Compensation Article Analysis
The article "Evaluating a Sales Compensation Plan", by Sally Wiltshire, The author, describes some of the compensation plans that a salesperson has to deal with and what they need to consider before accepting a position in a company.
The author describes that the "stair-step/breakaway" compensation plan is without question the most common of all compensation plans. It is also responsible for most of the really big money being made in the sales industry. However, the big money is being earned by a small percentage of those salespeople involved in breakaway opportunities. What sets the breakaway apart from most other plans is that they are definitely geared to a full-time effort. As a result, attrition is higher with breakaways as well as the expense involved in working and building a sales base with them.
This plan generally has 3 or 4 increasing rank positions that can be achieved by meeting progressively higher sales volume requirements over a specified period of time.
All the salespeople under you are considered part of your personal group and their personal sales volume combines with yours to help you to move to these progressively higher rank positions at which point you will "breakaway." Basically, you earn higher commissions on the lower rank distributors under you (in your personal group) and this commission will decrease as they too move up the stair-steps to the breakaway side.
When you do breakaway, you become your own "organization." In other words, you are no longer part of your up line's group. Your down line group comes with you as well as their sales volume which combined is called "group volume." With most breakaways there is a set/defined personal group volume that has to be met each month in order to qualify for commissions on other breakaways. There...