Next, I will go in detail about the more popular types of plans…
1) The Stairstep
2) The Unilevel
3) The Binary
4) The Breakaway
5) The Matrix
6) The Australian Two Up
7) The Hybrid
1) The Stairstep
Example (Purely for illustrational purposes only, not actual.)
- Grand Emperor
- Emperor
- Champion
- Leader
- Noble
- Peasant
The Stairstep or step and ladder plan is a simple plan that has requirements that you must meet to get up the “Stairs of Success” Every step is a promotion usually based on achieving a certain volume and each promotion or rank gives you a larger cut.
Demotion in stairstep plans to ensure a distributor’s group commits to a certain volume every month. It gives a particular rank a guaranteed income. Demotion in this case means that you must either maintain a certain volume every month (or quarter or fiscal year) in order to maintain that rank. Let us say for example, Anthony achieves a sales volume of $200,000 in his entire team (for a certain timeframe) and that promotes him from Leader to Champion, certain companies require him to keep up that same sales volume the next time or else he will be demoted back to a leader. In certain plans, there is no demotion in rank, so the group sales are accumulated for reaching the next level.
Maintenance here plays a key factor how building a solid group will look like. If there are low repeat sales for the product being marketed, expect the minimum entry fee to be higher than the average MLM. This is because low repeat sales means less
maintenance hence the majority of the income comes from recruiting new blood. If nobody does maintenance in a Stairstep plan, having a high rank doesn’t earn you money so don’t be a fool if someone tells you that the minimum income for a grand emperor is $100,000 a month – it all depends on the volume generated. On the contrary, plans with maintenance involved do guarantee an income or else you will not be in that rank.This type of plan is one of the oldest and longest plans around. The advantage of climbing the ladder gives major incentives for distributors to work harder and fight for the target. The larger your group the more you override even up to infinity levels as long as your downline is of a lower rank than you. There is also a fair system involved lets say if
your downline works harder than you and sponsors more people, he can actually have a rank higher than you and that is when breakaway in certain plans come into play (discussed in the breakaway plan below)The disadvantage however, is once a downline reaches a certain rank (lets say you need 3 directly sponsored leaders to qualify as a champion), one of them becomes a leader while you focus on making the remaining 2 groups to become leaders, the first leader might be neglected in the process. The other disadvantage is if the downline is too far deep in the organization (lets say your downline‟s downline all the way down 10 generations), some distributors may neglect helping them because the monetary incentive is too small.
2) The Unilevel
The Unilevel is a simple number of levels that the company will pay you, and usually there is no promotion or rank. You make money by getting a certain override off of the volume, and usually there is a requirement of volume to qualify for a check.
The advantage here is you don’t have work your butt off during certain seasons to fight for that rank. You can sponsor as many people as you can and your income comes from a large volume of people in your organization. For example, you can personally sponsor 5 people, and these 5 will look for 5. after 4 generations you will have 5 to the power of 4 in your organization (780 people) and the calculation of your sales volume will give you a straight forward income.
The disadvantage however, is there is no incentive for developing many different groups (called legs). In spite of conditions in a plan imposed by the company (that you have to sponsor a minimum number of legs) some Unilevel people tend to let the strong downlines do all the work as in wait for their downlines to sponsor MORE people than themselves, which is a poor reflection of leadership.
In the Unilevel, there is no demotion (the only demotion is leaving the company) and maintenance plays a key part in the long term income.
3) The Binary
The Binary is an interesting design for a Comp Plan. It usually has 2 “legs” that you can have “Business centers” in, and you have a volume requirement to get paid on each leg. There is what is called “balancing”. in the Binary…you must balance the volume from each both A and B group to make sure you maximize your commissions. In the illustration above, the A group is the strong leg (or the giant leg) while the B group is called the weak leg (or the profit leg). A has more people than B (assume they all produce the same volume per person). B needs to find 2 more people in order for U to „balance‟ hence maximizing U‟s income. The main advantage of this plan is spill over. Allow me to illustrate U sponsors 2 friends. In a binary, the company limits each distributor to have a MAXIMUM of 2 people. A and B were previously recruited by U. U needs to „balance‟ his
group by helping B find 2 people. But let us assume that B is not actively building the business at the moment, so what does U do? He finds and sponsors 2 people HIMSELF and places both of them under B and they become B1 and B2. This is called SPILLOVER.U
A B
A
2
A
1
U
A B
A
2
A
1
U
A B
A
2
A
1
B
1
B
2The advantage of spill over is that when everyone works as a team, the tree will fill very fast as all uplines and downlines work together to balance each other‟s networks. It is also immune to the problems in unilevel or stairstep plans with downlines being too deep in the organization. A binary can be balance depending on which side the downline is in and not how deep.
The disadvantage however, is that this plan is particularly attractive to lazy people who don‟t do any work and expect free handouts from their uplines. Imagine what will happen if everyone waits for their upline to place people under them? It doesn’t develop strength.