Key Terms of the Stair-Step MLM Plan
Ranks/Levels:
Different statuses that a distributor can achieve based on their performance. Each rank offers increased rewards and benefits, motivating growth and progression.
Sales Volume:
The total amount of sales generated by a distributor and their downline. This volume determines eligibility for rank advancement and commissions, and it directly impacts income potential.
Personal Sales:
Sales made directly by a distributor. These influence overall performance and eligibility for bonuses. A high volume of personal sales often accelerates progression.
Downline Sales:
Sales generated by a distributor’s recruits. They contribute to the total sales volume and help in achieving rank goals, which encourages recruitment and team building.
Rank Advancement:
The process of moving to higher ranks by meeting certain performance criteria, such as a specific sales volume or recruitment targets. Higher ranks offer greater rewards and responsibilities.
Thresholds:
The minimum conditions that must be met (sales volume, number of recruits, etc.) to move up the ranks. Reaching these thresholds is essential for advancement.
Unilevel Structure:
An organization in which each distributor can directly sponsor other members (level 1), and those recruits can, in turn, build their own teams (following levels). This structure creates a clear team hierarchy for distributing rewards.
How the Stair-Step MLM Plan Works
In the Stair-Step MLM Plan, distributors progress through various ranks based on their personal sales and their team’s performance.
The goal is to build a strong and stable network. As they reach higher ranks, distributors become eligible for increased commissions and bonuses.
Once an advanced rank is achieved, the concept of breakaway may apply: a distributor’s downline can separate and form an independent team, while still allowing the sponsor to continue earning override commissions.
Example
Let’s break down the process with an example involving Alice, Bob, and Charlie.
Alice (Rank A)
Alice is a distributor actively working to grow her team and generate sales. She is currently at Rank A, which requires a certain sales volume and team performance.
Alice earns commissions based on her personal sales as well as the sales made by her downline.
Bob (Rank B)
Bob is part of Alice’s team. He has successfully built his own team and generated a solid sales volume.
He reaches Rank B, a higher rank than Alice’s. At this point, Bob breaks away from Alice’s team, and his team becomes independent.
Alice no longer receives direct commissions from Bob’s team sales, but she now earns an override commission (e.g., 5% of Bob’s team sales).
Charlie (No rank yet)
Charlie is another member of Alice’s team, but he has not yet reached a higher rank. He is still part of Alice’s structure, which means she continues to earn commissions from his sales.
If Charlie eventually reaches Rank B, he will also break away, and Alice will begin receiving override commissions from his team as well.
Earning Commissions After Breakaway
After Bob’s separation, Alice no longer benefits directly from his personal sales. However, she now earns an override commission on the sales generated by Bob’s new independent team (for example, 5% of total sales).
The same principle will apply once Charlie also reaches Rank B.
Strategy Shift
As more members of her team reach higher ranks and break away, Alice must continue to recruit new members, develop new leaders, and maintain her own rank in order to keep earning commissions from her still-active teams.
Key Takeaways
Alice progresses in the plan by growing her team and reaching higher ranks
When Bob and Charlie reach higher ranks, they break away and form independent teams.
Alice earns override commissions based on the performance of these teams.
Her goal becomes to continually recruit and develop new leaders to sustain her income as her team evolves
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This model promotes continuous growth and leadership development by building a strong network of independent leaders.
Voyons maintenant comment fonctionnent les commissions.
Referral Commision
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
How It Works
The Leadership Bonus is awarded when a distributor helps their downline achieve certain sales goals or advance in rank. Distributors who reach a higher rank or maintain a leadership position within the network become eligible for this bonus. The amount earned often depends on the overall performance of the entire team, and it can increase as the distributor advances in rank.
For example, a high-ranking distributor may receive a larger Leadership Bonus based on the total sales volume generated by their team, as well as their ability to guide and support their downline. When the team meets its objectives, the distributor receives a percentage of the total revenue generated. The higher the rank, the greater the earning potential.
Leadership Bonus Amount
The amount of this bonus varies depending on the rank achieved within the MLM system. As distributors climb the ranks, they gain access to higher bonus percentages.
