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.
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