The Truth About Stairstep Breakaway Plans

By: John Counsel

A lot of people in network marketing shy away from any kind of Breakaway Plan because "you lose your best down-line legs that way."

Uh-uh. That's just fear of loss feeding on ignorance.

Remember the Law of Success?

"Do ONLY the right things, for ONLY the right reasons."

Fear of loss is the worst possible reason to do ANYTHING in life. Even if you do the right thing, by doing it for the wrong reasons means you CAN'T succeed, despite any short-term ILLUSION of success. You'll fail when those chickens finally come home to roost.

The fear that you'll lose your downline in a stairstep breakaway plan is no more valid than in any other type of plan, for one simple reason...

EVERY plan is a breakaway in one form or another, even those who promote themselves as "you never lose your downline!"

It's NOT about losing your downline. It's about losing YOUR BONUS INCOME!

If you keep your downline, but lose your income, what's the difference?

Because bonuses are paid out of the wholesale price the company receives for the products it sells, there will ALWAYS be a limit to how much it can pay out to its distributor network. It's simple common sense. It would go broke fast if it paid out any more than it received and, in fact, no company can afford to pay out more than a net total of around two thirds of the wholesale price and stay in business. (Some companies pay out as little as 8%, believe it or not. Most pay well below 50%.)

So even companies promoted as "paying out to infinity" have only a very finite amount of money to pay out.

That word "infinity" has a very specific meaning in network marketing, and it does NOT mean that you'll earn income to infinity on every leg or every person in your downline team. In fact, any leg on which you ARE paid to "infinity" is likely to be a very shallow one, with very few levels or people in it and very little income for you.

Why?

Because "infinity" bonuses are always blockable. In other words, they're SHARED bonuses. When you qualify for a specific percentage in "infinity" bonuses and someone in your downline qualifies at the same level as you, they take over those bonus entitlements from you, blocking you from any further payments below them.

Bottom line: anyone promoting a plan on the basis that "you never lose your downline" is being deceptive, or they're ignorant of the realities of that plan.

In other words, they're playing "smoke and mirrors", whether they realise it or not.

Do you really want EITHER as your sponsor?

A breakaway plan isn't undesirable because of the fact that qualifying downline teams break away from you (while you still earn lucrative override royalties on their monthly volume!)

That's just cunning "distraction", in the same way that the term "pyramid selling" scares people away from legitimate network marketing... the pyramid structure has NOTHING to do with the legality or ethics of the system, because EVERY structure in EVERY organisation MUST be a pyramid in order to operate effectively. Nothing else works.

EVERY compensation plan is a breakaway plan -- not in the downline structure (that's just a giant red herring to distract you) -- but in the PAYOUTS to upline sponsor and leaders.

What you need to beware of isn't the fact that a plan limits the amount of money it can pay out. That's just accounting. There's a limited amount of money that ANY company can pay out.

What you should watch out for are the REAL income stoppers in more than 90% of compensation plans:

1. High group volume qualifications that determine the percentage payout YOU can earn.

2. High downline rank qualifications that also determine the percentage payout YOU can earn.

These are grossly unfair. Not only will you be hit by poor group volume produced by a do-nothing downline team, but in this kind of plan, where the group volume determines what percentage YOU'LL receive, you'll be hit by a disastrous "double whammy"... a smaller group bonus pool AND a smaller percentage payout -- which you have only limited control over, no matter how hard YOU work.

When a compensation plan says that you have to produce group volume at a certain level to qualify for a percentage payout, you know what to expect.

It's the same when it says that you have to have a certain number of people qualified at a specified rank before YOU can be paid that percentage.

You KNOW what to expect!

Not sure about this? Read my article entitled "Facing Reality in Network Marketing".

Network marketing is full of this kind of deceptive "spin", so be prepared.

All it really says is that there's a lot of money to be made in this business, or the sharks and parasites wouldn't bother hanging around.

But you need to learn how to avoid these types of booby traps, smoke and mirrors and outright lies. When you know what to look for, and what to avoid, you stand a better chance.

As the Good Book says -- and it applies just as much to M|L|M as to anything else in life -- "You shall know the truth, and the truth shall set you free."

The links below can help you avoid the most common pitfalls and boobytraps.

(c)John Counsel is CEO of The Profit Clinic MLM Success Centre, a leading resource for network marketers, and author of two best-selling books on network marketing. Visit www.profitclinic.net to learn more. John presents regular free webinars at www.FREEcoachingonline.com, as well as bulletins and special reports by email. Subscribe at www.profitclinic.net/reports/register.php. Learn to evaluate opportunities at www.EvaluateMLM.com and www.MLMpayplans.com.

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