Orvanna International
The Orvanna
Compensation Plan
This is the compensation plan for the Conductors of Orvanna, the company that sells artificial intelligence (AI) agents by subscription. It sets out, in full and with the arithmetic in plain sight, how a Conductor is paid: three earning layers, one qualification gate, five ranks, and a hard ceiling on what any single order can ever pay.
Orvanna is a demonstration company. Its products, its Conductors and the organisations shown in this document are not real, and no money is paid to anybody under this plan. Nothing here is an offer to enrol, an offer to sell, or a contract. Section fifteen states this in full.
Contents
What is in this document
Read it in order once. It gives you the words first, then the volume, then the single gate that decides whether anybody is paid at all, and only then the money. Each section opens with a drawing, and the words underneath the drawing say the same thing again, so nothing depends on your reading a picture correctly.
There is a companion page, the Orvanna compensation plan page. It covers the same plan and separates what is running today from what is only modelled. This document does not draw that line, so read that page for it.
Some of the drawings are wider than a phone screen. Those scroll sideways inside their own frame, and the page itself never does. On paper every drawing is fitted to the page.
- 1How you earn, in one page
- 1AWhere each part of this plan comes from
- 2The words, defined before they are used
- 3Volume, and the eighty percent rule
- 4The qualified month: the single gate
- 5The organisation every example uses
- 6Layer one: the five paid levels
- 7Layer two: the Builder override
- 8Layer three: the second-leg bonus
- 9The rank ladder
- 10The twenty percent ceiling
- 11Nothing carries over
- 12A complete month, to the cent
- 13What this plan never pays for
- 14Key terms
- 15Legal notice and income disclosure
How to read the drawings
Colour carries meaning in every drawing in this document, and it means the same thing every time.
- Green is layer one, level pay. The 10, 5, 5, 3 and 2 percent paid up the levels.
- Blue is layer two, the Builder override, and it also marks anybody holding Builder rank.
- Teal is layer three, the second-leg bonus, and it also marks the leg the bonus is paid on.
- Amber is the ceiling, the 20 percent of the price that no order can pay beyond.
- Red is what is not paid: an unqualified month, a level out of reach, or a claim the ceiling left nothing for.
Nothing in this document depends on telling those colours apart. Every drawing also labels its parts in words, and every rule shown in a drawing is written as a sentence somewhere in the text.
Acronym key, used throughout and spelled out again on first use in the body: artificial intelligence (AI), Personal Volume (PV), Sales Volume (SV), Commissionable Volume (CV), Team Volume (TV).
Section one
How you earn, in one page
Orvanna sells artificial intelligence (AI) agents by subscription. Conductors subscribe to agents and introduce other people who do the same. The plan pays Conductors on the volume their organisation buys, through three layers that all draw from the same capped pot of money.
That is the whole plan in one order. The rest of this document explains each of the four payments, why each person qualified for it, and what happens when the ceiling is reached.
The plan in six sentences
- Everything your account buys in a calendar month is added into your Sales Volume (SV), and 80 percent of that becomes Commissionable Volume (CV), the only figure any percentage is applied to.
- If your own SV reaches 100.00 in a month, you are qualified, and qualifying is the only gate there is.
- Layer one pays you 10 percent of the CV of everybody you personally sponsored, then 5, 5, 3 and 2 percent of the next four levels below them, as deep as your rank reaches.
- Layer two pays you 1.5 percent of the entire group volume of any Conductor below you who holds Builder rank this month, and 1.0 percent again on a second generation of Builders below those.
- Layer three pays you 2.0 percent of your second-strongest leg's volume, stepping to 2.3 percent at three active legs and 2.5 percent at four or more.
- No order ever pays out more than 20 percent of its price across all three layers combined, and every layer is recalculated from scratch every month.
The one sentence to hold on to. Layers two and three are funded entirely by money layer one did not claim. They redirect the plan's existing ceiling toward people who develop other people; they do not raise it.
Section 1A
Where each part of this plan comes from
Nothing in this plan is new arithmetic. Every mechanism in it has decades of industry service, and anybody who knows this industry should recognise every part on sight. What is new is the assembly, and that each part is fitted here with its best-known failure mode absent from the arithmetic rather than forbidden by a rule.
