Be Careful About Income Claims

September 11, 2023 By admin Leave a Comment

Sometimes new or young companies want to show how much income a representative can earn with a good downline. The problem is that at the moment, no representatives with a good organization exist yet.

What Should A Company Do?

I do not believe it is ever a good idea for a direct selling, referral marketing, or network marketing company to publish and distribute any calculations that show how much annual income a rep can earn with a “good” downline. Here are my reasons:

The calculations at this time would be theoretical, not real, because none of the reps is earning compensation on downline volume through the compensation plan.
If a rep does not achieve what the company says is a “good” downline, they may feel like a failure.
All income claims need to be presented with an Income Disclosure Statement which contains statistical information on what reps earn on downline volume.
Since there is no income history yet of earnings on downline volume, an Income Disclosure Statement cannot be generated.
With no Income Disclosure Statement available, there should be no income claims made or theoretical earnings provided whatsoever on downline volume.

Therefore, I advise you not to share any theoretical calculations with your reps. Moreover, I recommend that you prohibit your reps from making any income claims or sharing any theoretical earnings regarding your compensation plan unless and until the claims or theoretical earnings can be presented with an official Income Disclosure Statement.

In a year from when the compensation plan takes effect, the company will be in a position to produce its first Income Disclosure Statement and then the company should update and publish this document annually. This income claims limitation should be one of the many elements of your Policies and Procedures.

Jay Leisner, the President of Sylvina Consulting, is a top compensation plan and direct selling expert, a trusted adviser to new and established network marketing and party plan companies. For more than 30 years, Jay has enjoyed assessing and improving network marketing, party plan and referral marketing companies across the globe.

Jay Leisner and Victoria Dohr authored the top-rated book for new and young network marketing, referral marketing, and party plan companies, "Start Here: The Guide to Building and Growing Your Direct Selling Company".

Available in English and Spanish. This startup guide contains 250 pages of wisdom that will guide you through the right steps to start and continue on your journey to build a successful direct selling company.

You will save thousands of dollars and hundreds of hours of your time using the information you will read in our book.

In 1986, Jay began his career in direct selling by working for a major direct selling software provider. First as a software developer and later as a project leader and a business analyst, Jay worked closely with new and established network marketing and party direct selling companies to provide them with software solutions to meet their unique requirements.

Jay contributed in many ways to the success of large implementation projects for many companies. Jay also worked with dozens of smaller companies to assist each of them in various capacities to provide them with the systems they needed to help their businesses to grow faster.

Along the way while working with them, he learned the secrets of successful direct selling companies and the challenges faced by them. In true entrepreneurial spirit, Jay’s decision in 1999 to start Sylvina Consulting as a direct selling consulting company was driven by what he saw was a need for answers, advice, and solutions.

In 2004, 2006, 2009, 2014, and 2018, Jay gave presentations on compensation plans, recognition, and field leadership development at conferences held by the US Direct Selling Association.

He traveled to South Africa in 2015, 2016, and 2017 to conduct workshops on compensation plan design and recognition programs for member companies of the South African Direct Selling Association.

In 2017, Jay spoke at the Canadian Direct Sellers Association Meeting on the importance of recognition.

More than just a compensation plan expert, Jay is exceptionally skilled at advising new and established companies on business strategies. Before offering advice or solutions, he asks important questions to understand each client’s specific concerns and goals.

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