Stair Step Breakaway Plan

The Stair Step Breakaway Plan was one of the original network marketing compensation plans and is still used by a number of foundation companies today. Given that this structure has been around for many years and has a proven track record it is still commonly implemented by new start up companies, however, just like all compensation structures whilst there are some advantages to this compensation structure, there are also a number of disadvantages which will be discussed on this page.

Note: If you’re not already familiar with compensation plan terminology we suggest you review how to understand a compensation plan first.

The name Stair Step Breakaway is derived from the concept that distributors climb the ladder of success and when they reach a certain level they are allowed to break away from their upline distributors and run their organisation independently. As distributors break away from their upline this allows them to earn a greater commission.

The Stair Step Breakaway Plan shares a number of similarities with the Unilevel Plan in that each distributor is only allowed to sponsor one level of distributors (frontline). Whilst there is no limit to the width (number of frontline distributors) in which you can sponsor, the stair step breakaway plan offers limited incentive for teamwork within your organisation and the competition between crossline distributors can make it difficult to recruit close friends and family into this structure.

As with all network marketing companies, the main goal for each business associate is to distribute the parent company’s products. This is best achieved in the stair step break away plan by recruiting as many frontline distributors as you can, who personally consume and /or sell your company's product and then encourage them to do the same.

The Breakaway

Breaking away from your upline has numerous benefits to the individual distributor (such as earning a higher commission rate), however it can have a serious negative impact to the organisation in which you break away from. By breaking away, the volume that your upline previously received from you, no longer flows through your upline’s business at the same rate. For your upline, it is like losing their best customers.

As distributors breakaway, the original sponsor is still entitled to earn a small percentage from each break away distributors's efforts. This is referred to as an override commission. Each breakaway organisation is referred to as a generation and although distributors are entitled to earn an override commission on all of their breakaway generations, unfortunately this override commission is only a small fraction in comparison to the commissions they were earning previously.

Another set back with the Stair Step Breakaway Plan is that although you may have reached the level where you are allowed to break away from you upline, allowing you to earn greater commission, your organisation will grow and distributors in your downline may also qualify to break away from you. Although initially having a distributor break away from your organisation can put a dent in your short-term income, creating a number of breakaway organisations can help you to earn a long term residual income and re-focus your time towards developing a frontline of future leaders.

In general, this plan is most suited to those distributors who are confident in their ability recruit new distributors and have good management skills. For those looking at this compensation plan for the first time, one thing to consider is that you may experience a lack of support from your upline distributors once you are established and that you will be working in competition with other crossline distributors. Whilst the potential commissions can be very rewarding with this compensation structure, the Binary Plan and the Matrix Plan are generally considered more friendly and supportive for newcomers.

In years gone by, some companies who used the Stair Step Breakaway gave the industry a bad name. In these particular companies the group sales volume (PGSV) were set at unrealistic targets, where new distributors were encouraged to purchase extra product to assist their upline to earn a commission. Consequently, a lot of distributors ended up being stuck with stock they could not sell. High hopes were drummed into some of the distributors that lead them into financial trouble. Fortunately, to our knowledge, this rarely happens today. If it does, we suggest you try a new strategy.

Another set back to the Stair Step Breakaway Plan is that it is hard for many to understand and even harder to try and explain it to your prospects. It was not until we had reached a certain level of success with this plan that we thoroughly understood how it worked. Looking back, we probably understand it better since being involved with other plans and learning the difference.

Without being biased, the Stair Step Breakaway Plan does have a number of advantages. It has a good track record, which makes it attractive to new companies looking for a proven business model. In particular, the Stair Step Breakaway Plan works in favour for those distributors that have good selling or recruiting skills. Some might argue that this compensation plan is more suited to the full timers, however recent advancements in the industry, particularly the internet, can make it just as friendly to the part-time distributors.

Although the compensation plan should always be considered when joining a network marketing company, we strongly recommend that you also consider the products, the practicality of the business model and whether the company has a proven track record before making your final decision.

What is the Best Compensation Plan?

Learn more about the Binary Plan.

Learn more about the Unilevel Plan.

How does the Forced Matrix Plan compare to other compensation plans?

Learn how to understand network marketing compensation plans and compare the different structures.