For example:
A distributor at Rank A might receive 3% of the total sales made by their downline.
At Rank B, the bonus might increase to 5%.
A more advanced distributor at Rank C might receive 7% or more, depending on team performance.
Example
Alice is a distributor who has built an effective downline with Bob and Charlie. She has now reached Rank B, which qualifies her for a 5% Leadership Bonus.
If Bob and Charlie together generate $100,000 in sales during the month,
Alice receives 5%, which equals $5,000.
If Alice moves up to Rank C, her bonus percentage would increase, allowing her to earn more as her team becomes even more productive.
Purpose
The Leadership Bonus aims to motivate distributors to focus not only on their own personal sales but also on team development and mentorship.
It rewards leaders who drive the growth and performance of their networks.
By linking the bonus to rank, the system encourages leaders to build strong teams, ensuring sustainable growth and the overall success of the MLM system.
Override Bonus
In the Stair-Step MLM Plan with Breakaway, the override bonus is a commission paid to higher-ranked distributors based on the sales performance of downline groups that have broken away.
When a downline member reaches a certain rank, they “break away” and form their own independent team. The original sponsor continues to receive an override bonus on that team’s sales, but at a lower rate compared to direct commissions, since the 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. However, their original sponsor still receives an override bonus based on the sales generated by the newly independent team.
This bonus is typically a percentage of the sales made by the breakaway group.
Example:
If Alice is at Rank 5 and her downline member Bob reaches Rank 6 and breaks away to form his own team, Alice continues to receive an override bonus on Bob’s team’s sales—but at a lower percentage than before the separation.
This system encourages sponsors to support the success of their downline and help grow the network.
Override Bonus Amount
The bonus percentage usually decreases after the breakaway, since the group becomes autonomous.
For example:
The percentage may vary depending on the distributor’s rank and the company’s compensation structure. A higher rank may grant a higher override rate.
Real-World Example
Alice is at Rank 5.
Bob, part of her downline, reaches Rank 6 and breaks away.
Bob and his team generate $100,000 in sales after the breakaway.
Alice receives an override bonus of 3%, which equals $3,000.
Purpose
The override bonus is designed to reward leadership and mentorship efforts provided by sponsors—even after their team members become independent.
It encourages continued support of the team and motivates distributors to help their network grow.
This system creates a residual income stream for sponsors, while allowing breakaway teams to operate independently.
Rank Advancement Bonus
The Rank Advancement Bonus is a reward given to distributors when they reach a specific rank within the Stair-Step MLM Plan with Breakaway.
This bonus is designed to encourage distributors to build their teams and advance through the ranks, with larger bonuses awarded at higher levels.
It is generally tied to achieving a certain sales volume, growing a team, or both.
How It Works
As a distributor climbs the ranks, they unlock various rewards, including the rank advancement bonus.
This bonus is typically paid once when a new rank is achieved, although in some plans it can be recurring.
To qualify, the distributor must meet specific conditions such as achieving a set sales volume or recruiting a certain number of active new distributors.
Example:
If Alice reaches Rank 6, she may receive a bonus in recognition of this milestone.
The bonus amount is defined by the MLM company’s rules and may depend on team performance, revenue generated, or other specific criteria.
Bonus Amount
The bonus amount increases with higher ranks:
For example:
Rank 5: $500
Rank 6: $1,000
Rank 7: $2,000
These amounts are predefined by the MLM company and may be paid as a fixed sum or as a percentage of the sales generated by the distributor’s team.
Real-World Example
Alice is at Rank 5 and advances to Rank 6.
To qualify, she must achieve $50,000 in sales volume and recruit 5 new active distributors into her team.
Once these conditions are met, she receives a $1,000 rank advancement bonus, which motivates her to keep growing her network and aim for the next rank.
Purpose
The rank advancement bonus aims to:
Reward distributors for their efforts and progress.
Encourage team development and increased sales.
Promote ongoing activity within the network.
By offering bonuses at each milestone, the company motivates distributors to aim higher, fostering a culture of continuous personal and team growth.
