MORE PYRAMID PONZI SURF SCAMS

14 Feb 2006 – They are the darling of the online scamsters right now with an estimate of over 20 operating. They offer 10-12% return a day for clicking on web links. The money part is impossible making it illegal and on top of that stupid. The FBI is investigating 12 Daily Pro and others. See details and great article on the MLM Watch Dog http://www.mlmwatchdog.com/

The MLM Watch Dog and it's parent company Insights Publishing are supported in part by AMC, America's MLM Consultants at http://www.mlmconsultant.com/

Today What Is The Best
Party Plan Compensation Pay Plan?
Rod Cook Bsc., M.A., M.B.A.

There are basically now four Major Types of MLM Party Plan Pay Plans, they are the antique Stair Step Breakaway, the Group Breakaway, the group Unilevel and modified Unilevels. All have been successful but the older ones are losing ground.

Examples of elder Network Marketing - MLM Party Plans such as Mary K, Tupperware and Stanley Home Products are “Party Plans” based on the old type of “Stairstep Breakaway” compensation plan. The “Stairstep Breakaway” compensation plans basically allow a Party Plan Representative to start out making a small retail profit. The more sales volume they generate each month the cost of their products drop so they make a larger retail profit. The difference used to be given in rebate checks but today most companies just drop the “wholesale” price of products. Why? Because it caused double taxation on the Representatives since the IRS considers rebates income. The rebate isn’t as dead as the Dodo Bird but pretty close to it!

The newer plans have gone with a straight group volume requirement to collect wholesale in a single swoop. By that we mean if the new Representative buys a builder kit largely made up of products to be sold, they can buy at wholesale right away. This is much more positive and less time consuming and has worked great for Party Plan companies like Pampered Chief, Southern Living and Starlight Candles.

The recruiter that brought in the new representative gets a bonus or override on the sale of products by the newbie until they buy at full wholesale. If they buy a package of products say at $500 the recruiter gets a commission on the products in that package. This is a “group” volume on the front end. Now the group is a group of products in an initial sales package that it is legal to pay commissions on.

Now comes the Love – hate relationship of the Breakaway part of Party Plan. If a Representative becomes an Executive and signs up a person under them they usually get a level bonus of about 4% (on that person and all the new persons that come in). They also get a group bonus of say 10% on every body that is below them. However when someone in the group gets to be the same rank as the Executive? Ouch! They get blocked from collecting the 10% group volume Bonus pay. That is when MLM Party Plan owners start to get grey hair with either the Breakaway or Generational (another name for the same thing). Representatives can’t be double paid thru hundreds of levels of the pay plan or they MLM Party Plan Company goes broke! Top Representatives spend time and energy harassing the MLM Party Plan Management to give them another level of Bonus Overrides on their downlines. Once the company is maxed out on the amount they can pay?

The solution? The newer companies with faster growth have gone to using a modified Unilevel. It sure makes life easier than listening to top distributors moan and cry about being blocked. See the section on modified Unilevels.

The next problem is that pure MLM companies are able to pay more downline levels and look far more lucrative. Why is that? A Party Plan needs a high wholesale to retail split. There are few survivors in the Party Plan arena that pay less than 30% the competitive ones pay 40% on the difference between wholesale (what the Rep pays for product) and retail (what a customer pays for product). This means that a Party Plan is not able to put as much money into deeper MLM downline pay levels so appears to be less competitive than a pure MLM Company.
Why does a Party Plan MLM have to have a higher wholesale to retail margin? That is because the Representative has to do a lot more work and driving around than most pure MLMs. The Representative has to help the hostess get out invitations to the party, lug samples to the party; in some cases sales merchandise to the party, talk at the party, and recruit at the home party. Plus (in general) the Representative has to provide (pay for) an incentive gift to the person giving the home party. These “Free Gifts” are one of the major drivers in soliciting hostesses to have the first and also continuing home parties. Having done 100’s of home parties I can swear to you that I do not know a home party company that I think has too high of a retail margin. Home parties are work and a cost for representatives.

A critical area is for new MLM Party Plan Companies is to have easy to use Internet Computer order entry systems so Representatives can enter home party sales quickly and easily. The company ships the product to the end Customer. This is a golden cash cow for the MLM Party Plan Company! Why? The Direct Sales Association (DSA) indicates an 80% annual turnover of Representatives in some home party companies. An MLM – Network Marketing Party Plan Company should do it’s best for retention of Representatives which we specialize in (see below). Still some Representatives will leave. What happens then? You retain the Customer’s name if the Representative leaves!

A current tool for domination in the Home Party Plan arena is Rod Cook’s patent pending re-entry certificates for the Unilevel that Representatives love. This allows them to build a deep downline compared to most shallow MLM Party Plan pay plans that are on the market. The beauty of this patent pending Unilevel modification is that the pay plan does not pay out one cent more from the Company’s cash flow.

This article is by Rod Cook a Senior Certified Consultant in the MLM Industry and a compensation plan expert. He is the Senior Consultant at America’s MLM Consultants http://www.mlmconsultant.com. He also serves the MLM Industry as the MLM WatchDog to help product our good industry that has helped so many little folks find their way to riches. You can keep up on the Network Marketing – MLM Industry news at http://www.mlmwatchdog.com. If you wish to contact him see either website or Google him!