The five parts, and what each one leaves behind
| Mechanism | The family it comes from | The known failure mode | Why it is not present here |
|---|---|---|---|
| Layer one, the unilevel spine | The unilevel, the industry's most common chassis. More plans are built on a unilevel base than on anything else, because it is the easiest to explain and the hardest to game. | Passivity toward development. A pure unilevel pays on whatever depth happens to exist and pays nothing extra for turning a recruit into a leader, so it under-rewards the one behaviour that grows an organisation. | Layers two and three exist to pay for development explicitly. The spine itself is untouched, so it keeps the thing that made it worth using. |
| Layer two, the Builder override | Generation overrides, the core of generational and breakaway plans and the oldest family in the industry. Leaders earn on the groups of the leaders they develop, generations deep. | Volume theft. In a classic breakaway, promoting a leader removes their whole group from your volume, so the plan punishes the promotion it says it wants and the field learns to hold its best people back. | There is no breakaway here, stated as a rule in section seven. No volume ever leaves anybody's group, so developing a Builder is addition with no subtraction, and no rank anybody below you reaches costs you a unit of volume. |
| Layer three, the second-leg bonus | The binary's proven engine. Paying on the weaker leg is the most effective known driver of teamwork and balance, which is why that family dominates the fast-growth end of the industry. | Placement gaming and carryover. Binary plans invite strategic placement, spillover lotteries and purchased positions in the tree, and they bank volume that carries forward. | No placement tree exists here at all. Legs are the real sponsorship organisation, exactly as it happened, so there is nothing to place and no spillover to wait for, and nothing carries over from one month to the next. Sections eight and eleven. |
| The leg-count multiplier | Standard leadership-bonus structure. Stepping a bonus on the count of developed legs is how leadership pools and rank bonuses have worked for decades. | Cliff effects. Large steps at round numbers produce buying at the end of a month to cross a threshold. | The steps are deliberately shallow, each one requires another active leg rather than a purchase, and section eight shows the arithmetic that makes the step never worth chasing. |
| The twenty percent ceiling | Standard solvency discipline. Caps and payout governors are long-standing practice in this industry. | Cost drift. Uncapped plans see the payout ratio creep upward as an organisation matures, discovered in the accounts months later and corrected by emergency changes that cost the field its trust. | The ceiling is enforced per order, inside the calculation, before anything is paid. It is not a target reviewed afterwards, so drift is bounded by construction. Section ten. |
Stated in one sentence. This is a unilevel chassis carrying the development engine of the breakaway family without the breakaway, the balance engine of the binary family without the binary tree, and a standard leadership multiplier without the cliffs, all inside a hard ceiling.
Section two
The words, defined before they are used
Every term in this plan describes a position in one ordinary organisation chart. There is no second tree, no placement tree, and no position that can be bought, moved or held for you.
The terms this plan uses
| Term | What it means |
|---|---|
| Conductor | Somebody who has enrolled and holds a place in the organisation. Every person this plan pays is a Conductor. |
| Member | The name of the first rank. It requires enrolment and nothing else. |
| Customer | Somebody who buys agents through a Conductor without joining. A customer never qualifies, never holds a rank and never earns. |
| Sponsor | The one person directly above you, the person who enrolled you. |
| Frontline | The people you personally sponsored, and only those people. |
| Downline | Everybody below you at any depth. |
| Level | The plain distance in the organisation from you down to somebody below you. Your frontline is level 1, their frontline is level 2, and so on. |
| Leg | One frontline person plus that person's entire downline, treated as a single branch. |
| Group | A Conductor together with their whole downline at every depth. Used for the Builder override in section 7. |
| Generation | A counting unit used only by the Builder override. Generations are marked out by the Builders in a line, not by levels. Section 7 explains the count. |
| Personal Volume (PV) | The volume printed on a product, which at Orvanna always equals its price in dollars. |
| Sales Volume (SV) | The total PV of everything booked to your account in one calendar month, whether you bought it or one of your customers did. |
| Commissionable Volume (CV) | 80 percent of your SV, rounded to two decimals. Every percentage in this plan is applied to CV and to nothing else. |
| Team Volume (TV) | The SV of everybody strictly below you, added across your whole downline. It never includes your own SV. |
| Qualified month | A month in which your own SV was 100.00 or more. |
| Active leg | A leg whose frontline person is qualified this month. A leg with a large downline but an unqualified frontline person is not active. |
| Rank | The title you hold for one month, recomputed from scratch every month, which sets how many levels deep you are paid. |
| Paid depth | How many levels of your downline you are paid on. Member 1, Builder 2, Leader 3, Director 4, Executive 5. |
| Breakage | Commission the percentages describe but nobody receives, because the person who would have received it failed a gate. It is paid to nobody and held for nobody. |
Team Volume excludes you. If your downline sold 2,500.00 and you personally sold 200.00, your TV is 2,500.00, not 2,700.00.
A leg is judged by the person at its head. The plan asks whether the frontline person is qualified, not whether the branch produced volume. That is deliberate: a rank is built by helping the people you personally sponsored stay active, not by sitting above one lucky branch.
Section three
Volume, and the eighty percent rule
Three numbers do all the work: Personal Volume on the product, Sales Volume on your account, and Commissionable Volume, which is the only one any commission is calculated from.
Why 80 percent and not 100
Commissionable Volume is deliberately smaller than Sales Volume. The 20 cents in every dollar that Commissionable Volume leaves behind never enters the commission calculation at all. That is why the plan can state an absolute ceiling of 20 percent of the price rather than 20 percent of Commissionable Volume: the five level rates add to 25 percent of Commissionable Volume, and 0.25 multiplied by 0.80 is 0.20, so 20 percent of the money that came in the door.
