MLM Comp Plan Ups & Downs - The Aussie 2 Up

In my previous post "MLM Comp Plan Ups & Downs - The Matrix" we examined the advantages and disadvantages of that type of network marketing compensation plan. Now let's see what we can learn about the Aussie 2 Up.

In the Aussie 2 Up compensation plan you get to give away your first two recruits to your sponsor. Then she gets paid the commissions for the work you just did. Most entrepreneurs join a company with an Aussie 2 Up comp plan for it's big up-front profit commissions.

WARNING: Three Critical Questions You Must Ask About Any Compensation Plan

1. How much volume do I need to make a given income goal?
2. How many people do I need to make a given income goal?
3. What do I need to do to make a given income goal?

Those considering building with such a comp plan should be aware of the down side of the Aussie 2 Up so they do not get blindsided. Let's take a look at the good and the bad of the Aussie 2 Up.

The good side of the Aussie 2 Up.

1. Ideal for sponsor monsters: since they have the Green Lantern ring, the power suit, etc. they do well with this plan because they recruit lots of people who give their first two recruits up to them. So the sponsor monster can make lots of money.
2. It's shark territory: shrewd people will place duds or fictitious names into their first two positions so that when their next two positions come along they can place super recruiters there & be in fat city.

The bad side of the Aussie 2 Up.

1. Big ticket start-up: often from $2,000 to $20,000.
2. Stand-alone product: no back end sales are being made for residual income.
3. Works against industry averages: Average network marketers without a system for duplication sponsor 2.7 people in their entire career. That average person then gets paid on 0 to 1 person they place into their downline.
4. Treachery is a two-way street: your sponsor may help you build so he can take your two best recruits (then abandon you), or you can give him your dog and cat, or your toddler twins … and then work with real builders.
5. No residual income: no sponsoring = no income.
6. Against the numbers again: about 0.01% of the world's population can make an Aussie 2 Up work.

Building an Aussie 2-Up comp plan is a back-breaker … even for the 15% of the population that like it. Oh, and you can forget about duplication.

An extremely high ticket one-time-order product with this plan is the norm. Back end products for residual income don't exist.

The only equality in an Aussie 2-up comp plan is the chance that either the recruiter or the recruit can cheat the other out of their due commissions by manipulating the plan's flaws to their own advantage.

Can you recruit at will? No? Well, then avoid the Aussie 2 Up compensation plan like the plague. The numbers are just not in your favor.

I appreciate you,

Bill Tessore

MLM Comp Plans - Aussie Two-Up Breakage

In MLM Comp Plans - The Beloved Aussie Two-Up we saw why this compensation plan is so popular with some network marketing companies. Now let's bounce on over and take a look at how they create breakage down under.

I tell ya kid that Joie is a wreckin' machine!

The two forms of breakage in the Aussie two-up makes this comp plan as brutal as boxing with a kangaroo.

The First Two Rounds
Your first two recruits automatically go to your up-line sponsor who talked you into getting into the ring. Oy! Score two rounds for the 'Roo!

The High Entry Fee
Naturally you have to buy the product to qualify to get a check. So besides going the distance with that slap happy marsupial you get to pay really big bucks for a product or service that can often be found elsewhere for much less … if not for free.

What are your chances of going the distance?

Most folks who choose a company with an Aussie two-up comp plan hear about the big commission checks and jump right into the ring. They don't know that kangaroo is the champion because 97% of all contenders rarely go that third round and get a personal downline recruit of their own.

The would-be entrepreneur who finds herself facing this brute from the Out Back now must try to get to that coveted third round because that's the only way for her to make a profit.

There are many network marketers out there who faced Joie and have only scars, empty wallets, and broken dreams to show for it. For those who survive this mlm nightmare with big Joie it's still a tough fight because now they have to find another hungry kid eager enough to face him in order to get a check.

Are you a network marketing Muhammad Ali? Then good luck kid, you'll need it. If you'd rather avoid a beating, get all the credit (and money) for your efforts, and not pay a fortune, then look for a company that will treat you right and help you go the distance for that long-term residual income you deserve.

I appreciate you,

Bill Tessore

MLM Comp Plans - Why Companies Love The Binary

In "MLM Comp Plans - Why MLM Companies Love The Matrix" I revealed the dirty MLM secrets behind companies' love affair with the matrix compensation plan. Today I'm throwing back the covers off of the Binary and its network marketing lovers.

Here's what a basic binary looks like.

A binary comp plan has two down-line legs of sponsorship. One leg is "weak" while the other is "strong". A classic binary requires ⅓ of all sponsored recruits be placed in the weak leg and the rest must go into the strong leg.

To get a check a perfect ⅓ - ⅔ balance between the two legs must occur when the comp plan "cycles". A cycle is a production bonus pay period.

Here's what companies love so much about binaries.

• Production bonuses are only paid out on a perfectly balanced ⅓ - ⅔ structure … at the end of the pay cycle.
• No money is paid out without that all-important perfectly balanced ⅓ - ⅔ structure.
• No monies are paid out on activity in the strong leg.
• The company keeps a minimum of ⅔ of all monies generated by the entire distributor base.
• The ⅓ - ⅔ structural balance requirement makes payout of residual income virtually impossible.
• Very few network marketers, especially beginners, understand how this comp plan really works so droves of people join and spend lots of money only to learn the hard way.

Most people never make any money with a binary plan because it’s too hard to balance both legs.

Sometimes a rep desperate for a check finds an opportunity seeker and then "gift" excess strong leg members to her saying "I'll put all these people beneath you so all you have to do is build the other leg."

The reality is the newbie is least likely to ever build the weak leg enough to achieve the ⅓ - ⅔ balance so critical to getting paid.

All the while the company sits back and watches the carnage while counting the 66 ⅔% of unpaid money the distributor base spilled their blood, sweat, and tears to earn.

What's my advice?

Unless you’re into astrophysics or rocket science you should find a company with a compensation plan that pays you for all the hard work you do.

I appreciate you,

Bill Tessore