FEATURE ARTICLE
Comparing
Compensation Plans
DID YOU KNOW that the
minimum required OV (team volume)
for a dōTERRA Presidential Diamond is
162,000, while other companies require
their top leaders to have 1 million or
more in team volume? dōTERRA is
also unique in that it has a retention
rate of more than 70 percent; other
companies average 10–20 percent.
A major reason for this loyalty is that
dōTERRA provides a product people
love and need. A second reason is that
our compensation plan is designed to
benefit our Wellness Advocates not
only in the beginning, but also—and
especially—over the long-term.
WHAT ARE THE THREE TYPES OF COMPENSATION PLANS?
BINARY
• Only two people can be placed on
your frontline.
BREAKAWAY
• Compensation is based on the
group volume of each leg.
• Your business-focused downline
breaks away from your team when
they decide they want to build for
themselves.
• Commissions are usually paid on
the weaker leg.
• There are monthly team volume
requirements for all leaders.
• This plan is not driven by levels, but
the volume within an organization
is limited for payouts.
• When a leader breaks away, they
take their volume with them.
• When a distributor doesn’t
qualify, commissions return to
the company.
• Leaders are then paid on the
number of generations of downline
groups.
UNILEVEL
In the direct selling world, there
are three basic compensation plans:
binary, breakaway, and unilevel.
Of the three, dōTERRA decided that
WHAT ARE THE PROS AND CONS OF EACH PLAN?
BINARY
BREAKAWAY
• Each builder is paid on in dividual
levels.
PROS:
• The plan is easy to explain.
PROS:
• Structure is very important.
The placement of individuals in
your downline is key.
• There are frequent payouts.
• It is a great plan for those with
exceptional recruiting and
selling skills.
• Requirements for rank and bonuses
are based on OV and width.
• There are no limits on width or
depth, but you are only paid on
a limited number of levels (seven
in dōTERRA).
a unilevel plan was the best option
for Wellness Advocates. Why?
The answer is in the comparison.
CONS:
• Usually people are only paid on
their weakest leg. There is no
reward for the leg that represents
the greatest amount of effort.
• Your payout could be very large.
UNILEVEL
PROS:
• It provides a great option for
part-time distributors.
• There are supplemental bonuses.
• The payouts are large.
CONS:
• The plan itself is difficult to
understand.
• There are no limits on the number
of people who can be on a
distributor’s frontline.
• You have to have two legs to
get paid.
• Distributors have a tendency to
stockpile product.
• Residual income is secure
• The plan faces regulatory
challenges, both from the FTC
and abroad.
• The plan pays the highest levels the
most money, while significantly less
goes to the lower levels.
• It is only good for single-product
companies.
• There is a low retention rate.
• It is usually slower to build.
• It creates competition within the
organization.
• There are smaller checks initially.
• It is more beneficial for business
owners than consumers.
CONS:
• There are limited levels of pay.
• It requires time and hard work
to build.
• Revenue is not continuous—it will
be up sometimes and down just
as quickly.
UNILEVEL PLUS. In looking
at the pros and cons, the founding
executives decided that the unilevel
plan would be the most likely to achieve
their goals for dōTERRA. However, they
wanted to create a way that those who
were just starting to build the business
could earn money as well. That is why
they added Fast Start and Power of 3
bonuses. In this way you can build a
long-term income, but have bonuses to
get you there along the way. They also
added the Founder’s Club and Bonus
Pools, so that your hard work and
effort to get to higher ranks will be
even more beneficial.
Find more business tips on the doTERRA Business Blog at: http://doterra.com/US/en/blog-business.
48
dōTERRA ESSENTIAL LEADERSHIP I JULY / AUGUST 2016
www.doterra.com
49