MLM Compensation Plans - The Stairstep Breakaway Plan
This is the oldest and most common type of network marketing compensation plan. After meeting certain
performance criteria, a distributor advances in rank and "breaks away" from his or her original sponsorship line.
The original sponsor receives a percentage override on the sales of the entire breakaway organization. In a way, a
stairstep breakaway plan is a unilevel plan with the flexibility to motivate distributors to perform and advance.

Its chief advantage, says White, is that it has a good track record, is easy to modify, is accepted by regulatory
agencies, and is driven by volume and performance.

The primary disadvantage of this plan is that it is sometimes so complicated that it’s difficult to explain to new
recruits. Another disadvantage is that if the company does not monitor its distributors, they tend to get involved in
inventory loading. And sometimes, there is an unreasonably high ongoing monthly personal purchase volume

Nevertheless, the stairstep breakaway plan remains the most tried-and-true type of plan out there today — and the
most likely to survive in the decades to come.

Back to MLM Compensation Plans
Brought to you by MLMLegal is a valuable resource to the MLM and Direct Sales industry. Use
thissite to explore the different compensation plans, browse articles written by Jeffrey
Babener, view the latest posts from attorney Babener's blog, and more. To find more
information about the direct selling industry, visit the best MLM resource on the web:
© Jeffrey Babener, 2013
The Sister Website to