Crossline
Crossline refers to the relationship between two or more distributors who work for the same company, but whose efforts do not influence one another’s commissions as they are not part of each others organisation. For example, all distributors on the same level would be cross line from one another.
Legs
Every frontline or first level distributor that you sponsor into your organisation forms a new leg. For example, in the diagram below there are 3 frontline distributors and therefore 3 legs (2 outside legs and a middle leg). If it was a 4 x 6 plan there would be 4 legs (2 outside legs and two middle legs). In some plans where there are a large number of frontline distributors these legs are often numbered from left to right 1st leg, 2nd leg, 3rd leg,…etc.
Another way to look at the legs of your business is that each leg represents a new organisation that is owned and operated by your frontline distributors. By helping your frontline distributors build their “organisation”, this helps you to build one of your legs and therefore can help strengthen your organisation.
Point Value
Regardless of what kind of industry you work in, the main goal of that industry is to sell a product or service. The network marketing industry is no different. For every product sold in network marketing, a predetermined amount of the profit is paid to the team of distributors who were responsible for the sale.
Given that there are a number of network marketing companies that operate in a number of different countries around the world the easiest and most fair way to pay distributors commission is to use a point system. Each product has an assigned point value and your commission is determined by the volume of points that flow through your organisation. This way it doesn’t matter where you operate your business from (e.g. America, Australia, Japan etc.) you are entitled to the same commission as your fellow colleagues on the other side of the world.
It is important to understand that although higher priced products normally offer a higher point value as a reward, this is not always the case. The other advantage of the point system is that because different products have different point values, if a company is trying to promote a particular product, they can allocate it with a higher point value as an incentive for distributors to sell that particular product. The table below summarises an example of point values.
Calculating Point Volumes and Commissions
The commission you earn in a network marketing business is directly related to the total volume of points that flows through your organisation. Therefore your goal is to build your business so that you have a greater volume of points flowing through your organisation, thereby earning a higher commission cheque.
Each compensation plan structure calculates total volume in a slightly different way, however they normally take into account some, maybe all of the following volumes:
This is where compensation plans begin to confuse people looking at the business for the first time. In particular, the Stair-Step Breakaway, UniLevel and the Forced Matrix Plans normally offer a variable commission rate for each level of distributors within your organisation. For example, in the diagram below the left hand side demonstrates how the commission rate might vary on points accumulated on each level.
In the above example, if you were to have the variable commission rate you would receive 10% commission based on the first level volume, 15% commission based on the second level volume and another 5% commission based on volume in the third level.
Alternatively, if the compensation plan offers a consistent commission rate (featured on the right) then you would earn the same commission percentage for each level. For example, in the above diagram you would earn a 10% commission from all 3 levels. One of the main advantages of the Binary System is that it normally uses a consistent commission rate, making it easier for people to understand.
Rank Advancements
As discussed previously, when you first join a network marketing business you become either a distributor or an associate depending on the company. As your organisation grows and you reach a certain level of volume flowing through your organisation (or a certain number of levels deep), the company allows you to rank advance - meaning that you gain a new title and earn recognition from your peers.
To highlight the kind of rank advances that distributors might achieve we have listed below some of the rank achievements that are commonly known across the industry. Although you may start out as a distributor, as your organisation grows you may become a Director or potentially a Diamond Director.
Common rank advancements include:
Crossline refers to the relationship between two or more distributors who work for the same company, but whose efforts do not influence one another’s commissions as they are not part of each others organisation. For example, all distributors on the same level would be cross line from one another.
Legs
Every frontline or first level distributor that you sponsor into your organisation forms a new leg. For example, in the diagram below there are 3 frontline distributors and therefore 3 legs (2 outside legs and a middle leg). If it was a 4 x 6 plan there would be 4 legs (2 outside legs and two middle legs). In some plans where there are a large number of frontline distributors these legs are often numbered from left to right 1st leg, 2nd leg, 3rd leg,…etc.
Point Value
Regardless of what kind of industry you work in, the main goal of that industry is to sell a product or service. The network marketing industry is no different. For every product sold in network marketing, a predetermined amount of the profit is paid to the team of distributors who were responsible for the sale.
Given that there are a number of network marketing companies that operate in a number of different countries around the world the easiest and most fair way to pay distributors commission is to use a point system. Each product has an assigned point value and your commission is determined by the volume of points that flow through your organisation. This way it doesn’t matter where you operate your business from (e.g. America, Australia, Japan etc.) you are entitled to the same commission as your fellow colleagues on the other side of the world.
It is important to understand that although higher priced products normally offer a higher point value as a reward, this is not always the case. The other advantage of the point system is that because different products have different point values, if a company is trying to promote a particular product, they can allocate it with a higher point value as an incentive for distributors to sell that particular product. The table below summarises an example of point values.
Product | Price | Point valve |
| X | $20.00 | 15 |
| Y | $10.00 | 10 |
| Z | $25.00 | 16 |
The commission you earn in a network marketing business is directly related to the total volume of points that flows through your organisation. Therefore your goal is to build your business so that you have a greater volume of points flowing through your organisation, thereby earning a higher commission cheque.
Each compensation plan structure calculates total volume in a slightly different way, however they normally take into account some, maybe all of the following volumes:
- Level volume - the amount of points each level of your business has accumulated in that pay period.
- Leg volume – the amount of points each leg of your business has accumulated in that pay period.
- Group volume - the amount of points that has accumulated through your entire organisation in that pay period.
- Carry over volume – the amount of points not paid a commission in your last pay period that are then carried over and entitled to earn a commission in your next pay period. Carry over volume basically allows any unpaid points to carry over to the following pay period so that you don’t lose any commission.
This is where compensation plans begin to confuse people looking at the business for the first time. In particular, the Stair-Step Breakaway, UniLevel and the Forced Matrix Plans normally offer a variable commission rate for each level of distributors within your organisation. For example, in the diagram below the left hand side demonstrates how the commission rate might vary on points accumulated on each level.
Alternatively, if the compensation plan offers a consistent commission rate (featured on the right) then you would earn the same commission percentage for each level. For example, in the above diagram you would earn a 10% commission from all 3 levels. One of the main advantages of the Binary System is that it normally uses a consistent commission rate, making it easier for people to understand.
Rank Advancements
As discussed previously, when you first join a network marketing business you become either a distributor or an associate depending on the company. As your organisation grows and you reach a certain level of volume flowing through your organisation (or a certain number of levels deep), the company allows you to rank advance - meaning that you gain a new title and earn recognition from your peers.
To highlight the kind of rank advances that distributors might achieve we have listed below some of the rank achievements that are commonly known across the industry. Although you may start out as a distributor, as your organisation grows you may become a Director or potentially a Diamond Director.
Common rank advancements include:
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