What is a Stair Step Break Away MLM Plan?

The breakaway plan is an advanced strategy that effectively manages growth opportunities at each stage. It provides a clear rank hierarchy within its structure, allowing distributors to follow it for significant growth. Companies using the Stairstep compensation plan in network marketing rely on Stairstep MLM software to enhance distributor productivity, ensure accurate payouts, and automate workflows.

In this article, we’ll simplify the concept of a breakaway plan, explore its advantages, and discuss its drawbacks.

What is Stair Step Break Away MLM Plan?

The Stair Step Breakaway MLM Plan is a popular compensation system in MLM companies. It’s all about recognizing and rewarding progress and leadership within the sales team. In this plan, distributors move up the ranks or steps by selling products and building their teams. As they climb these steps, they earn better commissions and bonuses.

Here’s the interesting part: Once a distributor reaches a certain rank, they can “break away” from their upline. This means they become independent and can run their own business. By doing this, they get to enjoy the profits from their team’s sales and unlock more rewards and incentives.

How Does Stair Step Break Away MLM Plan Work?

The Stair Step Break Away MLM Plan is like a plan within a plan – it’s integrated with other basic MLM structures like the unilevel, binary, or matrix plans. Companies often add “breakaway” to these plans, creating variations such as binary breakaway or matrix breakaway plans.

By default, many MLM companies prefer the unilevel plan, but they explore other options when their strategies demand it. Let’s break down how it works:

In a unilevel plan, distributors can add as many members as they want to their first level. However, in the Stair Step Break Away Plan, there are specific criteria for adding members:

  • For example, if a salesperson recruits the first 10 members, they achieve the status of distributor or rank 2.
  • If they sponsor 25 members, they unlock the “Manager” status or rank 3.

This pattern continues, with the MLM representative progressing through different ranks, each with its own criteria. This structured hierarchy resembles a staircase, and to reach the highest point, a distributor must complete all the steps.

Once a distributor reaches the top “step,” they break away from the plan. This is why it’s called a breakaway plan.

This upgraded version of the basic Unilevel plan offers a step-by-step hierarchy, and the criteria for rank advancement can vary from one company to another, including sales volume or other factors.

The breakaway doesn’t only apply to the person achieving it but also impacts their entire downline group. This group is placed directly under the admin’s control.

The Stair Step Plan is like a career program for distributors, providing clear levels of achievement and corresponding rewards. Compensation is easily calculated based on these ranks, and companies can customize the rank names and terminology to fit their needs.

Compensations in Breakaway Plan

Compensations in the Breakaway Plan are based on both individual and group efforts, and they come in different forms:

1. Sales Bonus:

This is a percentage bonus received when downline members make product sales or sponsor new members. For example, let’s say Distributor X adds a new member to the network who makes $100 in sales.

If the company offers a 5% sales bonus, Distributor X receives $5 as a sales bonus.

When Distributor X achieves a higher rank with a 10% sales bonus, they receive $10 for each $100 in sales made by a new distributor.

The percentage of the sales bonus varies depending on the distributor’s rank.

2. Overriding Bonus:

Distributors receive a sales bonus for adding new distributors to their team.

The upline distributor with a higher rank receives an overriding bonus, which is the difference between the sales bonus percentage of the distributor and the upline distributor with the higher rank.

For instance, if Distributor A is in rank 2 with a 2% sales bonus and Distributor B in rank 3 has a 5% sales bonus, Distributor B receives a 3% overriding bonus (5% – 2%).

Distributors in higher ranks receive overriding bonuses from all the lower-ranking distributors in their team.

3. Fast Start Bonus:

This is a bonus received by distributors when they meet specific criteria within a set time frame established by the MLM company.

For example, if an MLM company sets a fast start bonus criteria like making $1500 in sales volume within 10 days, distributors who achieve this receive a 5% fast start bonus.

If Distributor X makes $1500 in sales within the specified time, they would receive a $75 fast start bonus.

Pros and Cons

Pros

  • Unlocking Income Potential: Higher commissions, bonuses, and incentives await participants as they progress through the ranks in the Stair Step Break Away MLM Plan.
  • Motivation Through Clear Goals: The plan’s structured, step-by-step organization sets specific targets, providing participants with clear objectives that inspire active engagement.
  • Accelerated Network Growth: The Stair Step MLM Plan promotes quick expansion by encouraging distributors to build and grow their own teams, leading to exponential growth within the network.
  • Tailored Flexibility: Participants have the flexibility to develop their MLM businesses at their own pace, aligning with their unique goals and levels of commitment, making it accessible to a wide range of individuals.

Cons

  • Intense Competition: The Stair Step Break Away MLM Plan’s structure fosters fierce competition among participants striving for higher positions and rewards. This intense rivalry can sometimes lead to conflicts and strained relationships within the network.
  • Emphasis on Recruitment: Success in this MLM plan heavily relies on the continuous recruitment of new members. This emphasis on recruitment may prioritize quantity over product quality and customer satisfaction, potentially compromising the overall integrity of the business.
  • High Turnover Rate: The competitive nature of the Breakaway MLM plan, coupled with the need to meet recruitment goals, can result in a high turnover rate among participants. This frequent turnover makes it challenging to establish a dependable and long-lasting network, hindering sustained growth.
  • Risk of Market Saturation: With the expansion of the network, the Stair Step Break Away MLM Plan faces the risk of market saturation. This occurs when there are too many distributors in the market, making it difficult for new participants to find new customers or recruits. This oversaturation can hinder business growth opportunities.

The Bottom Line

The Stairstep Breakaway Plan thrives on motivation. It motivates distributors by offering them the enticing prospect of running their businesses independently after reaching certain goals. Once they break away, they have the freedom to grow their team without sharing profits with their original upline.

When executed properly and with a strong focus on actual sales rather than just recruiting, the Stairstep Breakaway Plan can be a legitimate and effective MLM strategy. It all boils down to how it’s implemented and the emphasis placed on genuine product sales within the network.

Read more: What Is an MLM?

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