One of the most common compensation plans used by the direct sales companies is the unilevel compensation plan. But one thing most of the direct sales companies does not discuss is the unilevel plan breakage. During a direct sales process, if a breakage occurs in the plan, it may create a suspicion among the distributors about their payout being dropped. So exactly what is a breakage? So unilevel breakages is when the distributor in the upline level does not receive the payout or commission for their work because they does not meet some specific criteria. Also, commission caps and inactive distributors can also create breakage.
Breakage is not considered as a negative for a direct selling company. The company’s payout ratios is maintained by the breakage and the number of leaders that can quickly qualify because of breakages is low, and this prevents a situation in which the pool is segmented into small portions.
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