Generation plan in MLM is most reliable, long term and famous plan in network marketing. Also it is the first business plan to be introduced in India.
Not only in India but in whole world when MLM was introduced, it started with generation plan.
In this blog we will learn about all the common keywords, income distribution and types of incomes in it.
- Tree Structure
- Front Line and down line
- BV ( Business volume ) and PV ( Package Value )
- What is SBV, GBV and PGBV?
- Packages in Generation Plan.
- Retail Profit
- Performance Bonus
- Director Bonus
1. Tree Structure
Generation plan discussion begins with it’s tree structure.
It is having the simplest tree structure which any individual of any background can easily understand.
Here you have a great feature to join as many you want, unlimited width and unlimited depth.
There is no spill over, every members which joins under you have it’s own tree with no limitations until any company fix any.
2. Front line and down line
Just like binary plan, in generation plan also the concept works in similar manner.
Every member you sponsor directly in your network, your personal closings or you can say personal sponsors are your frontline.
In Generation plan, many companies like Vestige, Modicare etc. teach you to just handle your frontline and so on till unlimited depth. By this way the network is handled automatically.
Similarly downline is members below your level 1, your direct sponsors sponsor. They comes in your downline but in most cases you just have to handle and discuss scenarios with your frontline.
3. BV ( Business Volume ) and PV ( Package Value )
There is no definition or pre defined full form for BV and PV.
Here let’s discuss about BV with the help of example.
In generation plan, distribution, joining, income etc. everything is decided on BV ( Business Volume )
Example : If the product is of 130 Rs and it is denoted by 50 BV in company, so company wants to distribute it in BV format where BV have a specific value.
Yes, you got it right, company wants to separate product margin profit and do distribution through a independent term called ” BV “.
Now let’s understand PV by the help of an example.
Example : If company has set PV ( Package value ) as 20 rs. So if i buy 200Rs product then i will be assigned 10 PV. Then company can give equate BV to PV by some value eg, 10 PV = 5 BV. Then according to BV distributions, income and product value is decided in company.
4. What is SBV, GBV and PGBV?
Let’s discuss about the suffix which is used with these terms.
- SBV ( Self Business Volume ) : To name the value of self purchase in the company, SBV is introduced. Sometime to achieve or continue a specific income, you have to achieve 300 SBV or “XYZ” SBV.
- GBV ( Group Business Volume ) : To name the value of group BV in the company, GBV is introduced. GBV consists BV’s of you, your frontline and your down line. Sometime to achieve or continue a specific income, you have to achieve 300 GBV or “XYZ” GBV.
- PGBV ( Personal Group Business Volume ) : This is a concept which you will understand more deeply in below blog. Here only your personal group BV’s are calculated for incomes.
5. Packages in Generation Plan.
Highlight for this discussion is every business plan other than this have packages but here there is no package.
Generation plan have no joining amount, you can purchase any small product and you will subsequent benefit ( respected BV or PV ) and your joining is done.
Many MLM generation companies have package value nowadays to boost up or increase the sales of their product.
Example : Package amount of 2000/- where you will get amla juice, watch and home care products. Like this they make a package for joining.
Afterwards whatever you buy from company, respected BV’s will be assigned, distributed in upline and used for income distribution.
So we can say, in any pure generation company, there is no package or joining amount. You can purchase product and directly join the venture.
6. Retail Profit ( Types of income )
To understand retail profit you need to know about MRP, DP and BV.
MRP ( Maximum Retail Price ) as we all know every product have a specific amount on which it is sold.
DP ( Discounted price ) is the price on which generation plan companies give product to their distributors for their earning. They can afterward sell the products and earn amount equivalent to RP ( Retail profit ).
Example : MRP of a product is 100 rs and DP is 80 rs for the distributors who join the company then retail profit is 20 rs.
In most of the generation plan companies, retail profit is in percentage due to variations in products and MRP. Mostly it is between 5-20%.
7. Performance Bonus ( Types of income )
This income is loved by most of the networkers working in generation plan companies. Whenever you purchase something, you have a point in mind that you are going to get something.
Let’s consider this example. According to the BV’s mark you achieve you get performance bonus and similarly it is a certain percentage of BV.
BV you achieved.
Here SBV, GBV and PGBV comes in scene. When you achieve some BV by self purchasing like here in this example you personally are in 12% Bonus slab so you will get SBV bonus 12%.
Then comes your frontline BV. Percentage difference of your BV and your frontline BV of the amount of BV your frontline has achieved is calculated and rewarded to you.
Example : Frontline first member have 5% bonus so in SBV bonus he will earn 5% bonus. Imagine he achieved 500BV, so the difference of yours and his percentage that is ( 12-5 = 8 ) 8% of 500 BV will be awarded to you.
Similarly from second and third member in your frontline.
It is executed in two ways in different generation plan companies :
- Monthly distribution
- Carry forward
In monthly distribution, the difference of percentage in bonus is given in end of the month and next month again the story starts from 0. Whereas some companies keeps it lifetime that you can achieve this when you want.
8. Director Bonus
This is a unique tag or fund which company gives you on achieving highest slab of performance bonus.
Remember you get this on DP turnover or BV turnover not on MRP!
In other business plans we saw, royalty is equally distributed amongst all the royalty achievers. But here in generation plan, members will get royalty according to their potentials.
According to the BV they achieved.
Now let’s move on to the different kind of funds generation companies used to give.
- Car Fund
- House Fund
- Travel Fund
- Bike Fund
Generation plan is a slow income generator but a reliable, trustworthy and career suitable business plan so these incomes are used to motivate networkers.