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 - The Beloved Aussie Two-Up

In MLM Comp Plans - The Stair Step Love Affair we saw what MLM companies find so attractive about the stair step breakaway compensation plan. Now let's see why some network marketing companies wish they could all be Aussie Two-Ups.

How an Aussie Two-Up works.

Let's say Bob is building his team with this comp plan and he recruits Sue. Sue's first two recruits go directly to Bob along with the commissions earned by Sue's sponsoring efforts. From there on Sue can start to earn a check and fill her own downline group in the same way.

So why are companies wall-eyed over the Aussie Two-Up?

The Big Ticket
Generally there is only one product or service with an extremely bloated price tag. (ex.: a marketing course sold for $2,000, and the company keeps half of that)

One-Time Sales
There's no pesky residual income to pay out.

Companies using an Aussie comp plan lure prospects in with large sales commissions, but they usually offer only one very high ticket, one-time purchase product. And since few people recruit more than 2.7 team members in their network marketing career it's easy to get upside down trying to work with this type of comp plan.

Do you live to recruit? No worries mate. Go beat the bush and have fun!

But if the Aussie Two-Up comp plan is too Out Back for you, then look for a company with a comp plan that won't kick you in the face and expect you to come back for more.

I appreciate you,

Bill Tessore

MLM Comp Plans - Uni-Level Breakage

In "MLM Comp Plans - Why Companies Love Uni-Levels" I revealed why companies find uni-level compensation plans so attractive. Now let's move on to the breakage in a uni-level compensation plan.

Basic uni-levels have two forms of breakage.

• Limited depth.
• Product price.

Here's how limited depth creates breakage.

Let’s say you’re in a company with a 3-deep Uni-Level pay plan. You sponsor Betty, Betty sponsors Jim, Jim sponsors Darla, and Darla sponsors George. In this case you get nothing for Darla's sponsoring efforts because breakage occurs with George (on level 4).

How about the price related breakage?

Most of the products marketed through a uni-level are either intellectuals (e-books), or some other one-time purchase item with little to no cost to the company offering them. These products offer the company a gigantic profit margin. Let's take a closer look at what this means.

Most MLM companies claim they need to maintain between a 55% to 65% profit margin to pay the bills and pay commissions. But is that really necessary? Take a look at the chart below for a $20 product to see where the money goes.

Your	% to	% to	Your	Co.
Team	You	Co.	Profit	Profit
Betty	20%	80%	$4	$16
Joe	10%	90%	$2	$18
Darla	5%	95%	$1	$19
Fred	0%	100%	$0	$20
Totals	8.75%	91.25%	$7	$80

As you can see from the example above the company is making an average of 91.25% profit from your team efforts compared to your 8.75%. Wow, they must have a lot of overhead! Oh, and check out how much the company values your contribution.

Network marketing companies like Uni-Level comp plans because they’re easy to explain and they're highly profitable (to the company). Plus there are plenty of folks out there who think they are in that 0.01% of MLMers that can recruit at will to keep making money.

Most networkers are in MLM to build a large, stable, and profitable income so they can retire. If you’re a super sales person or a sponsor monster that probably doesn't matter to you. You’ll do well with a Uni-Level, because you’ll just go wide.

However, if maintaining communication with your team and building depth for strength of long-term stability are important to you, then a uni-level plan will be the kiss of death to your financial independence.

Your dreams should not be limited by your company's comp plan. So look for a company that rewards well for building enough width to be able to keep up with your front line, while building maximum depth for team strength.

I appreciate you,

Bill Tessore

In "MLM Comp Plans - Why Companies Love Uni-Levels" I revealed why companies find uni-level compensation plans so attractive. Now let's move on to the breakage in a uni-level compensation plan.

Basic uni-levels have two forms of breakage.

• Limited depth.


• Product price.

Here's how limited depth creates breakage.

Let’s say you’re in a company with a 3-deep Uni-Level pay plan. You sponsor Betty, Betty sponsors Jim, Jim sponsors Darla, and Darla sponsors George. In this case you get nothing for Darla's sponsoring efforts because breakage occurs with George (on level 4).

How about the price related breakage?

Most of the products marketed through a uni-level are either intellectuals (e-books), or some other one-time purchase item with little to no cost to the company offering them. These products offer the company a gigantic profit margin. Let's take a closer look at what this means.

Most MLM companies claim they need to maintain between a 55% to 65% profit margin to pay the bills and pay commissions. But is that really necessary? Take a look at the chart below for a $20 product to see where the money goes.

==========================

Your % to % to Your Co.

Team You Co. Profit Profit

------------------------------------

Betty 20% 80% $4 $16

Joe 10% 90% $2 $18

Darla 5% 95% $1 $19

Fred 0% 100% $0 $20

------------------------------------

Totals avg. avg. $7 $80

7.75% 91.25%

============================

As you can see from the example above the company is making an average of 91.25% profit from your team efforts compared to your 8.75%. Wow, they must have a lot of overhead! Oh, and check out how much the company values your contribution.

Network marketing companies like Uni-Level comp plans because they’re easy to explain and they're highly profitable .. to the company. Plus there are plenty of folks out there who think they are in that 0.01% of MLMers that can recruit at will to keep making money.

Most networkers are in MLM to build a large, stable, and profitable income so they can retire. If you’re a super sales person or a sponsor monster that probably doesn't matter to you. You’ll do well with a Uni-Level, because you’ll just go wide.

However, if maintaining communication with your team and building depth for strength of long-term stability are important to you, then a uni-level plan will be the kiss of death to your

financial independence.

Your dreams should not be limited by your company's comp plan. So look for a company that rewards well for building enough width to be able to keep up with your front line, while building maximum depth for team strength.

Bill Tessore