Check the arithmetic yourself on a $100.00 order. Commissionable Volume 80.00. The five levels pay 8.00, 4.00, 4.00, 2.40 and 1.60, which add to exactly 20.00.
What carries volume
- Domain agents, $100.00 a month, 100 PV. Payment Agent, Shipping Agent, Pricing Agent, Inventory Agent, Marketing Agent, Tax Agent.
- Support agents, $50.00 a month, 50 PV. Software Engineer, Quality Assurance, Secretary, Chief Executive, Accounting, Customer Care.
- Bundles and packs, $200.00 to $800.00 a month, 200 to 800 PV. The Manager Agent bundle at $200.00 and 200 PV; the Ignition Pack at $200.00 and 200 PV; the Momentum Pack at $400.00 and 400 PV; the Constellation Pack at $800.00 and 800 PV. A bundle or pack carries its own Personal Volume once, not the volume of the agents inside it. Bought once instead of monthly, each costs ten times its monthly price and carries ten times its monthly Personal Volume.
- Customer purchases. An order placed by a customer through a referring Conductor books to that Conductor's account, and its full Personal Volume counts in that Conductor's Sales Volume.
A subscription grants its Personal Volume every month it is active. Cancel it and the volume stops from the cancellation month forward. Months already billed keep their volume.
One-time purchases are recognised across ten months. Volume bought once, rather than as a monthly subscription, is recognised at one tenth a month for ten months. A $2,000.00 one-time purchase, which is what the Ignition Pack costs when it is bought once rather than monthly, arrives as 200 PV a month for ten months, not 2,000 in a single month. This rule exists so that no single large purchase can lift somebody's volume or their team's volume into a rank for one month.
Section four
The qualified month: the single gate
There is one gate in this plan and it is the same gate for everything. Your own Sales Volume must reach 100.00 in the calendar month.
The rules of the gate
- Qualified means Sales Volume of 100.00 or more in that calendar month. That is the whole test.
- The same number does two jobs. It decides whether you can be paid, and it decides whether your leg counts as active for the person above you.
- Exactly 100.00 qualifies. Every threshold in this plan is stated as "or more", never as "more than".
- It resets every month. A qualified March does nothing for April. There are no grace months.
- Volume sold counts, not only volume bought. Customer orders booked to your account count toward your Sales Volume, so a Conductor can qualify on sales to other people without buying anything themselves.
Why that last rule matters. A plan where the only way to qualify is to buy the product yourself rewards buying rather than selling. Orvanna's gate can be met entirely by customer sales, so a Conductor who sells and never subscribes is qualified on the same terms as one who subscribes.
Section five
The organisation every example uses
Every worked example from here to the end of this document uses the same ten person organisation, so you never have to learn a new cast. It is drawn once, here, with each person's volume on them.
Two cases worth noticing before the money starts.
M2 is qualified, has two frontline people and 500.00 of Team Volume, and is still a plain Member. One of those two legs is headed by M5, whose own Sales Volume is 50.00, so that leg is not active. The 300.00 of volume sitting under M5 does not rescue it, because a leg is judged by the person at its head.
M8 is qualified but has no active legs at all, because M8's only frontline person, M10, sold 50.00. M8 still earns, because being paid at level 1 requires only that M8 is qualified. Rank and earning are two separate tests.
Section six
Layer one: the five paid levels
This is the layer that produces most of the money. It pays you a percentage of the Commissionable Volume of everybody below you, level by level, as far down as your rank reaches.
The rule
You are paid 10 percent of the Commissionable Volume of every Conductor you personally sponsored, then 5 percent at level 2, 5 percent at level 3, 3 percent at level 4 and 2 percent at level 5, for as long as you are qualified that month. Whether the person below you is qualified makes no difference. If they bought, you are paid on it.
Worked, every step: your frontline
You sponsored somebody. This month they subscribed to the Marketing Agent and the Customer Care agent.
- Marketing Agent $100.00, 100 PV. Customer Care $50.00, 50 PV.
- Their Sales Volume for the month is 100 + 50 = 150.00.
- Their Commissionable Volume is 0.80 x 150.00 = 120.00.
- You are qualified, and level 1 is inside every rank's reach, so both gates pass.
- Your commission is 10 percent x 120.00 = 12.00.
You earn $12.00 on their $150.00 of buying. As a fraction of what they actually spent that is 8 percent, not 10 percent, because the 10 percent applies to Commissionable Volume rather than to the price. This is the most common misreading of any plan of this kind, so it is worth saying once more: every percentage in this plan is a percentage of Commissionable Volume, and Commissionable Volume is 80 percent of the money.
The same rule when the person below is not qualified
- They subscribed to one support agent only. Their Sales Volume is 50.00, their Commissionable Volume is 40.00.
- They are not qualified themselves, because 50.00 is below 100.00. That does not matter here.
- Your level 1 commission is 0.10 x 40.00 = 4.00.
They earn nothing that month and their leg does not count as active for your rank, but their volume still pays you in full.
