Is Ignition Marketing’s compensation plan structured as Affiliate Marketing, Network Marketing, or Multi Level Marketing (MLM)?
Short answer: IM’s compensation plan uses MLM.
Let’s look closely..
Here’s the Ignition Marketing compensation plan:
When we say Level 1 customers, we mean your direct referrals. For purposes of this discussion, we will focus only on the first 20 direct referrals.
Let’s define your “Level 1 Retained” customers as your 1st, 3rd, 5th, 7th, 8th, 9th, 11th, 12th, 13th, 14th, 16th, 17th, 18th, and 19th direct referrals.
Let’s define your “Level 1 Passed Up” customers as your 2nd, 4th, 6th, 10th, 15th, and 20th direct customers.
Based on the Ignition Marketing compensation plan, and as far as commissions for the sale of the P2,999 Online Prosperity Training (OPT) program of IM is concerned, the referral commission ranges from 40.0 to 66.7 percent.
The average commission rate for your first 20 direct referrals is 50.7 percent.
Those average commission rates shown above are based on the following:
Commissions you earn from your “Level 1 Retained” customers = P2,000
Commissions you earn from your “Level 1 Passed Up” customers = P400
When your “Level 1 Retained” customers directly refer customers, they will also pass up commissions to you. You will earn P1,600 from each of the 2nd, 4th, 6th, 10th, 15th, and 20th direct customers of your “Level 1 Retained” customers.
Let’s call those people your “Level 2 Passed Up To You” customers. Remember to say Thank-You to your “Level 1 Retained” customers for their sales efforts.
Assuming you have 20 direct referrals, and all of those direct referrals each bring in 20 direct referrals, we will have the following:
“Level 1 Retained” customers = 14 people x P2,000 = P28,000
“Level 1 Passed Up” customers = 6 people x P400 = P2,400
Total Level 1 Commissions = P30,400
Total Level 1 Sales = 20 x P2,999 = P59.980
Average Level 1 Commission Rate = P30,400 / P59,980 = 50.7 percent
Total Level 2 Passed Up To You Commissions = 14 x 6 = 84 people x P1,600
Total Level 2 Sales = 20 x 20 x P2,999 = P1,199,600
Average Level 2 Passed Up To You Commission Rate = 11.2 percent
Now if those 84 “Level 2 Passed Up To You” customers each directly refer 20 customers, then you’ll have what we shall call “Level 3 Passed Up To You” customers.
That’s 84 x 6 or 504 passed up to you customers x P1,600
= P806,400 commissions earned from “Level 3 Passed Up To You” customers.
Total Sales in Level 3 = 20 x 20 x 20 = 8,000 customers
8,000 x P2,999 = P23,992,000
Average Level 3 Passed Up To You Commission Rate = 3.4 percent
In summary, here are your commission rates from the sale of the OPT product of Ignition Marketing:
Level 1: 50.7 percent (from your own sales effort)
Level 2: 11.2 percent (from the sales efforts of others)
Level 3: 3.6 percent (from the sales efforts of others)
(We can extend this to Levels 4, 5, 6, and onwards…)
Here’s the definition of MLM (Source: Wikipedia)
Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant’s “downline”, and can provide multiple levels of compensation.
From the above definition, Ignition Marketing’s compensation plan (specifically the Pass Up component) shows that it is using multi-level marketing (MLM).
Download: How To Join Ignition Marketing
Manny M. Viloria