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Advantages And Disadvantages Of Stair Compensation Plan In Network Marketing

Sep 1, 2008
The step and ladder plan or stair-step has requirements which must be met to climb the "Stairs of Success". Every step is a promotion which is usually based on the volume produced. Each step gives you a larger cut in the network marketing business. The harder you work, the more you apply yourself, the quicker the step to the top becomes.

In stair-step plans, a demotion is a way to ensure that a certain volume is produced each month. In order to maintain that rank, a certain volume has to be maintained or exceeded. An individual who is a leader and who sells a total of $200,000 in his entire team is promoted to a champion from a leader. He/She is expected to generate that same volume or be demoted back to a leader. Climbing that step and ladder plan involves not looking down but a constant motion of climbing towards the top.

Low repeat sales will generate a higher minimum entry fee than the average MLM. Low repeat sales mean less maintenance and the majority of the income will come from recruiting new blood. If someone tells you that the minimum income for a "grand emperor" is merely $100,000 a month, don't fall for it. It all depends on the generated volume. Maintenance involved plans do guarantee an income, though.

Major incentives are handed out by encouraging everyone to climb the ladder who is willing to work and fight harder for the end result. If your downline is of lower rank than you, you are then more likely to override due to a larger group. But, if your downline works harder than you and sponsors more people than you, his rank can be higher than yours. Breakaway is common in certain plans and we will see how that works.

There are disadvantages to this plan. What if your downline is really down the line? He/She may be neglected by some distributors because the money is not there. In order to qualify as a champion, you will need to directly sponsor three leaders. Should one becomes a leader your focus will be on getting the other two groups to become leaders. It is very possible that the first leader might feel neglected; another disadvantage to this plan.

As you can see, there are advantages and disadvantages of stair-step compensation plan in network marketing and becoming familiar with them will make "stepping up the corporate ladder" much less painful thus generating more income for you as the upline and for your downlines.
About the Author
Cindy Heller has helped thousands of 'lost' marketers to create a passive income online. Learn how she did it from this free online guide: Passive Income Blueprint.
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