The 50-70% Pay Out Myth Busted

Ever heard?

My company pays

50%, 60%, 70% to distributors…

I guess that claim refers to Commissionable Value and not Sales Revenue.  What is Commissionable Value? It is usually a percentage of your Sales Revenue.

If you analysis the payout to distributors for a number of Public Companies as Herbalife, NU Skin, USANA, Mannatech and RBC Life Sciences it comes closer to 37% – 40% over Sales Revenue on average.

5% is the maximum for an individual distributor over his commisionable team volume as residual income.

So if your group is selling $100,000 commissonable value per month, you receive $5,000 if you are qualified.

However Direct Selling is still a great business, 5% residual income is awesome!

From the annual reports 2010:

Herbalife:

Apart from 25-50% Retail Profit that Herbalife distributors are able to earn, once you are a Supervisor with Fully Qualified or Qualifying Supervisors in your first three downline levels, you may qualify to earn Royalty Overrides of 1% to 5% of your Organization Volume.

Commission is called Royalty Overrides. Pay Out: $900 million =33%

Nu Skin:

Historically, our distributor compensation plan has paid out to distributors approximately 42% of commissionable sales. We believe that our commission payout as a percentage of total sales is among the most generous paid by major direct selling companies.

Commission is called: Selling Expenses. Pay out $646 million = 42%

USANA

Commission is called: Associate incentives. Pay out: $233 million = 45%

Mananatech

Based upon our knowledge of industry-related network marketing compensation plans, we believe our global associate career and compensation plan remains strong in the industry and is currently among the most financially
rewarding plans offered. Together, our commissions and incentives range from 44% to 50% of our consolidated net sales.

Commission is called: Commissions and incentives. Pay out: $97 million = 42%

RBC Life Sciences

We compensate Associates for their sales activities through our Associate compensation plan. This plan allows Associates to earn higher commissions as their sales and the sales of their downline Associates increase.

Commission is called: Associate network. Pay out $6 million = 40%

Myth busted….