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Avoid This Type Of Compensation Plan In MLM

Sep 1, 2008
Because there are many types of compensation plans, they all have their advantages and disadvantages. The one plan that should be avoided though is the breakaway plan.

The breakaway plan is an unpopular plan as you could lose your business that you built once it reaches a certain level of success and "breaks away". It is no longer a part of your group and you are not getting paid with it. It usually appears in stair-step. And example would be...

Two things can happen if my downline builds his organization faster than me and I am a Champion; he can qualify as an Emperor before me. Taking the company's pay structure into account, overriding commissions from my downline Emperor's group is not entitled to me. His bonuses will be passed to my upline Emperor or Grand Emperor. If entire groups break away and join my upline and were I to qualify as an Emperor later, I would not be entitled to receive bonuses from his group.

Unfortunately unethical means are used to slow downlines from breaking away or overtaking him. The breakaway has become a problem and more and more companies are rewarding people who work hard to build their groups. Which means that if a downline is working harder than his upline, than he should receive a greater reward. Why should the upline blame the company if the downline is working harder and breaks away. After all, a network marketing company is based on hard working people who are willing to work in unity to accomplish the same goal. If a downline sees the opportunity to make money acquiring his own downline instead of passing the profits to an upline, a break away makes more sense since the money now becomes a part of your own organization.

The breakaway plan is not the only compensation plan offered by MLM. Googling the various MLM plans will offer insight into the pros and cons when it comes to making a decision as to which plan to choose. There are older companies who still are using the breakaway plan and as a smart business owner, selecting a plan will require in-depth research to see "which shoe" fits right for you. Avoiding the breakaway compensation plan may just be an avenue of choice that is "right up your alley." Whatever plan you choose, much forethought will have been done in making the right selection to fill your needs in adopting a compensation plan from a network marketing company.
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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