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Home       Forever Living Products    Network Marketing Plan

The Forever Living Products (FLP) Network Marketing Plan is an excellent plan: it aims to reward distributors generously at every level of the business. There is no fee to sign up as an FLP Distributor, there are no annual fees to pay and it is not necessary to hold stock. Everyone in the Distributor Level progression from Assistant Supervisor to Manager buys their FLP products at the same 30% discounted price. The additional monthly Personal Volume Bonus varies from 5% to 18% depending on Distributor Level position along the progression starting from Assistant Supervisor and is calculated on the Retail Prices of all purchases each month. Hence the total profit on purchases will vary from 35% at the Assistant Supervisor level to 48% at the Manager level. In addition, as the network team grows, a Group Volume Bonus(Team-Leading Bonus) is applied according to the Distributor Level in the team. It is this Group Volume Bonus that provides the drive power of the marketing network engine. The colour coded graph above displays the basic structure and mechanism of the marketing plan up to Manager Level [Advanced Manager Levels are discussed in Part 3 of this article]. The following discussion illustrates the Distributor Level progression as a function of Case Credits over a period and the corresponding Personal Volume Bonus(PVB) and Group Volume Bonus(GVB).

 

DISTRIBUTOR LEVEL PROGRESSION

1.Independent Distributor: You join the company as an Independent Distributor by signing the single-page Application Form, which is countersigned by your Sponsor into the FLP business. You receive your unique FLP identity number and you buy products from your Sponsor at the Retail price.

2.Assistant Supervisor: To go from Independent Distributor to Assistant Supervisor you must purchase products to the value of 2 Case Credits (see explanation of Case Credits - CCs - below). You might buy the Touch of Forever Combo Box, or two of the Mini-Combos (either option will immediately qualify you), or loose products over a period of time. At this point you receive the Authorisation to Purchase (ATP) at the 30% discount price. Thereafter you will receive a monthly Bonus cheque direct from FLP representing 5% PersonalVolume Bonus on the Retail Prices of all purchases in the previous month.

3. Supervisor: You reach Supervisor level when you and the members of your team purchase products totalling 25 CCs over any two-month period. At this level the Personal Volume Bonus on all the products you purchase is 8% and you receive an additional Group Volume Bonus(Team-Leading Bonus) of 3% on all products purchased by your Assistant Supervisor team members. If someone in your team becomes a Supervisor, you cease earning the Group Volume Bonus on their team until you progress to Assistant Manager level.

4. Assistant Manager: To rise from Supervisor to Assistant Manager you and the members of your team purchase products totaling 75 CCs over any two-month period. At this level the Personal Volume Bonus on all the products you purchase is 13% and you receive additional Group Volume Bonus(Team-Leading Bonus) of 5% on all products purchased by frontline Supervisors in your team, and 8% on frontline Assistant Supervisors.

5. Manager: To make Manager you and the members of your team purchase products totaling 120 CCs over any two-month period. At this level the Personal Volume Bonus on all the products you purchase is 18% and you receive additional Group Volume Bonus(Team-Leading Bonus) of 5% on all purchases by frontline Assistant Managers in your team, 10% on frontline Supervisors, and 13% on frontline Assistant Supervisors.

It is clear that the Group Volume Bonus kicks in at the Supervisor level and that higher levels along the Distributor Level progression accrue an increasing Group Volume Bonus from levels below. The Group Volume Bonus is the positive feedback mechanism which provides the incentive to maintain, develop and expand the 'downline' network.


CASE CREDITS, PROFITS & BONUSES - Examples

Case Credits (CC): The international currency unit used by FLP for calculating Distributor turnover and bonuses is the Case Credit. Every product in the FLP range has an assigned Case Credit value, which is related to the monetary value of each item. In the UK, the wholesale value of 1 Case Credit = 94.12 excluding vat. The corresponding wholesale vat inclusive value of 1 Case Credit = 110.59. This gives the retail vat inclusive value of 1 Case Credit = 157.99 taking the standard 30% discount price.