Depth: what your rank reaches
Worked, every step: depth
You are a Builder, so your reach is two levels. Underneath you: frontline person A subscribed to twelve domain agents and six support agents; frontline person B subscribed to two support agents; and person B sponsored person C, who subscribed to one support agent.
- A's Sales Volume is (12 x 100) + (6 x 50) = 1,500.00, so A's Commissionable Volume is 1,200.00.
- B's Sales Volume is 50 + 50 = 100.00, so B's Commissionable Volume is 80.00.
- C's Sales Volume is 50.00, so C's Commissionable Volume is 40.00.
- A is at level 1: 0.10 x 1,200.00 = 120.00.
- B is at level 1: 0.10 x 80.00 = 8.00.
- C is at level 2: 0.05 x 40.00 = 2.00.
- Your total is 120.00 + 8.00 + 2.00 = 130.00.
Now change one thing and nothing else. You are a plain Member instead of a Builder, so your reach is one level. C is out of reach. You earn 120.00 + 8.00 = 128.00, and the 2.00 is breakage: it is not pushed to the person above you, and it is not held for later.
There is no compression in the plan this document describes. If somebody in your line is unqualified, the people below them do not slide up into their place. An unqualified person is a wall in the organisation, not a hole. Whatever their level would have paid is paid to nobody.
Section seven
Layer two: the Builder override
Level pay is indifferent to whether the people below you become leaders. Layer two is the part of the plan that pays you specifically for developing one. When a Conductor below you holds Builder rank this month, you are paid on that Conductor's entire group, however deep it runs.
What gets paid
A Conductor's group is that Conductor plus their whole downline at every depth, with nothing excluded. Group volume is the Commissionable Volume of everybody in it.
For each Conductor below you who holds Builder rank or above this month, you are paid 1.5 percent of that Builder's group volume as a first-generation override, or 1.0 percent as a second-generation override, depending on how many Builders sit between you and them. You must be qualified yourself to receive either.
How the two generations are found
Generations are not levels. They are counted by the Builders standing in the line between you and the Builder being paid on. Starting at that Builder, the plan walks upward toward the top of the organisation carrying a counter that begins at zero, and at each person it does two things in this order: first it decides whether that person is paid, then it decides whether that person increments the counter.
- If the person is qualified and the counter is 0 and no first generation has been assigned yet, that person receives the first-generation override at 1.5 percent.
- If the person is qualified and the counter is 1 and no second generation has been assigned yet, that person receives the second-generation override at 1.0 percent.
- Then, if that person holds Builder rank or above, the counter goes up by one.
- The walk stops when the counter reaches 2, or when it reaches the top of the organisation.
An unqualified person is passed over completely: they receive nothing and they do not move the counter. One person can collect a first-generation override on one Builder and a second-generation override on a deeper Builder in the same month.
No breakaway: developing a Builder never costs you volume
Worked, every step, in the ten person organisation
In the organisation drawn in section five, two people hold Builder rank or above this month: M1, who is a Leader, and M3, who is a Builder.
- Take the Builder, M3. M3's group is M3 together with M7, M8 and M10.
- M3's group volume is 80.00 + 1,200.00 + 80.00 + 40.00 = 1,400.00.
- Walk upward from M3. The first person is M1, who is qualified, and the counter is 0, so M1 takes the first-generation override.
- M1's override is 1.5 percent x 1,400.00 = 21.00.
- M1 holds Leader, which is above Builder, so the counter becomes 1. M1 is at the top of the organisation, so the walk stops. There is no second generation here.
- Take the other Builder-or-above, M1. Nobody sits above M1, so M1's own rank produces no override for anybody.
The whole of layer two in this month is therefore one payment: 21.00 to M1.
Note what M1 is paid on. M1 already earns level pay on M7's large volume through the ordinary levels. The override is computed on M3's group as a whole, because M1 developed M3 into a Builder. The two are separate payments for separate things, and section ten shows that both together still fit inside the same ceiling.
Section eight
Layer three: the second-leg bonus
The most reliable way a compensation plan can reward teamwork is to pay on the weaker side rather than the stronger one. Layer three does that, and it does it on the ordinary organisation chart, because this plan has no second tree to place anybody in and nothing that carries forward from one month to the next.
What gets paid
A leg is one person you personally sponsored plus that person's entire downline. A leg's volume is the Commissionable Volume of everybody in it, qualified or not, because volume is volume. A leg is active when the person at its head is qualified this month.
Rank your legs by volume, highest first. If you are qualified and at least two of your legs are active, you are paid a bonus on the volume of your second-strongest leg. The rate is 2.0 percent with two active legs, 2.3 percent with three, and 2.5 percent with four or more.
Two details a careful reader will ask about
Legs are ranked by volume across all of your legs, while eligibility and the rate step count only active legs. So a Conductor with two active legs and a third, large, inactive leg is paid on whichever leg is second by volume, whichever that turns out to be. Ties are broken by the identifier of the person at the head of the leg, so the same month always produces the same answer.
The rate steps are deliberately shallow. Large steps at round numbers are what produce end-of-month buying to cross a threshold, and the arithmetic below shows why these steps are never worth chasing.
