Blogging to Build Your Network Marketing Business

Get My WellnessI have been actively building my network marketing business online for just over 4 years now and the single activity that has brought me the most success is blogging. Blogging works to bring in traffic to your website from social media, like Facebook and Twitter. It works for getting your website to rank well on the search engines, like Google, to bring in organic search traffic. Once people are on your website, a blog is an excellent place to interact and build a relationship with your customers and prospects.

If it wasn’t for my blog I wouldn’t have a network marketing business.

I’m partial to a self-hosted blog. My blogs are all in WordPress and they are all hosted through HostMonster. I have been very satisfied with this setup so far. I think that a self-hosted blog is critical to the long-term success of any online network marketing business because that is the best way that you can have the most control over your content. Anything you post on another site, whether it is Facebook or a free blogging site like Blogger.com, can be taken down without your permission or without you even being aware of it. Not ideal when you are building a business.

I have started blogs on WordPress.com and BlogSpot.com but I haven’t done much with them yet. Those sites don’t approve of links to affiliate offers or shopping sites, such as the product pages for my network marketing company. What I can do with them is write a more general post and have it link to my primary blog site to help generate higher rankings with the search engines and more traffic.

You have to have a self-hosted primary blog in place first to send that traffic to.

One of the most important things that a blog does for you is allows your prospects to get to know you, which is key for getting them to purchase your product or join your team.

Find out more about working with me on my primary network marketing blog.

Wayne Woodworth

Disclaimer: I am an affiliate and network marketer. If you choose to purchase products or services through the links on this page then I may earn a commission on your purchase. I only recommend products and services that I use myself.

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Stair Step Breakaway Compensation Plan

The stair step breakaway compensation plan is one of the oldest compensation plans in network marketing. It works just like the unilevel plan in that everyone you personally sponsor goes into your frontline of distributors and your frontline can have infinite width. The difference is that you advance through a series of ranks until you reach a point where your organization “breaks away” from your sponsor’s organization”.

I think the best way to explain it is with an example. Let’s say that Mary is your sponsor and you have personally sponsored 3 people: Bob, Jane, and Tim. We’ll also say that this compensation plan pays out 5% per rank up to rank 4 which is the breakaway rank. You are at rank 3 and each of your people are rank 1.

In the stair step portion of the plan you make your full commission, 15% in this example, on your personal sales, and your commission less your downline’s commission on their sales, or 10% ( 15% – 5% ) in this case. When Jane sponsors some people and gets enough volume to move up a rank she will be at rank 2 with 10% commission, which reduces what you get from her activity down to 5%. If she did that again then you would be reduced to 0% and not get paid at all on her activity.

With this plan you have some strong incentive to stay active and do what you need to do to advance through the ranks if you want to keep making money on the active people you sponsor. The stair step breakaway compensation plan rewards people who stay active in their business. If you are going to be just an “average” network marketer who only sponsors 2 or 3 people then this is not the plan for you. You would be better off with a binary plan or matrix plan and hope you have a sponsor who will build your team for you.

Now let’s say that you have done all that’s required to advance to rank 4, the breakaway rank. The structure below you is still the stair step and you now get 20% because you’ve increased rank. Let’s say that Mary is rank 5. As we said before, in our example the commissions increase by 5% up to rank 4 where they max out at 20%. So, Mary also gets 20% commission and if the plan still operated as a stair step at the level then Mary wouldn’t ever make any more commission on your activity. In our plan, Mary makes a 6% bonus on her breakaway teams ( at least that’s what the company I am with pays ). Back when you were making 15% Mary made 5% on your activity. Now that you have “broken away” she makes 6%, a 1% pay increase. That may not seem like much but realize that to have reached this level in the real world you have more people than just Bob, Jane, and Tim on your team and Mary has more than just you on her team.

I hope you see how this plan works. As I already said, it rewards activity. The people who don’t like the stair step breakaway plan usually complain about 3 things. The biggest complaint is the breakaway. They say that they’ve put all this hard work into building a team only to have it break away. It isn’t really gone because you still do make money at the breakaway team and, depending on how the company sets the percentages, the breakaway can actually mean a pay increase.

