Stair Step Breakaway MLM Plan

Key Terms in Stair Step MLM Plan

• Ranks/Levels:Different positions within the plan that distributors can achieve based on performance. Each rank offers increased rewards and benefits, motivating growth and progression.
• Sales Volume:The total sales generated by a distributor and their downline, which determines eligibility for rank advancement and commissions. It directly impacts the distributor’s earnings potential.
• Personal Sales:The sales directly made by a distributor, influencing their overall performance and eligibility for bonuses. Higher personal sales often lead to faster rank advancement.
• Downline Sales:Sales generated by a distributor’s recruits. These contribute to the overall sales volume and can help advance ranks, incentivizing recruitment and team building.
• Rank Advancement:The process of moving up in ranks by meeting certain performance criteria, such as sales volume or recruitment targets. Higher ranks come with greater rewards and responsibilities.
• Thresholds:Minimum requirements that must be met, such as sales volume or recruitment goals, in order to move up in the ranks. Meeting these thresholds is crucial for advancement.
• Unilevel Structure:A structure in which each distributor has a direct recruit (first level), and those recruits can build their own teams in subsequent levels. This creates an organized team hierarchy for rewards.

How the Plan Works

In the Stair-Step MLM Plan, distributors progress through different ranks based on their personal sales and the performance of their team. The goal is to build a strong network, and as distributors achieve higher ranks, they become eligible for greater commissions and bonuses. Once a distributor reaches a higher rank, they may experience the breakaway concept, where their downline can break away and form independent teams, while they continue earning override bonuses from those teams.

Example:

Let’s break it down with an example involving Alice, Bob, and Charlie:

Alice (Rank A):

Alice is a distributor who has been working hard to build her team and make sales. She’s currently at Rank A, which requires certain sales volume and team performance. Alice earns commissions based on both her personal sales and the sales of her downline.

Bob (Rank B):

Bob is one of Alice’s downline members. He has been successful in building his team and generating sales, so he reaches Rank B, a higher rank than Alice. As Bob reaches Rank B, he breaks away from Alice’s group, and Bob’s team becomes independent. Alice no longer earns commissions directly from Bob’s team sales but instead earns an override commission based on the performance of Bob’s group.

Charlie (No Rank):

Charlie is another downline member of Alice, but unlike Bob, Charlie has not reached a higher rank yet and still falls under Alice’s team. Alice continues to earn commissions from Charlie’s sales until Charlie reaches Rank B. If Charlie achieves Rank B, a breakaway would occur, and Alice would begin earning override commissions from Charlie’s group as well.

Earning Commissions After Breakaway:

After Bob’s breakaway, Alice no longer directly benefits from his personal sales. However, Alice now earns an override commission from Bob’s new independent team (e.g., 5% of Bob’s group’s sales). The same will happen when Charlie reaches Rank B. Alice’s focus now shifts to recruiting new members, building additional teams, and maintaining her rank to keep earning commissions from other downlines who are still part of her team.

Shift in Focus:

As Alice continues to grow her network and other members break away, she focuses on developing new leaders who will eventually break away as well. This cycle continues, with Alice earning override commissions from the breakaway groups and expanding her network to increase her income.

Key Takeaways:

• Alice progresses through the plan by building her team and achieving higher ranks.
• As Bob and Charlie reach higher ranks, they break away and form independent teams.
• Alice earns override commissions from the performance of breakaway teams.
• Alice’s focus shifts to continually recruiting new members and developing leaders to maintain her income levels as her team grows and breaks away.

This system encourages continuous growth and leadership development, with distributors aiming to build strong teams that will eventually break away, creating a dynamic and expanding network of independent leaders.

Now, let’s consider how commissions work

Referral Bonus / Sponsor Bonus

 In a Stair Step  MLM plan, Referral Bonus or Sponsor Bonus typically refers to a commission or bonus earned by a distributor when they personally sponsor (recruit) someone into the network. These bonuses are usually a one-time payout given to the sponsor for successfully enrolling a new member into the system

How it Works

• When Alice recruits a new distributor, she earns a Referral Bonus for sponsoring that person (for example, Bob).
•  The amount of the referral bonus may vary depending on the company’s compensation structure and could be a fixed amount or a percentage of the recruit’s initial purchase or enrollment fee.