Profits and Bonuses: Your Bonus Cheque is based on the retail value of all purchases you personally make in a month and the total retail value of purchases made by your network group. Your Total Profit consists of three components: the Baseline Profit(BP) which is defined as the difference in value between all retail and wholesale purchases at the Vat inclusive value; your Personal Volume Bonus(PVB) percentage contribution and your Group Volume Bonus(GVB) percentage contribution. Both the Personal Volume Bonus and Group Volume Bonus contributions are calculated on the Vat exclusive retail value of purchases. Your total profit is the sum these three components:

(1) Baseline Profit (BP) = [ R - W ] = 30%R __where R and W are the total Vat inclusive Retail and Wholesale value of purchases you make respectively and 30% is the standard discount price whichever position you are in the Marketing Plan.

(2) Personal Volume Bonus(PVB) = X%[R/1.175] __ where X% is the personal volume bonus percentage which varies on distributor level over the range {5%, 8%, 13%, 18%}.

(3) Group Volume Bonus(GVB) = Y%[R*/1.175] __ where Y% is the network team or group volume bonus percentage which varies as a function of distributor level over the range {3%, 8%, 13%} and R* is the total Vat inclusive Retail value of all purchases made by everyone in your network team below your distributor level.

Consequently,

Total Profit = 30%R + X%[R/1.175] + Y%[R*/1.175]

The following practical example illustrates the contribution of each of the components in generating the total profit.

Personal Volume Bonus: Say you spend 1050 wholesale on products (Vat inclusive): their retail value is 1500 (Vat inclusive), so this 30% discount price generates sales which amount to a Baseline Profit(BP) of 450 - whichever position you are in the Marketing Plan. However, your Personal Volume Bonus(PVB) will vary with your marketing plan position and the corresponding value of the personal volume bonus percentage X%. So, the Vat exclusive term X%[R/1.175] = X%[1500/1.175] = X%[1276.60]. The profit obtained from the Personal Volume Bonus and Baseline Profit terms are as follows:

................................................ X%............................ PVB.............. BP......................

Assistant Supervisor: .........5% on 1276.60 = .63.83 plus 450 = 513.83

Supervisor:.............................8% on 1276.60 = 102.13 plus 450 = 552.13

Assistant Manager:.......... 13% on 1276.60 = 165.96 plus 450 = 615.96

Manager:............................ 18% on 1276.60 = 229.79 plus 450 = 679.79


Group Volume Bonus: Of course, from Supervisor onward you will be making additional Group Volume Bonus(GVB) based upon the retail value of purchases by everyone in your network team below your Distributor Level. For simplicity, let us assume that the total retail Vat inclusive sales value of all the frontline Assistant Supervisors in your team is 2350 (Front line distributors are those distributors directly signed up under you). So, the Vat exclusive term Y%[R*/1.175] = Y%[2350/1.175] = Y%[2000]. The profit obtained from the Personal Volume Bonus, the Group Volume Bonus and Baseline Profit terms are given below. This is how it will affect your profits if your Distributor Level is Supervisor or higher:

 

................................................ X%............................ PVB................Y%..................... GVB.......... BP.....................

Supervisor:........................... 8% on 1276.60 = 102.13 plus _3% on 2000 = .60 plus 450 = 612.13

Assistant Manager:.......... 13% on 1276.60 = 165.96 plus _8% on 2000 = 160 plus 450 = 775.96

Manager:............................ 18% on 1276.60 = 229.79 plus 13% on 2000 = 260 plus 450 = 939.79


This example shows only the increase in Personal Volume Bonus and GroupVolume Bonus for the same level of frontline Assistant Supervisor turnover along the distributor progression (Supervisor => Assistant Manager => Manager). It does not take into account that Assistant Managers will have further contributions from their frontline Supervisor team turnover and that Managers will have contributions from their frontline Supervisor team turnover and from their frontline Assistant manager team turnover. A more detailed example of the team or group volume bonus based on frontline distributors at different levels with a more complex team structure will be  given in Part 5.

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Wale Adeleke   Tel: 234 803 318 1698      Email     ID:234000671061  

Independent distributor of Forever Living Products 

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