Compensation Plan Questions and Answers

The following Q & A describes how “The Health Nuts” compensation plan works. This is not a representation of typical, actual or average earnings of Individual Representatives. Actual commissions and organization size by representatives will differ and what a representative earns in commissions will be dependent upon the time and effort they devote to building their business and their ability to market the products.

1. What is a uni-level compensation plan? A uni-level plan has many levels available to receive commissions on the products that are sold. “The Health Nuts” uni-level plan has 10 levels of commissions. A uni-level also means you can have as many personally sponsored product purchasers on your first level... in other words... unlimited width. You could have 100 or more personally sponsored purchasers on your first level.

2. How do the fast start bonuses work? Every time you have a new person buy product... you have created a new fast start bonus. Example: Two years from now, Jane buys a bottle of enzymes. You are her personal sponsor. Her first purchase was in the month of June... you’d receive a fast start bonus of 10% on her first purchase and any additional product that Jane buys in June and July. There are four levels of fast start bonuses. This is how they work:

Personally sponsored purchasers:

Level 1....................... 10%
Purchasers your first level people sponsor: Level 2...................... 10%
Purchasers your second level people sponsor: Level 3....................... 15%
Purchasers your third level people sponsor: Level 4....................... 15%

Anytime a new person purchases product that is within the first 4 levels of your organization... you will receive a fast start bonus on the new persons purchases for the first two months.

3. When does the 10 level uni-level commissions start? ? The 10 level commission structure starts the third month of every new person. Example: You are the personal sponsor of Bob. His third month and after purchases will be paid from the 10 level commission structure that is 10 levels deep.

4. Why do I get paid a lower percentage starting the 3rd month? For a distributor to get the most out of a compensation plan ... it is always best to have a lower percentage payout on the upper levels and a higher percentage payout on the lower levels. The following hypothetical example explains why! Example:

2 x 10 organization
1st level 2 6th level 64
2nd level 4 7th level 128
3rd level 8 8th level 256
4th level 16 9th level 512
5th level 32 10th level 1,024

Totals 62 in levels 1 - 5 1,984 in levels 6 - 10.

Would you prefer a higher percentage on the 62 people or the 1,984 people?

Which level would you like your highest percentage to be on?

5. How do the bonus pools work? When you have 15 personally sponsored active purchasers... you qualify for the first bonus pool and will share equally in 2% of the company’s total volume. Example: “The Health Nuts” total monthly volume for January 2003 was $1,500,000... the bonus pool would have $30,000 in it. If 30 people had qualified... each would get $1,000 apiece. If 60 people qualified... each would get $500 apiece. The second bonus pool of 3% would have $45,000 in it. You qualify for the second bonus pool when you have 35 personally sponsored active people. If 15 people were qualified in January 2004, each would receive $3,000. If 45 people were qualified... each would receive $1,000.

6. What does personally sponsored active person mean? It means you have a person on your first level that has purchased product during that month. Let’s say January 2003... you had 50 personally sponsored people. 32 of the 50 purchased product in January. In February you added 5 new people and out of your 55 personally sponsored people... 38 purchased product in February. You would qualify for the first bonus pool in January and both bonus pools in February. It’s that simple.

7. Do I have to purchase product to receive commissions? Yes. “The Health Nuts” has a very low month qualifier to receive commissions... it only takes a $30.00 purchase to receive commissions for each month.

8. Other companies have a much higher qualifying purchase to receive commissions. Why is “The Health Nuts” qualifier so low? “The Health Nuts” believes that a distributor shouldn’t have to buy more than what they consume. If a distributor wants to buy more products... they can.

9. What if I miss my purchase during a month? Any commission you would have earned will roll up to the next qualified purchaser above you. This is one great reason to be on the auto-ship program. The auto-ship assures you of getting your product and commissions every month.