Referral Bonus Amount

• The Referral Bonus is often higher than the commission earned from lower levels because it rewards the sponsor directly for acquiring a new distributor or customer.
• It may be a flat fee (e.g., $50) or a percentage of the enrollment or first purchase amount (e.g., 10% of Bob’s initial purchase).

Example

• Example 1: Alice recruits Bob into the Unilevel plan, and Bob pays a $100 enrollment fee. Alice might receive a Referral Bonus of $20 (20% of Bob’s fee) as a reward for bringing him into the system.
• Example 2: If Alice recruits Bob, who then buys a product worth $500, Alice could earn a Sponsor Bonus of $50 (10% of Bob’s product purchase).

Purpose

• Referral Bonuses are intended to encourage distributors to actively recruit others into the MLM program and grow their network.
• These bonuses are typically structured to be more lucrative than ongoing commissions from deeper levels to provide immediate financial rewards for successful recruiting.

Leadership Bonus

The Leadership Bonus is a reward mechanism in MLM systems that incentivizes distributors for their ability to lead, mentor, and grow successful teams. It encourages leaders to focus on building strong, independent teams by offering rewards based on their downline’s performance. This bonus is directly tied to the distributor’s rank and the success of the team they have developed.

How It Works:

The Leadership Bonus is earned when a distributor helps their downline achieve certain sales goals or ranks. Distributors who achieve a higher rank or maintain a leadership position within the network are eligible for a Leadership Bonus. The amount earned is often tied to the collective performance of the entire team and can increase as the distributor’s rank improves.

For instance, a higher-ranked distributor may qualify for a larger Leadership Bonus due to their team’s overall sales volume and the ability to manage and guide their downline. As the downline performs well and meets targets, the distributor is rewarded with a percentage of the total sales generated. The higher the rank of the distributor, the greater the potential for earning a larger Leadership Bonus.

Leadership Bonus Amount:

The Leadership Bonus amount varies based on the distributor’s rank within the MLM system. As a distributor advances to higher ranks, they typically qualify for larger bonus percentages. For example:

• A distributor at Rank A might earn a 3% Leadership Bonus on their downline’s total sales.
• A distributor at Rank B could earn a 5% Leadership Bonus.
• A distributor at Rank C, a higher level, could earn 7% or more based on their team’s performance.

As distributors move up in rank, their ability to earn larger bonuses increases, rewarding them for building and maintaining successful teams.

Example:

Let’s take Alice as an example. Alice is a distributor who has built a successful downline with Bob and Charlie. Her rank has progressed to Rank B, and now she qualifies for a Leadership Bonus of 5% based on the total sales volume of her downline.

• Bob and Charlie together generate $100,000 in total sales for the month.
• Alice earns 5% of that sales volume as her Leadership Bonus, so she would receive $5,000.

If Alice were to reach a higher rank (e.g., Rank C), her bonus percentage could increase, meaning she could earn more as her team continues to grow and achieve higher sales.

Purpose:

The purpose of the Leadership Bonus is to motivate distributors to not only achieve personal sales but also focus on team development and mentoring. It rewards leaders for fostering the growth of their team members and creating a strong, sustainable network. By offering escalating rewards based on rank, it ensures that leaders are incentivized to continually build and expand their teams, driving overall success for the business. This bonus structure encourages long-term growth and leadership within the network, which is key to the MLM system’s sustainability.

Override Bonus

The Override Bonus in the Stair Step Breakaway MLM Plan is a commission paid to higher-ranked distributors based on the sales performance of their breakaway groups. When a distributor in the downline reaches a certain rank, they “break away” and form their own independent team. The original sponsor continues to earn a commission override from the breakaway leg, but the amount is typically smaller than direct commissions, as the breakaway group now operates independently.

