Network marketing

ShopFreeMart Compensation Plan

by John Austin

Most network marketers are practicing business without education. Even a lot of company owners come from the ranks of distributors and really don't understand the mechanics of compensation plans.

The point I am trying to drive home is that if company owners did things right and if people had an education in network marketing so they could avoid those companies that don't, there would seldom be a reason for failure.

Once you understand a few salient truths about compensation plans, you can easily and quickly know that most opportunies that come along are not even worth a second glance unless you are a jack rabbit that enjoys jumping from opportunity to opportunity.

Education does not necessarily make you smart and neither does old age. A teacher can only teach what they have been taught about any given subject. I believe that God gave me a talent for understanding and explaining network marketing in ways that I have never heard explained by anyone else, so what you will see in these pages may be entirely new to you.

Due to my curious nature and desire to understand why things work and do not work, my 53 years in the industry has given me more than a PHD education in network marketing, including why compenstation plans work or don't work.

This short treatise will give you a better understanding of compensation plans than most company have. Why is this important? Because compensation is one of the Five Pillars that determines the success and longevity of any company.

The six most common failures in compensation plans are:

1. The Fast Start Bonus

2. The Binary Compensation Plan

3. The Matrix Compensation Plan

4. Many difficult rank advancements

5. Group volume requirements

6. Any things that team members other than yourself must do toward your own rank advancement.

The Fast Start Bonus was a late-comer to the industry. It did not always exist, but once it got introduced, it stuck around like a sore thumb, mostly because it sounds good. Everyone wants a "fast start" toward success, but in reality, the fast start bonus has been one of the greatest contributors to failure in the industry.

The theory behind the fast start bonus is that by giving 100% of the commission to the sponsor on his or her first sale will motivated them to make a lot more sales. Although it sounds good, it really only works that way for "sales" people.

The Fast Start Bonus typically pays only one person (direct sales commission) which defeats the entire purpose of multi-level marketing or paying several people for each sale.

Let's say that you enroll 5 new people your first month and you receive 100% of the commission paid on those sales. Nobody but you gets paid and if for some reason you don't enroll anyone your second month, your income will be $0.00 because even if the people you personally enrolled are duplicating, they are getting 100% of the commissions from the sales they make.

Let's assume that the people you enrolled purchase products again their second month; you would then earn a small commission, but you probably won't receive the commission until your third month and typically things don't get much better until you are 6-7 months into your business.

The typical Fast Start Bonus is causing you and everyone in your group to struggle financially. Statistically, 95% of the people who join any company end up dropping out, so even if you are one of the die-hards that stick around, you are fighting a never-ending battle of replacing people faster than they are dropping out.

The ShopFreeMart Infinity Profit Sharing Plan pays 80% of the Commissionable Money from each sale of products and divides that money between 5 different pay ranks.

Your First Sale

Your first sale will pay you 10% and give you a rank advancement to Diamond Member along with a 10% pay raise. 70% will be paid at the same time to other ranking members.

Your Second Sale

At Diamond rank you are now qualified to receive 10% override (Diamond Bonus) on the first sale of any new members that you refer to ShopFreemart. Your second sale also advances you to Double Diamond Member, which gives you another 10% pay raise.

Your Third Sale

At Double Diamond rank, you are now qualified to receive 10% override (Double Diamond Bonus) sales made by downline Diamond Members and 20% override on the first sale made by new members. At Double Diamond you will earn ongoing 30% on all purchases made by your third purchasing money. Your third sale also advances you to Triple Diamond Member, which gives you another 10% pay raise.

Sales 4-9

At Triple Diamond rank, you are now qualified to receive 10% override (Triple Diamond Bonus) on all sales made by downline Double Diamond Members and 20% override on sales made by Diamond Members and 30% override on sales made by downline members. At Triple Diamond your next six sales will now pay you 40% and sale number nine will also advance you to Ambassador Member, which gives you another 25% pay raise.

Sales 10-Infinity

At Ambassador rank, all new personal sales will pay you 65%, plus you are now qualified to receive 55% override (Ambassador Bonus on the first sale of all your new members and 45% on sales made by downline Diamond Members and 35% on sales made by downline Double Diamond Members and 25% on sales made by downline Triple Diamond Members.