10. If I personally sponsor 2 purchasers a month and each of the purchasers I sponsor did the same... what would my organization look like in 12 months?
1 2 3 4 5 6 7 8 9 10 11 12 (Months)

2 2 2 2 2 2 2 2 2 2 2 2
4 8 12 16 20 24 28 32 36 40 44
8 16 24 32 40 48 56 64 72 80
Level Totals 16 32 48 64 80 96 112 128 144
1- 24 32 64 96 128 160 196 224 256
2- 264 64 128 192 256 320 384 448
3- 440 128 256 384 512 640 768
4- 720 256 512 768 1024 1280
5- 1152 512 1024 1536 2048
6- 1792 1024 2048 3072
7- 2688 2048 4096
8- 3840 4096
9- 5120 Total in 10 levels = 22,184
10- 6144 Total in levels 8, 9 & 10 = 15,104
11- 6144 Total in levels 6 - 10 = 19,584
12- 4096 Total in levels 1 - 5 = 02,600

This is a hypothetical example... but it shows the real power of duplication.

Anyone can build a large network marketing organization... with or without a lot of money. It can start simply by sharing the audiotape or information with a few people. The results that people get with the digestive enzymes can make your organization grow. Take the time and share this wonderful product with someone that really needs the product or with someone that knows how to market nutritional products and start building a great residual income that can last for years.

11. Why do some companies have pay plans that have 15% on the first level and 45% on the second level? These companies are trying to put money into the pockets of their distributors as quickly as possible... in order to keep them in the program. Most feel that if a person makes $300.00 a month income... that person will stay with the program and continue to market. Here is the drawback of this type of compensation plan: Most people would like to earn a monthly residual commission check that makes it possible for them to have more free time to live a comfortable life. Most part-time network marketers would love to earn $10,000.00 a month and acquire financial freedom. To earn a $10,000.00 or more monthly income from a compensation plan that pays 15% - 45% in the first two levels... you would have to be a super-duper-mega-recruiter. These high commission pay plans make it look like more money will be made. In reality, they hold people back from making the kind of money that could give them true financial freedom. Don’t take anyone’s word for it... put the numbers to the chart in question # 5 or in question # 10. Figure out how many people you would personally have to sponsor and how many they would have to sponsor to earn $10,000 or more a month. To really acquire financial freedom in network marketing... it takes time, persistence and patience to develop a successful organization. Most people in the 15% - 45% payout programs would earn a lot more if they were in a company with a pay plan like “The Health Nuts”.

12. Can you give me an example of how a great residual income is built?If you have 3 hours a day to build your business (5 days a week). You personally sponsor just 2 people a month for the next twelve months (see chart in question # 10) that will also devote 3 hours a day to build their business (5 days a week).

Level Totals (organization after one year of each person getting 2 new people each month
1- 24 times 3 hours a day = 72 hours a day your business is being built.
2- 264 times 3 hours a day = 792 hours a day your business is being built
3- 440 times 3 hours a day = 1320 hours a day your business is being built
4- 440 times 3 hours a day = 1320 hours a day your business is being built
5- 1152
6- 1792
7- 2688 In one years time... with just the first four levels... you would have your business being built... 4344 hours a day (5 days a week)... or 21,720 hours a week. This is why people want to get involved in Network Marketing. If your business was being built 21,720 hour a week... wouldn’t you be making some serious commissions? More than likely... you would be on the way to becoming the next Network Marketing Millionaire. 24 hours a day times 365 days is 8,760 hours in a year. 21,720 hours times 52 weeks = 1,129,440 hours.
8- 3840
9- 5120
10- 6144
11- 6144
12- 4096
 
 

(This is a hypothetical example of the power of Network Marketing.
It explains how people in Network Marketing become Millionaires.
It does not imply... that you will achieve this level of success).

13. What makes a compensation plan great? 1. Unlimited width plus plenty of levels to have your organization develop. 2. The product you are marketing is key to getting the most out of any compensation plan. If you are marketing a product that everyone needs and it will improve his or her life... you can make a good living. If you have lower percentage commissions toward the top and higher percentage commissions toward the bottom along with a great product... you have the potential to achieve the financial independence most network marketers desire. The sooner you get started... the quicker you can make it happen.


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