Why splitting volume to chase the step does not pay
Take a fixed amount of downline volume and spread it evenly across more legs. The bonus is paid on one leg, so more legs means a smaller amount to pay on. The step in the rate softens that, but it never reverses it.
| Legs the volume is spread across | Rate | What the bonus works out to |
|---|---|---|
| 2 equal legs | 2.0 percent | 0.020 x half the volume = 1.00 percent of the volume |
| 3 equal legs | 2.3 percent | 0.023 x a third of the volume = 0.77 percent of the volume |
| 4 equal legs | 2.5 percent | 0.025 x a quarter of the volume = 0.63 percent of the volume |
Two balanced legs is the best you can do with volume you already have, which is exactly the behaviour the layer is designed to reward. Directing genuinely new people into the weaker leg is a different matter: that adds volume rather than dividing it, and it is paid at the designed rate.
Worked, every step, in the ten person organisation
- M1 has three legs. The M3 leg holds M3, M7, M8 and M10: 80 + 1,200 + 80 + 40 = 1,400.00. The M2 leg holds M2, M5, M6 and M9: 120 + 40 + 120 + 240 = 520.00. The M4 leg holds M4 alone: 80.00.
- Ranked by volume, the second-strongest is the M2 leg at 520.00.
- M2, M3 and M4 are all qualified, so M1 has three active legs and the rate is 2.3 percent.
- M1's bonus is 0.023 x 520.00 = 11.96.
- M2 has two legs, the M5 leg at 280.00 and the M6 leg at 120.00, but only M6 is qualified. One active leg means no bonus at all, however much volume is in those legs. This is the teaching case: balance without qualified people at the head of each leg pays nothing.
- M3 has two legs, the M7 leg at 1,200.00 and the M8 leg at 120.00 (M8's 80.00 plus M10's 40.00). Both M7 and M8 are qualified, so two active legs and a rate of 2.0 percent on the second-strongest, which is the M8 leg.
- M3's bonus is 0.020 x 120.00 = 2.40.
- M8 has one leg, so there is no second leg and no bonus. Nobody else has legs.
The whole of layer three in this month is therefore two payments: 11.96 to M1 and 2.40 to M3.
Section nine
The rank ladder
Five ranks. Each one is recomputed from scratch every month, and each one is defined by what your organisation did that month, not by what you bought.
Every requirement, in full
| Rank | Own qualified month | Team Volume | Legs | Reaches |
|---|---|---|---|---|
| Member | not required | none | none | 1 level |
| Builder | required | none | 2 or more active legs | 2 levels |
| Leader | required | 2,500.00 or more | 3 or more active legs | 3 levels |
| Director | required | 10,000.00 or more | 2 or more legs, each containing a Builder or above anywhere inside | 4 levels |
| Executive | required | 40,000.00 or more | 2 or more legs, each containing a Leader or above anywhere inside | 5 levels |
The rules that govern the ladder
- Every requirement on a rung must hold in the same month. A good January and a good March cannot be combined.
- You hold the highest rung whose requirements you meet. Nobody is held on a lower rung by the order the tests are applied in.
- Ranks are recomputed from scratch every month. There is no rank retention, no highest-ever title and no grace period.
- Every threshold is inclusive. Exactly 2,500.00 of Team Volume makes Leader. Exactly 100.00 of Sales Volume qualifies.
- Every rank above Member requires your own qualified month. A large team does not carry a title on its own.
Two rungs read differently from the others, deliberately. For Leader you count active legs, which asks only whether the person at the head of each leg is qualified. For Director and Executive you count legs by what is inside them: a leg counts if it contains a Builder or above anywhere at any depth, or for Executive a Leader or above. That is what makes the top of the ladder about developing other leaders rather than about accumulating volume.
Section ten
The twenty percent ceiling
This is the promise that holds the whole plan together, and it is the reason three layers can sit on one order without the plan becoming expensive. No order ever pays out more than 20 percent of its price, across every layer added together.
How the layers share one order
Each order creates one pot, and that pot is 20 percent of what was paid for the order. The layers draw from it in a fixed order of seniority, and each one draws only what the layer above it left behind.
- Level pay draws first and is always paid in full. The five level rates can never add to more than 25 percent of Commissionable Volume, which is exactly the size of the pot, so level pay always fits and is never reduced.
- Builder overrides draw next, from whatever level pay did not take.
- The second-leg bonus draws last, from whatever is left after that.
- If the claims in a layer come to more than the money left for that layer, every claim in that layer is reduced in the same proportion. Nothing is carried forward, and nothing is borrowed from the next order.
What this means for you
Your level pay is never reduced. Level pay is senior to everything and always fits inside the ceiling, so no override and no bonus anywhere in the organisation can ever take a cent off it.
The two bonus layers share what the ceiling leaves. On an order where level pay has already taken most of the ceiling, override and bonus claims are reduced in proportion, and on a heavily covered order they can be reduced to nothing.