How It Works:

When a distributor reaches a specific rank and breaks away from their sponsor’s team, they become independent, but their sponsor continues to earn an override bonus from the sales of the breakaway group. The override bonus is a percentage of the sales generated by the breakaway team.

For example, if Alice is at Rank 5 and one of her downline members, Bob, reaches Rank 6 and breaks away to form his own team, Alice will continue to receive an override bonus on Bob’s sales but at a lower percentage than before Bob’s breakaway. This system encourages sponsors to support their downline members to achieve success and grow the network.

Override Bonus Amount:

The amount of the override bonus typically decreases after a breakaway occurs, as the breakaway group becomes independent. For example:

• If Alice is at Rank 5 and Bob breaks away to Rank 6, Alice might earn 3% on Bob’s sales (before breakaway, it might have been 10%).
•  The override percentage could vary based on the rank of the distributor and the structure of the company’s compensation plan. As the sponsor’s rank increases, their override bonus percentage may increase as well.

Example:

• Alice is at Rank 5 and her downline member Bob reaches Rank 6, qualifying for a breakaway.
• Before Bob breaks away, Alice earns 10% on all of Bob’s sales.
• After Bob breaks away, Alice continues to earn an override bonus of 3% on Bob’s sales (as Bob is now an independent team leader).

If Bob’s breakaway team generates $100,000 in sales, Alice would earn:

• 3% of $100,000 = $3,000 as her override bonus from Bob’s breakaway team.

Purpose:

The Override Bonus in the Stair Step Breakaway MLM Plan serves to reward sponsors for their leadership and the success of their downline, even after their downline members break away and become independent. This encourages continued support and mentorship, motivating distributors to help their teams grow and achieve higher ranks. It also creates an ongoing income stream for sponsors from the sales of their breakaway teams while allowing the breakaway groups to operate independently.

Rank Advancement Bonus

The Rank Advancement Bonus is a reward given to distributors when they achieve a specific rank within the Stair Step Breakaway MLM Plan. This bonus is designed to encourage distributors to continue growing their teams and advancing through the ranks, with higher bonuses awarded as they reach higher levels. It is usually based on achieving a certain sales volume, team growth, or a combination of both.

How It Works:

As a distributor progresses through the ranks, they unlock various bonuses, including the Rank Advancement Bonus. This bonus is typically paid once a distributor reaches a new rank, and it can be a one-time payout or a recurring bonus depending on the structure of the MLM plan. To qualify for the Rank Advancement Bonus, a distributor usually needs to meet specific criteria, such as achieving a certain sales volume or recruiting a set number of new distributors into their team.

For example, if Alice reaches Rank 6, she might receive a Rank Advancement Bonus as a reward for hitting that milestone. The bonus is calculated based on the criteria set by the MLM company, such as team performance, sales volume, or other factors.

Rank Advancement Bonus Amount:

The Rank Advancement Bonus amount varies depending on the rank the distributor achieves. Higher ranks usually come with larger bonuses. For example:

• At Rank 5, a distributor might receive a $500 bonus.
• At Rank 6, they might earn a $1,000 bonus.
• At Rank 7, the bonus could increase to $2,000.

The bonus amount is typically pre-defined by the MLM company and could be structured as a fixed sum or a percentage of the sales generated by the distributor’s team.

Example:

• Alice is at Rank 5 and reaches Rank 6. As part of her promotion, she qualifies for a Rank Advancement Bonus of $1,000 for reaching Rank 6.
• To reach Rank 6, Alice may have been required to achieve a sales volume of $50,000 and have 5 new active recruits in her team.
• Once Alice reaches Rank 6, she is rewarded with the Rank Advancement Bonus of $1,000, motivating her to continue building her team and advancing through the ranks.

Purpose:

The Rank Advancement Bonus encourages distributors to keep progressing through the ranks by rewarding them for their hard work and achievements. It motivates distributors to focus on building their teams, increasing sales, and recruiting new members. By offering a bonus for reaching new ranks, the MLM company incentivizes distributors to strive for higher levels of success, fostering growth in both the individual and the network as a whole.