Nikken Compensation Plan – Where Does the Money Go?

I have a new distributor, Herb, who has been on my Nikken team for one week as of today and he already has 395 PV. PV stands for Personal Volume. I thought I should write a quick post to show what the 395 PV means in the Nikken Compensation Plan.
First we need to know where that volume came from. In this case, the 395 PV comes from a 149 PV wholesale order that he placed for himself and a 246 PV retail order from a customer. Herb is at the Direct rank and earns only retail profit until he moves up one rank. Since the first order is at wholesale, he doesn’t make any money from it. The second order was at full retail though. The retail price was $307.50 and the wholesale price was $246, the same as the volume amount. He makes the difference between those, or $61.50. Not bad for your first week in Nikken.
Next there is me, his sponsor. I have moved up twice in rank since I started, so I am Executive and receive a 10% override on his CV, or Commission Volume. I don’t know exactly what was in those two orders, but it is safe to say that the CV amount will be at least 80% of the PV amount, or 316 CV. Since I receive 10% I will get $31.60 in my next check from his work so far.
Above me is my sponsor, Greg. He is Silver, two ranks higher than I am and he gets 20% override less my 10% override on everything that Herb does. That leaves him 10% of CV, so he will also get $31.60 in his next check.
Silver is the “breakaway” rank in Nikken which means that the override percentage stops at 20 and there is no more for those at the higher ranks. They do get Leadership Bonuses though for breakaways up to 6 levels deep depending on their rank.
Misty is next at Platinum and will receive an override as long as she is active. I will assume that everyone is active and qualifies to get paid. She will receive 6% on Greg’s Personal Group CV. Since Herb and I are not Silver yet we are considered a part of Greg’s Personal Group, so Misty will receive 6% of the 316 CV from Herb’s activity so far. She gets $18.96.
Next above Misty are Jack and Sheri. They are Royal Diamond and their 6% goes down 6 levels, so they too get paid 6% on Greg’s group. They get $18.96.
After Jack and Sheri comes Peter. At Diamond, his Leadership Bonus goes down 5 levels. That still includes Greg’s group, so he also gets $18.96.
Then comes another Diamond, Alan (who I had never heard of until I just looked up his name). Greg is only 4 levels deep to him, so he too get a piece of the pie at $18.96.
Dennis is a Royal Diamond, and one of the big names in Nikken. Like Jack and Sheri, he gets the Leadership Bonus on up to 6 levels, and Greg is at level 5. Dennis gets $18.96 (as if he would notice it 😉 ).
Then finally we can stop at Reid, another one of the big names in Nikken (I had no idea I was so close to these guys in the tree). As a part of Greg’s group, we are at the deepest level of what Reid get’s paid on. He gets the last $18.96 from Herb’s efforts.
If we add it all up, that is $238.46 that was paid out on $456.50 in sales receipts that Nikken collected. In case you don’t see where the $456.50 comes from, the 149 PV wholesale order was $149 because PV almost always equals the wholesale price in the US. Then there was the $307.50 retail order that we already talked about. Add those two orders together and you get $456.50.
That is just over 52% of the proceeds paid back out to the consultants, and that doesn’t include any other bonus programs, like the Lifestyle Bonus, that also has to come out of the proceeds.
I hope you found this helpful in seeing where the money in Nikken comes from and where it goes to. The only person in all of this that I do not know is Alan, and of the rest, Dennis is the only person I have not met face to face (yet).
Please share any comments you have below. I’d love to read them.
Wayne Woodworth
PS, I talked to Sheri after I wrote this and learned that there are only 4 more people above Reid to reach corporate, and one of those people is Dave, one of only 2 Royal Ambassadors in the US. We are fortunate on my team to be in a very shallow leg under Jack and Sheri because we have easy access to several levels of very active Diamonds and Royal Diamonds. Click here to learn more about what I’m doing and see if you might be interested in joining my team.
Update 11/9/2011 – Dennis and Reid were both in town last week at our local product launch and I had a chance to talk to both of them. I spent about 90 minutes talking to Dennis, and what an amazing guy he is. I was impressed two years ago when I had an hour with Reid. I really enjoyed talking with Dennis because we had more in common than I did with Reid. They are both awesome people, very supportive of everyone in this business, and very generous with their time. That is really my experience with just about everyone I have met in Nikken.
Update 6/9/2012 – Since reaching Silver last October I have had the chance to talk to Alan on the phone, the guy above Peter in my upline. So now I have met all but 3 people in my upline going all the way back to corporate.
Also, now that I am Silver, my team and I are no longer in Reid’s payline. I move up to 20% commission and my sponsor, Gregg, drops to the 6% leadership bonus on my team’s activity.