Keep it simple.
The executive pool is not exactly profit sharing, but commission sharing, which is very similar. Most people understand the concept of profit sharing.
To explain commission sharing, you could use this example. If an art dealership has 5 salespeople, each earning 10% commission on their own sales, they compete to get customers when they walk into the dealership. If they get 6% on their own sales, plus 1% on the sales made by each of the other 4, the total commission paid is the same (6% plus 4 times 1% = 10% per sale), but the salespeople are also motivated to help each other close their sales if needed, as they will make money from the sale as well. As a result, the team spirit will be much better, and the total sales volume will probably be higher as a result.
This is how SFI do it;
- 40% of all commission volume generated by sales made through the TripleClicks site are put into a pot.
- That pot is then divided among those eligible to share in it (EA and above). for example, if you have 2,000 eligible VP you get 2,000 shares of that pot. If you have 100,000, you get 100,000 shares. And so on.
Eligible VP are VP you have earned yourself, plus any 'matching' VP from your down-line, which are based on your rank and theirs. It gets a bit more complicated if you try to explain the precise details of eligibility, so refer to the compensation plan for this.
As a rule of thumb, just advise them to aim for the highest rank they can realistically sustain, and try to help each member of their team do the same, and they will be fine.
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Keep it simple.
The executive pool is not exactly profit sharing, but commission sharing, which is very similar. Most people understand the concept of profit sharing.
To explain commission sharing, you could use this example. If an art dealership has 5 salespeople, each earning 10% commission on their own sales, they compete to get customers when they walk into the dealership. If they get 6% on their own sales, plus 1% on the sales made by each of the other 4, the total commission
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