Bottom Line - Sales Drive the Checks

How to make money in direct sales? Personal selling, team building? Wide? Deep? Wholesale? Retail?

Every direct sales company out there has a different compensation plan. Most of these plans are a combination of commission structure on personal sales, a bonus or override structure on team sales, and other components such as milestone or rank bonuses tied to pools of some sort. Some pay on retail, others wholesale. It’s all over the place.

It can be VERY confusing, particularly if you’ve never been in the business before.

Here are some very basic pieces of information for you to make sure you understand about your comp plan, and also a few thoughts on the best way to go.

Organizational Structure

Should you be wide or deep and what the heck does that mean anyway?

As a GENERAL RULE, go WIDE first, worry about deep later.

If your organization is wide, that means you have a wide line of team members BESIDE each other RIGHT UNDER you. You might be a prolific personal sponsor, or these people may have rolled up to you from someone you sponsored who left the company. Although many comp plans count someone who rolled up as being on your frontline, others specifically require you to have personally sponsored consultants on your frontline to satisfy rank requirements. Be sure you know what your plan requires to promote.

Why wide? You likely have a requirement of some sort that a certain number of your FRONT LINE (immediately under you) sell a certain amount of volume on a monthly, or quarterly basis. In addition, the wider you are, the wider the total organization will be underneath you. This usually helps your overall compensation. Which brings us to depth.

On the depth side, also as a general rule, the farther people are from you, the less money you will be paid on their production. This may be because there are low level promotes between you, or because your comp plan only pays so many levels deep. If your company pays four levels, you just don’t get paid on people below that, regardless of their status. (If there is a comp plan out there that building wide first hurts you more than building deep first, rest assured it’s very unusual.)

So, it’s simple math. The more people you have on your frontline, the better the chances you don't have to sweat every single sales period that enough of them will do what you need. I feel very strongly that it is NOT your team member’s responsibility to maintain YOUR rank. So, I hope you never pressure your team for results. Build wide enough, and you won’t have to worry. Build wide and you’re likely to have more people in your pay range too.

Bottom line, know your plan and work it.

Which brings me to the next component you need to grasp. What is your company’s policy on "recapture?"

Recapture

Most companies have a rank promotion structure that requires someone to promote with a combination of team sales volume, and so many frontline consultants who are "active" or participating at a certain level. What happens if you don’t recruit all that much, but you wind up sponsoring a superstar?

In most every comp plan, you’re going to be penalized. That’s just the way it is. Eventually, that person is going to build their personal and team sales and structure enough to promote. If you aren’t ready to promote as well, they are going to go around or "break away" from you. Or worse, you go ahead and promote, then can’t hold the new rank when you can’t count their volume anymore. This is what I mean by "penalized." I understand why it happens – the company doesn’t want consultants who aren’t particularly active and working the business regularly to be able to move up in rank just because they sponsored someone terrific.

The question is, can you "recapture" that person and their organization, when and if you ever manage to promote to the level where they would have stayed under you? Unfortunately, in many companies the answer is "no."

BRAVO to companies that provide recapture! I have long thought that punishing someone permanently for recruiting a superstar was a terrible message to send. If you recruit someone great and they pass you, you ought to benefit from being the one who "brung ‘em" to the dance if you work your way up to their level.

Either way, know your plan and work it.

But, please remember one thing that applies regardless of width, depth, or recapture:
Sales drive the checks.

The team will do what you do. If you sell, they’ll sell. If you sell and recruit, they’ll sell and recruit. If you just sell to minimums and recruit, you can expect a large portion of your team to do the same. If you want to earn more, sell more. When the team follows, your checks will too.

Bottom line, you are PAID on your team SALES, not your team SIZE.

SALES…the Life of the Party Plan.

Kimberly Bates, the Better Seller Coach
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