This is an important question to get the answer to… and most network marketers don’t even have a clue which one their company is built on. This plays a big role in determining if your company can fulfill on the promise of creating lifelong residual income.
The information that we are about to discuss today, most network marketers aren’t even aware of. The reason being is most of them have never advanced through a companies compensation plan far enough to figure this out. If you have, then you’ll know exactly what we’re talking about here from experience.
Let’s get started…
Imagine for a moment that you were a Real Estate Broker, with an office that has a handful of agents. One of your agents is a real player… an agent that is really making things happen. This agent accounts for about 40% of your sales volume.
Over the time that this agent has been with you, you’ve poured your heart and soul into developing them into a great agent… providing them with all the support and training that they need.
One day this agent comes to you and tells you that they’re leaving to open their own office. The moment they leave you realize that 40% of your sales volume just went out the door too… and now you have to go out and replace that volume.
So how does this pertain to Network Marketing?
Are you familiar with what a ‘breakaway’ is? Most network marketers are not. Maybe they’ve heard the term, but most don’t even know what this term means. Ready for the scary part? Most network marketing companies have them built into their compensation plans!
This structure is in most of the companies out there, and is implemented by almost all the new companies that come to market. There are many negatives to a compensation plan that has a breakaway built in… we’ll discuss these negatives in detail within this post and the video below.
Video Goes Here
I wanted to clarify what a breakaway is a bit more, so read the info below…
So what is a breakaway?
A breakaway is when a person reaches a certain volume level, they ‘breakaway’ from their upline’s organization. When this happens, the upline basically loses all of that volume… and they no longer get paid on that volume at the same rate as they previously were. The upline loses a big chunk of their business that they’ve worked so hard to build.
The commission that the upline is now paid on the volume that has broken away is a small fraction compared to what they were being paid on that volume previous to the breakaway.
Are you getting this? This basically is like the story we told above where the agent ‘breaks away’ from the Real Estate Broker. When this happens the upline now needs to go out andreplace that volume!
If a company has a breakaway built into it’s compensation plan, the company is built on a fear of loss… not a sense of gain. They’re penalizing people for developing leadership… instead of rewarding them!
Why would a company have a breakaway?
After being educated on what a breakaway is, you might be asking yourself ‘why in the world would a company have it built into their comp plan?’. They feel it keeps the distributors feet to the fire… it keeps them working, forever!
They think that if someone loses a big piece of their volume, they’ll have to stay working to replace that volume. To me that would piss me off… not motivate me to go to work!
Setbacks of breakaway compensation plans…
- Loss of Volume – As we explained above, when someone breaks away from their upline, their upline loses that volume. Their getting paid a fraction of what they were getting paid on that volume and they lose that volume within their overall organizational volume.
- Lack of Support – As someone advances to the point where they can potentially breakaway, they might experience a lack of support from their upline. Their upline doesn’t want them to advance anymore because it will put a huge dent in their business if that person breaks away from them… leaving them to replace it.
- False Volume Purchases – What started to happen because of the breakaway concept is people started to buy extra product above and beyond their minimum monthly auto-ship. This is ‘false volume’ because it’s not volume that is being consumed by customers. Most of the time this is volume that people get stuck with, that sits in their basement or their garage. This has lead to a lot of financial trouble for a lot of people, which is the main reason the industry had received a bad name. Not all companies can people buy ‘false volume’, but there still are a lot of companies out there where you can… and people are still doing it today!
Now that you know what a breakaway is… would you join a company that has one built into it’s compensation plan? If you answered ‘no’ to that question… an even more important question than that is ‘does the company that you are currently in have a breakaway?’
When analyzing a company to join, a breakaway should be a big fat no-no! The reason being is the majority of the people that will join you in business CAN NOT play the replacement game! This is big reason why network marketers fail in the industry in the masses!
No breakaways is one of the “12 Success Factors“. This is the checklist that was put together by top industry leaders to determine if a company can fulfill on the promise of creating lifelong residual income.
Finding Out If Your Company Has A Breakaway Plan…
If you ask your upline if your company has a breakaway plan, most of them won’t even know… and if they do, they might not be open to sharing it with you. When we were looking for a company to call home, we researched the majority of the companies out there… so we’ll be able to tell you if you’re company has a breakaway built into the plan. We knew we didn’t want to join a company that had a breakaway because it couldn’t fulfill on the promise of creating lifelong residual income if it did.
Give us a call at 646-801-1120 to talk… we’re always up to chatting.
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Yours In Success,
Written by Jason Fisher & Eric Goldstein of TimeandFreedom.com.