How often a bonus line is reduced. Measured across the modelled runs, 154 of the 641 Conductor-months that carried any volume were reduced on at least one layer: 24.0 percent, or roughly one in four. It is not rare. Your level pay is never among them.
You will always be shown why. Where a bonus line has been reduced, your statement prints the amount claimed, the amount paid, and a plain reason: this order reached its 20 percent ceiling, and the bonus layers shared what remained. A reduced line is never shown as a bare number.
Section eleven
Nothing carries over
Every layer is recalculated from scratch each month, from that month's orders and that month's ranks. Nothing is banked, carried forward, retained or grandfathered. If a Builder below you stops qualifying, your override on them stops that month.
What is recalculated, and what that means
- Ranks are recomputed every month from that month's volume and legs, so the set of Builders is recomputed every month, so the override boundaries and the people who receive overrides are recomputed every month.
- Legs are re-ranked every month, so which leg is second-strongest, and the rate step that goes with the count of active legs, are recomputed every month.
- There is no carryover. Volume that did not pay in one month does not roll into the next. There is nothing banked to be lost and nothing banked to be chased.
- There are no grace months in the plan this document describes. A month that misses a requirement misses it.
Stated plainly, because it cuts both ways. A single missed month can remove a rank and can remove an override that somebody above you was earning on you. If your income depends on one Builder in one leg, one bad month somewhere else in the organisation can take a large part of it. The countermeasure is written into the shape of the plan rather than into a grace rule: hold more than one active leg, and develop more than one Builder.
Section twelve
A complete month, to the cent
This is the whole plan run once, on the ten person organisation from section five. Every line is printed, every layer is added, and every order is checked against its ceiling. Nothing is summarised and nothing is rounded twice.
Step one: volume and qualification
| Person | What they subscribed to | Sales Volume | Commissionable Volume | Qualified |
|---|---|---|---|---|
| M1 | Payment Agent + Pricing Agent | 200.00 | 160.00 | yes |
| M2 | Payment Agent + Software Engineer | 150.00 | 120.00 | yes |
| M3 | Shipping Agent | 100.00 | 80.00 | yes, exactly on the line |
| M4 | Quality Assurance + Secretary, both bought by M4's customers | 100.00 | 80.00 | yes, exactly on the line |
| M5 | Accounting | 50.00 | 40.00 | no |
| M6 | Marketing Agent + Customer Care | 150.00 | 120.00 | yes |
| M7 | 12 domain agents + 6 support agents | 1,500.00 | 1,200.00 | yes |
| M8 | Software Engineer + Accounting | 100.00 | 80.00 | yes, exactly on the line |
| M9 | Payment + Shipping + Pricing | 300.00 | 240.00 | yes |
| M10 | Secretary | 50.00 | 40.00 | no |
| Totals | 2,700.00 | 2,160.00 | ||
Check the totals against each other: 0.80 x 2,700.00 = 2,160.00, and adding the Commissionable Volume column gives 160 + 120 + 80 + 80 + 40 + 120 + 1,200 + 80 + 240 + 40 = 2,160.00. They agree.
Step two: ranks
| Person | Frontline | Team Volume | Active legs | Rank | Reaches |
|---|---|---|---|---|---|
| M1 | M2, M3, M4 | 2,500.00 | 3 | Leader | 3 levels |
| M2 | M5, M6 | 500.00 | 1 | Member | 1 level |
| M3 | M7, M8 | 1,650.00 | 2 | Builder | 2 levels |
| M5 | M9 | 300.00 | 1 | Member, not qualified | nothing |
| M8 | M10 | 50.00 | 0 | Member | 1 level |
| M4, M6, M7, M9, M10 | none | 0.00 | 0 | Member | 1 level |
M1 lands exactly on the Leader threshold of 2,500.00 of Team Volume, and because every threshold in this plan is inclusive, exactly on the line counts. M3 is a Builder because M3 is qualified with two active legs, and misses Leader because Team Volume of 1,650.00 is below 2,500.00.
Step three: layer one, every level pay line
| Earner | Paid on | Level | Their CV | Rate | Amount |
|---|---|---|---|---|---|
| M1 | M2 | 1 | 120.00 | 10% | 12.00 |
| M1 | M3 | 1 | 80.00 | 10% | 8.00 |
| M1 | M4 | 1 | 80.00 | 10% | 8.00 |
| M1 | M5 | 2 | 40.00 | 5% | 2.00 |
| M1 | M6 | 2 | 120.00 | 5% | 6.00 |
| M1 | M7 | 2 | 1,200.00 | 5% | 60.00 |
| M1 | M8 | 2 | 80.00 | 5% | 4.00 |
| M1 | M9 | 3 | 240.00 | 5% | 12.00 |
| M1 | M10 | 3 | 40.00 | 5% | 2.00 |
| M2 | M5 | 1 | 40.00 | 10% | 4.00 |
| M2 | M6 | 1 | 120.00 | 10% | 12.00 |
| M3 | M7 | 1 | 1,200.00 | 10% | 120.00 |
| M3 | M8 | 1 | 80.00 | 10% | 8.00 |
| M3 | M10 | 2 | 40.00 | 5% | 2.00 |
| M8 | M10 | 1 | 40.00 | 10% | 4.00 |
| Layer one, fifteen lines | 264.00 | ||||
Step four: layer two, every override line
| Earner | Generation | On which Builder | That Builder's group volume | Rate | Amount |
|---|---|---|---|---|---|
| M1 | Generation 1 | M3 | 1,400.00 | 1.5% | 21.00 |
| Layer two, one line | 21.00 | ||||
There is only one line because there is only one Builder with anybody above them. M1 holds Leader but sits at the top of the organisation, so M1's own rank pays nobody an override, and because M1 is the top there is no second generation for M3 either.
