Lesson 2: Commission Math and Payout Mechanics

If Alice sells $100 and it counts toward both her personal volume and her upline's volume, you might accidentally pay commission twice. Solution: define clearly whether upline volume includes or excludes downline volume. Most plans use 'total volume' (includes all downline) for commission tiers, but only direct sales for personal commission.

A distributor's upline is recorded wrong in your spreadsheet. Their commission goes to the wrong person. Solution: maintain a clean upline/downline tree. Update it every time someone recruits. Audit it monthly.

Commissions of $12.50 rounded to $12 or $13. Over 100 distributors, you lose or overpay hundreds. Solution: decide rounding rule upfront (round down, round to nearest, or keep cents). Apply it consistently. Document it in your compensation plan.

An inactive distributor's sales still count. Their upline earns commission on dead weight. Solution: set a minimum activity threshold (e.g., one sale per quarter) or exclude inactive distributors from volume calculations.