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Software Vault: The Sapphire Collection
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PLN.TXT
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1994-10-26
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An MLM Plan In Action
For a look at how an MLM compensation plan may
work, here is a look at the structure used by Watkins.
It's a good illustration of how the best MLM
compensation plans are structured.
The income plan is based upon a four-week "sales
campaign" schedule. At the conclusion of each campaign
(there are thirteen campaigns in a year, so you
actually get paid 13 times instead of 12), your "Group
Retail Volume" (the total retail amount of your
purchases from Watkins plus those made by your
customers directly through Watkins and those made by
your downline representatives along with their
customers) will be used to determine your campaign
retail income percentage.
-------------------------------------------------------
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Representative Campaign Retail Income Chart
Group Retail Volume Campaign Retail
Income %
$40 to $139 28%
$140 to $379 33%
$380 to $749 38%
$750 to $1,139 41%
$1,140 to $1,859 43%
$1,860 to $2,679 45%
$2,680 to $3,699 47%
$3,700 and above 48%
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You earn the retail income percentage on all
regular product purchases made by you directly or made
by your customers through Watkins. In addition, you
will earn the difference between this percentage and
the retail income percentage earned by each first level
downline representative in your group.
Your total campaign income will be the sum of:
1. Your campaign retail income percentage
mutliplied by the retail amount of your
regular product purchases and those of your
customers ordering direct with Watkins. The
income on your purchases at the beginning of
a campaing may be at a lower income
percentage initially, but the final campaign
income will be determined by combining all
purchases during the campaign, and you will
receive any additional income due you because
of an increased income percentage.
2. Each of your downline representatives (those
you have recruited) will also be
participating in this income plan, and since
their individual campaign volumes are added
to yours to determine income percentage, your
income percentage will often be greater than
theirs. You will earn the difference between
your income percentage and their income
percentage on each first level (one you
recruited directly) downline representative's
campaign volume.
For example, if your personal orders from Watkins
during a campaign totalled $400; and the four first
level representatives in your group each had personal
orders of $300; then your total group volume for that
campaign would be $1,600 and the income percentage on
your personal orders would be 43%.
You would then also earn the difference between
the 43% and the percentage that your first level
downlines earn. In this example, with each
representative selling $300 in product, their income
percentage would be 33% on their volume, and you would
earn the additional 10%.
To calculate your total campaign retail income in
this example:
$400 (your personal volume) x 43%
(your campaign retail income) =
$172
$300 (first downline represenative's volume) x 10%
(income percentage difference =
$ 30
$300 (second downline representative's volume) x
10%
(income percentage difference) =
$ 30
$300 (third downline representative's volume) x
10%
(income percentage difference) =
$ 30
$300 (fourth dowline representative's volume) x
10%
(income percentage difference) =
$ 30
$1,600 total group volume
Your total campaign retail income
$292
Business supplies can raise your percentage level
Watkins makes materials available for business
development -- such as catalogs, brochures, videos,
etc. -- and no commission is paid on these items. But
the value of the items is added to the group volume for
the purpose of determining your campaign retail income.
You can only make money with substantial product
sales. Thus, make sure you're offering a good product
before signing up with an MLM company.