Practical Tips for Managing Breakage in Unilevel Compensation Plans

Unilevel breakage is a topic not discussed by the direct sales company. What is a breakage? A breakage is where the distributor in the upline or downline network does not receive any commission or payouts because they do not satisfy certain requirements. Companies do not consider breakage as a negative situation. In fact, breakage helps direct sales companies to maintain a stable payout ratio. Breakage of a direct selling company is the difference between the theoretical maximum payout and what is actually paid out once all the rules and conditions are put into practice. Setting healthy payout range that supports growth, payout as 35-45% of commissionable volume etc can help direct sales companies to build a sustainable payout model.