Direct/Indirect sale representatives are driven based on the incentives they receive. The direct selling industry motivates and encourages millennials to be their own boss by promoting products they can relate to.
Working under someone or a 9-6 job shift can be tedious. Variable compensation plans can help sellers strive for more and multiply monetary increments. While hiring or working with independent direct sellers, organizations should strategize plans that align with their vision, team objectives and sales targets. Providing alternatives to individual sellers to hit their targets can help them get creative and achieve goals efficiently.
Also, it is necessary to examine seller capabilities before designing a compensation plan. A performance-based incentive plan has a positive effect because offering a fixed salary is pretty much straightforward. Let us have a look at what are the different types of compensation benefits and how direct selling organizations can retain potential contributors.
Profit Margin Compensation Plans
These compensations plans are straightforward and are based on the price tag of the product sold. These commissions involve the original price of product and associated expenses for making a sale. This implies that the higher the price of the product, the greater is the associated cost and hence extended incentives. These compensation plans are designed in such a way that it benefits a company’s revenue plan. That way, even if the selling price is minimal, the overall revenue generated by the company is not affected.
Level-Based Compensation Plans
Not all direct selling representatives have similar skills. An organization should initially assess and analyse individual skills before formulating a compensation plan. Level-based compensation plans are depended on how good you are at selling. For example, if your revenue target is around Rs. 50,000 and you earn around 5% as commission, then the next time you surpass the target, a level-based compensation plan rewards you with a 7% hike in commissions.
Such commission plans help in boosting and uplifting team morale. Also, this way sales representatives can diversify their expertise by branching out into different products for a lucrative selling experience.
Quota Commission Plans
These are personalized and custom-made compensation plans. However, such plans are complicated to implement because most of the time it does not align with organizational goals. Every representative under a quota commission plan is given a target for about a few months. Upon achieving the said quota or target, the compensation percentages are multiplied based on individual performance and the extent of revenue generation.
Distributor Compensation Plans
Network selling compensation plans are entirely based on creating a network of individuals who can help you push your sales numbers. For instance, you can hire around 4 direct sellers (distributors) and assign responsibilities to sell products you purchased. If you have 40 units and they manage to sell all of them and maintain a solid revenue, you earn a part of their commission while they can focus on earning more by selling more. Your downlines can focus their attention on other product portfolios and assist your progress up the ladder.
QNET Compensation Plans
QNET is a globally renowned direct selling company that showcases a diverse range of products ranging from health & wellness, jewellery, and lifestyle. With a diverse commission structure, QNET has motivated and pushed independent entrepreneurs to kickstart their direct selling career. However, before associating with the brand, one has to read through specific details before signing the agreement. Below are some aspects that would help you understand the concept better.
Review and Understand the Business– Before partnering with QNET or any other direct selling organization, direct sellers need to examine their options and understand the business. This involves product descriptions, legal documents, application form details, documents that need to be furnished and your final objective. Make sure you align your individual goals and the organizational goals for a smooth transition.
Principal to Principal Contract– Direct sellers need to understand the terms and conditions and adhere to its in order to partner with QNET as a distributor. Read through the compensation plans/policies in order to avoid legal and financial hassles in the future.
Distributor Registration– Register as a distributor to QNET. Buy and use products from the company and sell them to gain lucrative commissions.
Recruit, Train and Sell– Direct selling is all about expanding your network. When working with QNET, you work with independent sellers, train them, and earn a part of the commission from the products that are sold. This way you can expand your network, focus on multiple deliverables, and grow as a potential business.
Focusing on Downlines– Once you have recruited people under, assist your downlines advance the ladder to maximize on their earnings for commission benefits. Therefore, considering the benefits of commission based direct selling, one can independently have potential business opportunities and be their own leader.
