Australian X-Up Plan is a kind of remuneration system that combines binary MLM and roll-up systems. This Plan allows distributors to build deep networks and also provides compensation based on performance of the team. This means that distributors not only receive incentives for their own efforts, but also from the teams they build. A unique feature of the Australian X-Up MLM Plan is the X-Up mechanism, where the system will roll up certain downline to the upline distributor when certain criteria are met, typically when a distributor is not performing at a certain level – usually in the first-level downline.
This system supports leaders in growing their downline, while also compensating them for creating solid teams. The Australian X-Up MLM Plan is based on a non-performing downline (those who either do not sell or do not make rank) rolling up to the next active upline distributor in an ever-flowing commissions plan.
How the Australian X-Up Plan Works:
1. Binary Structure with an "X-Up" Mechanism:
- As in a binary plan, distributors almost always have two downlines (one on the left and the other on the right). Most of the commissions earned by the distributor are generated by these downlines. On the other hand, if the downlines do not meet certain criteria for performance, they may be moved to the next upline.
- When a distributor misses sales quotas or performance measures (e.g. does not recruit or sell at all), the distributor’s position moves up, and their upline receives a new recruit.
2. Roll-Up System (X-Up):
- An X-Up happens when a downline fails to meet the necessary criteria. These distributors move up one upline to support the upline’s team.
- For example, if a second level distributor does not reach their sales goal, their position moves up one upline and assigns them a new recruit underneath their downline.
3. Binary Pairs and Commissions:
- Pairs are integral to the X-Up plan. A distributor creates a pair when they have one active recruit on both their left and right legs.
- Commissions are generated as a result of the pairs achieving sales or fulfilling other key indicators to earn commissions (e.g. recruiting new distributors or selling product).
- A distributor receives a predetermined commission from the sales volume produced by their active legs (left or right.)
4. Encouragement of Growth and Team Building:
- The X-Up mechanism encourages the upline to assist with their downline’s performance since non-performing or falling distributors now move to the next active upline.
- For leaders, they need to develop skills to train and motivate their downline to stay in the network and be successful.
Example of the Australian X-Up MLM Plan:
Let’s look at an example to understand how the Australian X-Up Plan functions:
1. Initial Setup:
Sarah joins the MLM system and recruits John and Alex.
Sarah’s team is now in a binary structure where she has John on her left leg and Alex on her right leg.
Sarah (Upline)
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John (Level 1) Alex (Level 1
2. The "X-Up" Mechanism:
John fails to meet the required sales or recruitment targets. According to the rules of the Australian X-Up Plan, John is “X-Up” and moved to the next active upline (which could be Alex).
Now John is under Alex, even though Sarah originally recruited him.
Sarah (Upline)
/ \
Alex (Level 1) John (Level 1) <- X-Up
3. Commissions and Growth:
Sarah still earns commissions based on the sales and activity in her left and right legs, even though John was X-Up to Alex.
Alex, now having John under his leg, benefits from the commissions of John’s sales and activity.
4. Continued X-Up and Network Growth:
The X-Up continues throughout the structure, and new distributors may be rolled up or moved to higher levels as they fail to perform or meet the requirements. The Australian X-Up plan encourages distributors to focus on supporting and nurturing their teams to avoid this, as a failure to perform results in an upline gaining a new recruit.
Advantages of the Australian X-Up Plan:
1. Incentivizes Team Building:
Since a distributor’s success depends on helping their downline perform, the X-Up mechanism promotes a cohesive team-oriented environment.
Distributors are encouraged to provide training and support to help their downline achieve success.
2. Avoids Stagnation:
The X-Up mechanism ensures that inactive or underperforming distributors don’t block the system’s potential. It allows active leaders to benefit from the performance of their downline, even when those below them are failing to contribute.
3. Fair Distribution of New Recruits:
The plan ensures that new recruits are placed with the most active and successful leaders, which may enhance overall network growth and revenue generation.
Underperforming distributors do not clog up the system, allowing the business to grow more smoothly.
4. Motivation for Performance:
The X-Up creates motivation for distributors to meet their targets and maintain sales, as their efforts are tied to their position in the network.
It encourages self-motivation as well as team-building.
Challenges and Considerations in the Australian X-Up Plan:
1. Possible Frustration for Downlines:
Some downline members may feel discouraged or demotivated if their position is X-Up to another upline, especially if they have not been supported adequately.
2. Balance Between Helping Downline and Personal Performance:
While upline distributors benefit from the X-Up mechanism, there is a need to balance between personal recruitment efforts and supporting team growth.
3. Administrative Complexity:
The X-Up system can be complex to manage, especially when it involves tracking performance, ensuring downline members are fulfilling targets, and moving them to the appropriate upline when they fail to perform.
4. Retention Issues:
Distributors who fail to meet performance goals may be frustrated by the X-Up, which can affect long-term retention rates.
Australian X-Up MLM Plan Tree Example:
Let’s visualize the Australian X-Up MLM Plan in a tree structure:
Sarah (Upline)
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John (Level 1) Alex (Level 1)
/ \
Jane (X-Up) Brian (Level 2)
/ \
Tim (Level 2) Kate (Level 3)
In this example:
- John failed to meet the targets and was X-Up to Alex, becoming part of Alex’s team.
- Sarah still earns commissions based on the sales volume of her team (which includes Alex, Brian, and others).
- Alex, who receives John in his team, earns commissions from John’s performance.
The Australian X-Up MLM Plan is a robust structure that helps promote active participation, team building, and support within a network. The X-Up mechanism ensures that underperforming distributors do not block the growth of the network and gives new recruits to active uplines. By balancing both binary and roll-up compensation strategies, this plan incentivizes distributors to focus on both recruitment and team performance while keeping the network fluid and dynamic.