The Beauty of the Compensation Plan!
Most people understand how traditional compensation works: you’re either paid an hourly wage for number of hours worked,or you’re paid an annual salary. In some sales positions you’re paid a base rate, and then a percentage commission on sales. Yet understanding a direct sales compensation plan can be more difficult to comprehend, at least initially.
Many party plan and direct sales companies have a compensation plan based on the consultant’s personal sales (personal volume) and a percentage of downline or team sales (team volume). Because it is a different structure than what most are familiar with, the lack of understanding how the pay plan works can lead to disappointment and failure to reach full earning potential.
The easiest way to think of a direct sales compensation plan is that a party plan consultant’s pay is derived from personal sales and from royalties or residuals paid on downline member sales. The “and” is very important. Too many think of the downline bonus as extra. Rather it’s essential to think of it as two parts make a whole.
Because some direct sellers still haven’t grasped this concept, consultants are satisfied accepting only half of their compensation. In a traditional compensation, an employee would be mad if she only received half a check, but there is still a large group of consultants and distributors who are content with only half.
Sure you can earn extra income in direct sales with just one check from the commissions on your own sales; many do that and are okay just earning a little extra. Although if you’d like to earn a full time income it will require a paradigm shift that you want and need both checks. If you just earn on your own personal sales, you’re only getting half a pay check.
Periodically we hear downline team members complain that the upline is “getting paid off of me (downline)”. This is true; but it shouldn’t be a topic of negativity. It’s almost as ridiculous as saying that a plumber gets paid for fixing toilets. It’s merely how the compensation works.
To their defense, consultants who make derogatory comments about their upline’s pay often lack a clear understanding of how their own compensation is derived. They’re not alone. Those who are new to party plans will need training, patience and repetition to help learn this new pay plan.
Only you know your financial goals. You can earn half a check or a whole check in direct sales. If half is sufficient, then it’s all good. If you’re striving for a more sizable income, then hopefully you’re ready for a paradigm shift and you’re able to see the direct sales party plan pay plan as two parts that make a whole.