The total profit of the company is usually divided by three which is The Overhead Operation including Products and Services, The Owners Shares, and the Compensation given to the distributors.
The operations and the products must maintain its profits to make sure the quality and to increase productions and campaign. It must be greater that the income of the owner and compensations. Preferably it is 40% of the pie.
The Owners share is the income goes to the incorporator or the sole owner of the company. The owner can get much higher percentage among the two but it much better if it is lesser with the operation overhead. Preferably it is 30% of the pie.
The third part of the pie is 30% where is the source of income to create a marketing plan or compensation plan for the distributors.
In third part of the pie which is the distributor compensations are often battles with the other compensation plan. In this case distributor become out of focus finding the right company for them to start their business.
No matter how good the marketing plan, it is always design to be on that 30% percentage part and no matter how high you achieved your position in compensation plan your income will always be a percentage of that part.
Types of Compensation Plan
The Ladder Steps – it is the long lasting and ever since existing compensation plan for MLM
The Matrix – Is where you find members to fill in your structure.
The Binaries – You have to balanced two legs to make money.
The Hybrid Combinations of Compensation Plan – it is always experimental as of the moment.
These compensations create 20% of achievers and 80% of distributors struggling to make it on top, but no matter they struggle it is remain on the 80/20 rule and only the numbers population grows. It is design that way. It’s already happens on Eddy Chai experience doing network marketing over 28 years.
The 20% of the distributors are the achievers who get all the rewards from doing the business and the rest of the distributors are still lack of resources of doing the business, they are the many that is not compensated well in the business and often time look for immediate income to sustain the business. What happen when business is hard for them? They will quit and suddenly your production will start to drop down and your income will get affected too. This happens that you will always build and build and build your network again and again. The companies close or change the marketing plan as soon as the 20% of the achievers quit too.
Not all of the compensation always leads to this way, but the compensation plan implementing ladder type still exist for the past 15 years. Try to look for the company running over 15years and you will found out that these companies are using the ladder type of compensation plan. Because it’s always gives the maximum of its share to the distributor percentage.
With Eddy Chai 28 years of network marketing experience, he change the usual way of dividing the total profit of the company like he did in his founded Diamond Lifestyle Corporations for the distributors by sharing or combining the percentage of the owners profit to percentage of income making the total of 60% sixty percent. He designs Diamond Lifestyle Corporation to give the profit back to distributors creating so much money for the distributors.
While some other company can do it by sacrificing the products quality and services making them last no longer. It is so much different compare to what Eddy Chai intention to help everyone to become successful in MLM industry.
What amazing compensation plan can be written in this figure? It is not from the 30% of usual Income you can earn in joining MLM companies, but joining Diamond Lifestyle Corporations can give the share 60% for the distributors’ compensation.