Step five: layer three, every bonus line
| Earner | Second-strongest leg | That leg's volume | Active legs | Rate | Amount |
|---|---|---|---|---|---|
| M1 | the M2 leg | 520.00 | 3 | 2.3% | 11.96 |
| M3 | the M8 leg | 120.00 | 2 | 2.0% | 2.40 |
| Layer three, two lines | 14.36 | ||||
Step six: the ceiling check on every order
Each person's month is one source of volume, and each one has its own ceiling of 25 percent of Commissionable Volume, which is 20 percent of the price. Every payment above is traced back to the order it came from and checked.
| Source | CV | Ceiling | Level pay | Overrides | Bonus | Total paid | Inside the ceiling |
|---|---|---|---|---|---|---|---|
| M1 | 160.00 | 40.00 | 0.00 | 0.00 | 0.00 | 0.00 | yes |
| M2 | 120.00 | 30.00 | 12.00 | 0.00 | 2.76 | 14.76 | yes |
| M3 | 80.00 | 20.00 | 8.00 | 1.20 | 0.00 | 9.20 | yes |
| M4 | 80.00 | 20.00 | 8.00 | 0.00 | 0.00 | 8.00 | yes |
| M5 | 40.00 | 10.00 | 6.00 | 0.00 | 0.92 | 6.92 | yes |
| M6 | 120.00 | 30.00 | 18.00 | 0.00 | 2.76 | 20.76 | yes |
| M7 | 1,200.00 | 300.00 | 180.00 | 18.00 | 0.00 | 198.00 | yes |
| M8 | 80.00 | 20.00 | 12.00 | 1.20 | 1.60 | 14.80 | yes |
| M9 | 240.00 | 60.00 | 12.00 | 0.00 | 5.52 | 17.52 | yes |
| M10 | 40.00 | 10.00 | 8.00 | 0.60 | 0.80 | 9.40 | yes |
| Totals | 2,160.00 | 540.00 | 264.00 | 21.00 | 14.36 | 299.36 |
How the override and bonus columns are traced to a source: M1's 21.00 override on M3's group is the same thing as claims of 1.5 percent against each Conductor of that group, which is 1.20 on M3, 18.00 on M7, 1.20 on M8 and 0.60 on M10. M1's 11.96 bonus on the M2 leg is claims of 2.3 percent against each Conductor of that leg, which is 2.76 on M2, 0.92 on M5, 2.76 on M6 and 5.52 on M9. M3's 2.40 bonus on the M8 leg is 1.60 on M8 and 0.80 on M10. Every one of those figures appears in the table above, and every row stays under its ceiling.
Step seven: the statements
| Person | Level pay | Builder override | Second-leg bonus | Total |
|---|---|---|---|---|
| M1 | 114.00 | 21.00 | 11.96 | 146.96 |
| M2 | 16.00 | 0.00 | 0.00 | 16.00 |
| M3 | 130.00 | 0.00 | 2.40 | 132.40 |
| M8 | 4.00 | 0.00 | 0.00 | 4.00 |
| M4, M5, M6, M7, M9, M10 | 0.00 | 0.00 | 0.00 | 0.00 |
| Company total | 264.00 | 21.00 | 14.36 | 299.36 |
The company paid 299.36 on 2,160.00 of Commissionable Volume, which is 13.86 percent of Commissionable Volume, or 11.09 percent of the 2,700.00 that came in the door. Four of the ten Conductors were paid. The structural ceiling on this month, 25 percent of 2,160.00, was 540.00, so the plan paid a little over half of what its own rates could describe.
Where the rest of the money went
None of the difference is unexplained, and it is worth understanding because it is the same money that funds layers two and three.
- 240.00 never existed. Most of these ten people do not have five levels of upline above them. M1 is at the top, so M1's own volume pays nobody. M2's volume can only reach one level up. Adding up, for each person, only the levels that actually exist above them, the most that could ever have been paid on this organisation is 300.00, not 540.00.
- 36.00 was breakage. Of that reachable 300.00, M5 is not qualified, so the 24.00 M5 would have earned on M9 is paid to nobody, and M2 reaches only one level, so M2's claim of 12.00 on M9 is out of reach. Neither amount is pushed upward or held.
- 264.00 was paid as level pay, and 35.36 more was paid through the Builder override and the second-leg bonus, out of the room the first two items left under each order's ceiling.
