The Stair Step/Breakaway MLM Plan is a commonly used compensation model in many MLM Companies. It is built around the concepts of progression and leadership within the sales team. In this structure, distributors move through various ranks or “steps” based on their personal sales performance and team-building achievements. As they advanced to higher levels, they increased commissions and additional bonuses.
However, once a distributor reaches a specific rank, they can “break away” from their upline, becoming independent and leading their own business unit. This transition allows them to earn profits from their team’s sales and gain additional rewards and incentives.
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As a distributor’s team grows, they must typically meet specific group volume requirements to advance in rank. When the team becomes large enough, it eventually “breaks away,” and the distributor begins earning a smaller commission on the entire group rather than receiving maximum commissions based on multiple downline levels.
The term “stairstep” refers to the way distributors move up through different ranks within the company, with each step allowing them to earn higher commission rates based on their achieved rank. Then they “break away” from their upline and are no longer part of their upline organization.
After breaking away, a distributor becomes eligible for higher commissions. In the basic stairstep MLM plan, a distributor usually progresses through a single level, but many companies expand the structure by adding extra goals and qualification criteria. These adjustments enable distributors to progress through multiple higher stages and achieve greater growth within the system.
It also boosts the overall group sales volume. When a distributor reaches a specific advanced stage, they and their team break away from their immediate sponsor and can generate higher earnings. As income grows with team expansion, the distributor eventually breaks away completely. At this point, earnings may stabilize for a while until the team expands further, where even a small percentage of the group volume becomes more profitable than traditional level-based commissions.
Here’s a simple example to help you see exactly how the Stair Step MLM Plan works:
When starting out, there is often a front-end load, meaning the distributor must purchase a certain range of products to join the company. This used to result in a garage full of inventory, but over time, most companies have implemented a cap on the initial product investment.
Each step in the stair-step plan represents a progression in rank or position within the company.
Advancement to a higher position depends on the distributor’s personal sales volume and the size of their team—specifically, the number of customers or distributors purchasing through them.
As the distributor climbs to the top of the stair-step ranks, they become eligible to “break away” from their immediate sponsor and operate independently, managing their own team and business.
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At each step or rank in the Stair Step MLM Plan, a distributor is assigned a certain amount based on the discount or refund they earn from their purchases through the company.
For example, at the first stage a distributor may receive a 20% discount. At the second stage the discount increases to 25% and at the third stage, it rises to 30%.
At the fourth stage, a distributor receives a 35% discount while at the fifth stage the discount increases to 40%. As the distributor advances through the ranks and expands their marketing efforts both their earnings and discount rates improve.
Once a member reaches the rank of Distributor, Supervisor, Manager, or National Director, they must hold that position (or a higher one) for three consecutive months to receive the “Once-Off Title Bonus.” If the member drops a level and later regains the rank within the Breakaway MLM Plan, they must again maintain it for three full consecutive months to qualify for the bonus.
The following steps illustrate how commissions are calculated in the Stair Step Breakaway MLM Plan:
A Sales Executive Level joins the company by paying a one-time registration fee of $400. Each SEL must have a SPONSOR; otherwise, their registration will automatically be assigned to the Head Office. To qualify for promotion, an SEL must refer at least 6 new qualified recruits (i.e., recruits who have also paid their one-time registration fee). At the beginning of the next month, the SEL will be promoted to the rank of Distributor.
A Distributor must personally sponsor at least 6 qualified SELs—each having paid their registration or monthly fee in their joining month. There is no time limit to qualify as a Distributor; it could take weeks or even years. Once an SEL meets the criteria, they are promoted to Distributor status.
Additionally, each time a Distributor directly sponsors a new Distributor within their team, they receive a one-time “Promotion” bonus. This bonus has no time limit and is awarded every time a directly sponsored Distributor is promoted.
A Supervisor must personally sponsor at least 8 qualified Sales Executive Levels and 3 qualified Distributors (each of whom has personally sponsored at least 6 qualified SELs). There is no time restriction for achieving Supervisor status.
Every time a Supervisor directly sponsors a new Distributor or Supervisor within their team, they earn a one-time “Promotion” bonus according to the company’s policy.
A Manager must personally sponsor at least 26 qualified Sales Executive Levels, along with 4 qualified Distributors (each having personally sponsored at least 6 qualified SEL), and 3 Supervisors (each meeting the required team structure).
Each time a Manager directly sponsors a Distributor, Supervisor, or Manager within their team, they receive a one-time “Promotion” bonus as per company guidelines. These promotion bonuses have no time limit and are awarded every time a directly sponsored member advances to Distributor, Supervisor, or Manager level.
A National Director may qualify by personally having at least 36 qualified Sales Executive Levels (SEL), as well as personally sponsoring 8 qualified distributors, each of whom must have personally sponsored at least 6 qualified SEL. Additionally, the National Director must have personally sponsored Supervisors, each maintaining the required qualifying team structure. There is no time limit for achieving National Director qualification.
Each time a National Director develops a directly sponsored Distributor, Supervisor, Manager, or National Director within their team, they receive a one-time promotion bonus as specified by company guidelines. These promotion bonuses have no time limit and are awarded each time a National Director promotes a directly sponsored Distributor, Supervisor, Manager or National Director.
Once a distributor reaches Directors' Club status, they immediately qualify for a one-time Title Bonus. If they achieve Directors' Club status within 10 months of registration, they receive a higher Title Bonus.
After reaching Directors' Club status (or above), they must maintain that status for 3 consecutive months to receive the one-time Title Bonus.
If they drop to a lower level and are later promoted back, they must again maintain the level for 3 consecutive months to qualify for the one-time Title Bonus.
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Participants in the breakaway MLM plan can unlock higher commissions as they advance through the ranks, along with attractive bonuses and additional incentives at each higher level.
The structured, step by step design of the breakaway MLM plan gives participants clear goals and targets to achieve, motivating them and encouraging consistent, active participation.
The stair step MLM plan promotes rapid expansion, as each distributor builds and grows their own team, allowing the network to scale quickly and potentially expand exponentially.
In a stair step/breakaway MLM plan, participants can grow their businesses at a pace that suits their personal goals and level of commitment.
The breakaway MLM compensation structure can lead to intense competition among participants as they push for higher ranks and rewards which may sometimes result in conflicts or strained relationships.
Success in the MLM stair step plan often relies heavily on continuously recruiting new members which can sometimes shift focus away from product quality and customer satisfaction.
The competitive environment and emphasis on meeting recruitment targets in the Breakaway MLM plan can lead to a high participant turnover rate making it challenging to build a stable, long term network for sustained growth.
As the network expands the MLM stair step plan faces the risk of market saturation making it harder for new participants to find customers or recruit additional distributors due to the high number of existing members.
Stair Step MLM plans provide various attractive bonuses to keep distributors motivated. One key incentive is the Fast Start Bonus which rewards you with a generous commission on the initial purchases of new distributors or customers you enroll allowing you to earn quickly from the start.
A key element of the MLM Stair Step Compensation Plan is Leadership Bonus. As you advance in rank and take on leadership roles you earn additional bonuses based on your downline sale. Receiving a share of your team earnings creates a strong incentive to mentor and support their success.
Rank Advancement Bonuses are a vital part of the Stair Step MLM system, offering a one time reward when you achieve specific milestones or ranks. These bonuses provide an extra financial boost recognizing your effort and commitment as you climb the ladder of success.
The Matching Bonus is a valuable incentive in Stair Step MLM plans, designed to reward the success of your personally sponsored team members. You earn a bonus on a portion of their earnings, encouraging teamwork and fostering a collaborative, supportive environment.
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