As you’re designing your compensation plan, you may want to consider implementing a fast start bonus. These are bonuses that are designed to round out your primary commissions—focusing earnings on distributors your basic plan doesn’t automatically reward well. They can be designed to reward salespeople ... Read more ›