Understanding Multi-Level Commissions

See why this book is a classic for today's multi-level commissions. In the decade since the original version of this book was published, it has become the must-read book for anyone who needs an in-depth knowledge of multi-level compensation plans.

For an industry growing by leaps and bounds, the multi-level commission plan remains a mystery to distributors and leaders alike. In this book, Mark Rawlins, an industry consultant and software provider for over thirty years, uncovers the commission plan and explains the underlying concepts that make every plan work. This book is a useful resource for anyone in the direct sales industry -- from distributors, to corporate executives, to someone thinking of starting a new company. It explains the three major components of a multi-level sales plan: commissions, rules, and structure. The first of its kind, this book discusses the history of commission plans, how plans affect and are affected by distributor behavior, and commission plan design. Rawlins breaks down the standard plans used in the industry and discusses the pros and cons of each. This book is ground-breaking for anyone who wants to understand the ins and outs of the multi-level commission plan.

Mark Rawlins is an innovator, an entrepreneur, and a technical leader for computer systems in the network marketing industry. His knowledgeable counsel has helped several network marketing companies to success, including Nikken Incorporated, Quorum, and Enrich. His influence has benefited not only individual companies, but also the industry as a whole. Rawlins’ knowledge of commission plans comes from the inside. “I’ve worked in the middle of the fastest-growing—and fastest-dying—companies in the business,” he says. “I’ve seen all kinds of growth patterns. As a consultant, I’ve even been given beds at client companies while we worked through some of the problems that come with exponential growth.” Rawlins has a unique perspective on the network marketing industry in general and on commission plans in particular. “I like to listen to what the distributors say about their experiences,” he says. “I like the fun and the excitement of a network marketing company. I enjoy watching the operations, even the details, like seeing the checks being printed. I like writing software that solves the problems I see cropping up. I’ve seen the crushing blows that can strike a company that was not prepared for rapid growth, and I enjoy having a hand in finding and conquering all kinds of mistakes in setting up commission plans. After all, an intelligent plan for distributor payout is at the heart of network marketing success.” Rawlins says he finds the industry “maddening, exhausting, and fascinating.” You can find Mark Rawlins’ company, InfoTrax, on the web at www.infotraxsys.com. A Unique Perspective -- Mark's Own You may wonder who I am, and how I’ve come to understand these issues. I’ve worked in network marketing since 1981, and I’ve seen the rise and fall of many companies. I have more than twenty years of experience under my belt in helping people start and manage network marketing companies. My team and I have created software that has been used by more than 200 such companies. In 1988, we created the first voicemail and telephone touchtone order entry designed for this industry. At the beginning of the Internet revolution in 1995, we created a complete integrated suite of tools to help distributors order product, sign up other distributors, check worldwide volume, and generally manage their business on the Internet. We didn’t simply create packaged software; rather, we created software solutions that addressed the real needs of operating network marketing companies. I’ve spent years working inside many network marketing companies, designing software systems to meet their specific needs. I’ve lived through their hyper-growth. My team and I have worked round the clock for weeks on end to make certain our client companies can pay their distributors in a timely and reliable manner. I’ve worked with many of the successful startup network marketing companies to appear during the last twenty years. I’ve been fascinated by watching companies try to solve their problems by changing their commission plans. Sometimes the changes work and send the company to new heights. At other times, the unintended and unanticipated consequences can be massive, changing fairly minor problems into full-blown disasters. Great field leaders must believe in the plan. If they don’t believe in it, they can’t sell it. If they can’t sell it, the company is out of business. I can’t emphasize too strongly how important it is for a company to build a plan that’s enthusiastically supported by its field leadership. I look at network marketing not from the sales aspect, but from the operational aspect. I’ve observed the operations of many companies, and I’ve done a great deal of analysis on why things work the way they do. I’ve thought a great deal about why some of the companies I worked with went on to become highly successful, while others seemed to simply dry up and blow away.