MLM Compensation Plan Bonuses
Bonuses to promote Sales
MLM Compensation plans will often use a Bonus, or a combination of Bonuses to attract Independent Sales Representatives to their Sales Force. Below are some common Bonuses.
Wholesale/Retail Bonus (WRB)
Generally considered the First Bonus available to any Sales Representative, regardless of qualification. Sell products to end consumers, in person or by the company Website. End consumers pay retail price and the Sales Representative enjoys the difference between the consumer purchase price and the Sales Representative's wholesale purchase price.
Fast Start Bonus (FSB)
An instant 'Spiff', normally tied to specific sku's, this bonus is triggered upon the sale of a specific product and normally carries a specific dollar amount or % of CV. This bonus could be available to specific ranks, but is often available to entry level Sales Representatives, without other qualification requirements. Many companies will put a Fast Start Bonus on an Optional Product Assortment at the time of enrollment. This would benefit the Sponsor of the new Sales Representative who chooses to make an initial purchase. Sometimes referred to as Seller Fast Start.
Fast Start Bonus Tier 2 (FSB T2)
The ability to assign an additional benefit to the Sponsor of an individual receiving the regular Fast Start Bonus. Sometimes referred to as Sponsor Fast Start.
First Order Bonus (FOB)
A dollar amount or % of CV from the First Orders made by Customer or New Personally Enrolled Sales Representatives. Normally, when this bonus is used, the majority of available CV is used in the bonus which then requires that the items on this invoice not be included in CV totals and the regular compensation plan calculations. Future purchases by the same individual would provide CV disbursement based on the stated compensation plan. Sometimes referred to as Seller First Order.
First Order Bonus Tier 2 (FOB T2)
The ability to assign an additional benefit to the Sponsor of an individual receiving the regular First Order Bonus. Sometimes referred to as Sponsor First Order.
Customer Acquisition Bonus (CAB)
A Bonus, normally a % of CV, for acquiring new customers. This is a good bonus to use when the company goal is to encourage the Sales Force to be focused on Sales Performance to End Consumers.
Sponsor Bonus (SB)
A Bonus, normally a % of CV, or $ for sponsoring a new Sales Representative.
Matching Bonus (MB)
Normally an amount equal to a % of a sales commission earned by your personally sponsored Sales Representatives. Example: I Sponsored John who earns $500. If I am qualified for a 10% Matching Bonus, John would earn his commission, and I would also earn $50 as a Matching Bonus. Some companies will combine the Matching Bonus with a Generational Bonus. This method would provide a Matching Bonus through Generations of Personally Sponsored
Infinity Bonus (IB)
The potential to earn a % through infinity, or until blocked by another Infinity Qualified member of your Sales Force. Some plans allow multiple Infinity Bonuses. If I am qualified for the 10% Infinity Bonus, I would earn 10% through infinity, or until I reach another Infinity Qualified member of my Sales Force. If that Member is a qualified for a 5% Infinity Bonus, then he would earn his Infinity Bonus within His Sales Force, and I would be left to earn 5% within his Sales Force, until reaching another Infinity Bonus Qualified member. If in my Sales Force, I meet someone who is also qualified as 10% Infinity Bonus, then I would be left with 0% Infinity Bonus within his Sales Force.
Generational Bonus (GB)
The potential to earn a % through my Sales Force until reaching another member of My Rank or Higher. Some programs will offer multiple Generations. Gen1 10%, Gen2 5%, Gen3 2%... in this example, I could earn 10% in my Sales Force until reaching a member of My Rank or Higher, I would then earn 5% in His Sales Force until reaching another member of My Rank or Higher, I would then earn 2% until reaching another member of My Rank or Higher, then stops.
Bonus Pools (BP)
Profit Sharing or Bonus Pools are established by setting aside a portion of every sale made by a company. Those funds are then divided among qualified individuals, or they are split into sub pools and then divided. Generally, there are two methods for division. Earned shares based on Sales Performance, or equal division of everyone in the pool based on equal rank or higher. The later is preferred.