MLM Blog – Network Marketing Blog

Arbonne Emerges From Chapter 11 Bankruptcy

Posted on 08. Mar, 2010 by Ty Tribble.

I just unleashed 7 of my most closely guarded Internet Marketing files for the first time. Download Ty Tribble's MLM Web Secrets. It's my free gift to you for visiting.

Arbonne has emerged from Chapter 11 Bankrupcy...

Under the deal, lenders owed about $530 million took control of 85 percent of the stock in the reorganized company.

The case is In re Natural Products Group LLC, U.S. Bankruptcy Court, District of Delaware, No. 10-10239.

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Welcome To The MLM Blog

Posted on 31. Jan, 2010 by Dan Mitchell.

The MLM Blog has been posting news and information about the Network Marketing industry since 2003.

MLM Blog Author Ty Tribble is an Internet entrepreneur and Work At Home Dad who lives in Federal Way, Washington with his wife, Richelle and two children, Emma and Tyler. Ty has been featured in Entrepreneur and Success From Home magazine and is considered by many as the # 1 blogger in the world on the subject of Network Marketing. Ty has created tens of thousands leads on the Internet by using blogging, social media and web 2.0 and loves to train others to match his online success.

Want to participate in the conversation? Head over the MLM Forum at MLM Blog.

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Network Marketing Compensation Plans Part 1: The Stair-step Breakaway

Posted on 18. Jan, 2010 by Ty Tribble.

Stair-step Breakaway Plan

Company examples: Amway, Arbonne, Nuskin, Avon, Pre-paid Legal, Herbalife.

History and definitions:

The stair-step breakaway is the oldest of the compensation plans and was created by Amway in the 50's. Most early Network Marketing companies copied the plan and based on the fact that these companies have been around for a very long time, the largest companies in the industry typically have a stair-step breakaway plan.

The stair-step breakaway allows for an unlimited number of people to be personally enrolled on your front line and pays in a volume based stair-step manner. For example if you enroll 3 people who do $100 of volume, those 3 people might qualify for a 3% bonus on the the $100, where you would have a total of $300 on your team, you would qualify for 6%. The company would pay you the difference between 6% and 3%. This % "stair-steps" up so as your volume grows your % gets higher and you make a larger % difference.

The breakaway part of the plan is that when a person gets to a certain level, they will "break away" from you, causing you to earn less money on the volume that person creates.

Commentary: Problems with the breakaway plan are numerous. Most of the time the issue starts with the company and what % they pay back to the distributors. Amway has averaged a payout of roughly 30% back to it's distributors which is about 40 to 50% less than the fastest growing companies in the industry today which pay 40 to 45%. In other words to get paid the same in Amway vs. many other companies today, you would have to create 150% more volume.

The other major issue with the breakaway plan is the actual breakaway. You could put your blood, sweat, tears, hundreds of hours and money into one of your teams and then if they match your level ( in other words you help them succeed), your income will drop significantly once they "breakaway".

Stair-step breakaway plans are also back end weighted but it usually takes some additional maneuvering to make a large income. You will hear about tools and training system income, distributor pools where distributors have multiple positions and share the revenues and other shenanigans that offer the appearance of large incomes even though the largest producers are making a fraction of what they portray.

The Bottom Line: Stair-step Breakaway plans are like a used car:  Folks can get attached to them but new cars outperform them in every category. The fundamentals of this plan were developed in the 1950's and there is a reason why you rarely see a new company using a breakaway.

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