The second complaint is with the stair step. They complain that as your team moves up in rank, your commission on their activity decreases. That’s true. As they move up the ranks and gain experience they do get a larger portion of the pie. You would expect the same thing if you were a sales person in a traditional sales force too. We’ve already pointed out a couple times that this plan rewards activity. Also realize that when Bob finally moves up in our example, even though your part of the pie drops from 15% to 10%, you will be getting 10% of a larger pie.

The final complaint I usually hear applies to both this plan and the unilevel plan, and that has to do with the potentially infinite width. They say that it is too many people to work with at one time and they are all in competition with each other because they are cross-line. As your team moves up in rank they are going to need less and less of your time. You will put the majority of your training and hand-holding time with the handful of people who are still at the lower ranks. As for the competition issue, that all comes down to the culture that you and the company create. Like I said before, the company I am with uses this plan and has created a culture of cooperation. I can get help from a cross-line person, and upline person, or a downline person. It’s all the same.

When looking at a company with the stair step breakaway compensation plan, the percentages are important. Make sure that there is an incentive, even a 1% increase, for helping someone to reach breakaway. Beyond that, it’s the usual things you look for in any network marketing company. A reliable company with a proven track record and a quality product that you can get excited about.

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Binary Compensation Plan

There are many types of compensation plans in network marketing right now. One of the most common with newer companies right now is the binary compensation plan.

In a binary network marketing plan, you build your team by powers of 2. You have 2 people in your front line, then they each have 2 in their front line, and so on to an unlimited depth. You will generally get paid based on the volume of your weaker leg, so your goal is to try to keep the sales volume between your two legs balanced to maximize your compensation.

Some companies have added a twist to their binary plan. Each position in the tree is called a “business center” and some companies allow a distributor to have multiple business centers so that they effectively occupy more than one position in their own organization. For example, in the picture to the left, say that is you at the top and you are allowed to start off with 2 additional business centers that are your personal left and right legs so that you occupy the top two rows. You now effectively have 4 legs instead of 2 and the potential to make a lot more money.

One of the benefits that people in companies with a binary plan talk about is that it encourages more cooperation among the people that you recruit because they are upline/downline to each other instead of cross-line. That argument only goes so far because the 2 people in any given front-line are still cross-line to each other.

Another benefit of the binary compensation plan is that  it encourages you, the sponsor, to work with your downline more to help them build their teams. That is true, because if you sponsor more than 2 people, you will have to place the additional people below someone else already on your team. One way that people do that is to build what they call a “power leg”, where you place each new person you sponsor under the last person you sponsored, making one long leg. It’s then up to the motivated people to build their other leg. The less motivated people will either end up as placeholders and eventually get frustrated and leave or they will see what other people are accomplishing and get motivated themselves.

I keep seeing mention of a study that was done several years ago that showed that the average network marketer sponsors between 2 and 3 people. That’s it.  And one of the things that the binary plan was created to do was make it possible for those average people to build their front-line and generate an income. That’s all well and good, but if you are only going to sponsor 2 or 3 people then why bother to start a business that’s all about sponsoring new people and selling product? It seems a waste of time to me.

There is one unfortunate side-effect to binary plans, and matrix plans too. I see a lot of ads online telling people that they can get started in network marketing, never have to sponsor anybody, and make a lot of money. They say that they will build your downline for you. A lot of times these are either binary plans or matrix plans and less than honest sponsor will put them in a position and there is no guarantee that anyone else will get placed under them. I think it is sad because the person thinks they are joining something legitimate, which the company may be even though the sponsor isn’t, and it could ruin network marketing for that person.

I personally don’t like the binary plan because it is open to be abused by the scammers I was just talking about and because it caters to lazy network marketers. I want more control of who is on my team. While it sounds good to have someone in your upline adding people, you don’t know what kind of people they are. They might not be someone you want to work with. Also, I don’t want people below me, whether I sponsored them or someone else did, to complain to me because I’m not building their team for them.

The bottom line is that the binary compensation plan can be a very good plan depending on the company, your sponsor, and your desire to build your own team. As with any new business venture you join, make sure you know what you are getting into. Is it a reputable company with a good product that you can believe in? Check out your sponsor and the team your are joining to make sure they are being honest with you. And of course, any time you hear that you can make money without having to do anything, run away.

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