That is the whole design in one line. The money that funds the two additional layers is money the level rates described but nobody could receive. The layers redirect it toward Conductors who developed other Conductors. They do not raise anybody's price and they do not reduce anybody's level pay.
Section thirteen
What this plan never pays for
A compensation plan is defined as much by what it refuses to pay for as by what it pays. Each item below is a protection: it removes a way that a plan of this kind can be turned against the people in it.
The same list, with the reason for each
- No payment for recruiting. There is no enrolment bonus, no signing bonus and no head-count payment of any kind. Every cent this plan pays is a percentage of Commissionable Volume from a product order. A plan that pays for recruitment rewards bringing people in whether or not anything is sold; this one cannot, because it has no mechanism to do it.
- No rank that money can buy. Builder requires two active legs, which means two other people each reaching 100.00 of Sales Volume in their own right. Every rank above Builder requires more of the same. Spending on your own account cannot create a single active leg.
- No rebate, markup or commission on your own buying. What you buy counts toward your qualification and pays the people above you. It never pays you. This is why nobody in this plan can earn by buying more.
- No placement tree, no spillover and no purchased positions. Legs are the real sponsorship organisation, exactly as it happened. There is nowhere to place anybody strategically, no spillover to wait for, and no position that can be handed to somebody or sold.
- No carryover and no banking. Volume that did not pay this month does not accumulate. That removes the end-of-month buying that plans with carryover produce, and it also means nobody is ever told that a balance they were promised has expired.
- No payment above the ceiling. The 20 percent limit is applied inside the calculation, per order, before anything is paid. It is not a target that is reviewed later and corrected. That is what makes it safe to add layers to this plan without the cost of the plan drifting upward as the organisation grows.
- No compression. An unqualified person is a wall in the organisation rather than a hole: the people below them do not slide up into their place. This is stated here rather than buried, because it is the rule most likely to surprise somebody who has read other plans.
- No retail commission on customer sales. Customer volume books to the referring Conductor's account, counts toward their qualification and pays their upline. There is no separate retail margin paid on top of that.
One rule that runs the other way, in your favour. Volume from an unqualified person still pays everybody above them in full. Somebody having a bad month costs that person their own commission; it never costs you yours.
Section fourteen
Key terms
Every term used anywhere in this document, in alphabetical order, with the sections that use it.
| Term | Definition |
|---|---|
| Active leg | A leg whose frontline person is qualified this month. Volume inside the leg is irrelevant to whether it is active. |
| Breakage | Commission that the rates describe but nobody receives, because the person who would have received it was unqualified or out of reach. It is paid to nobody and held for nobody. |
| Builder | The second rank. Requires a qualified month and two or more active legs. Also the rank that triggers the override in layer two for the people above. |
| Builder override | Layer two. 1.5 percent of a first-generation Builder's group volume, or 1.0 percent of a second-generation Builder's group volume. |
| Ceiling | The most any single order can pay across all layers: 25 percent of its Commissionable Volume, which is 20 percent of its price. |
| Commissionable Volume (CV) | 80 percent of Sales Volume, rounded to two decimals. Every percentage in this plan is applied to this figure and to nothing else. |
| Compression | Skipping over an unqualified person so the next qualified person moves into their place. This plan does not do it. |
| Conductor | Somebody enrolled and holding a place in the organisation. Every person this plan pays is a Conductor. |
| Customer | Somebody who buys through a referring Conductor without joining. Never qualifies, never holds a rank, never earns. |
| Downline | Everybody below you at any depth. |
| Frontline | The people you personally sponsored, and only those people. |
| Generation | A counting unit used only by the Builder override, marked out by Builders in the line above rather than by levels. Section seven gives the count. |
| Group | A Conductor plus their whole downline at every depth, with nothing excluded. |
| Group volume | The Commissionable Volume of everybody in a group, added together. The basis for the Builder override. |
| Leg | One frontline person plus that person's entire downline, treated as one branch. |
| Leg volume | The Commissionable Volume of everybody in a leg, qualified or not. |
| Level | The plain distance in the organisation from you down to somebody below you. Frontline is level 1. |
| Level pay | Layer one. 10, 5, 5, 3 and 2 percent of the Commissionable Volume of the people at levels 1 to 5 below you. |
| Member | The name of the first rank. It requires enrolment and nothing else, and reaches one level. |
| Paid depth | How many levels below you your rank is paid on. Member 1, Builder 2, Leader 3, Director 4, Executive 5. |
| Personal Volume (PV) | The volume printed on a product, which at Orvanna always equals its price in dollars. |
| Proportional reduction | What happens when the claims in a bonus layer exceed the money an order has left: every claim in that layer is cut by the same fraction. Your statement shows the amount claimed, the amount paid and the reason. |
| Qualified month | A month in which your own Sales Volume reached 100.00 or more. The single gate in the plan. |
| Rank | The title you hold for one month, recomputed from scratch each month. |
| Sales Volume (SV) | The total Personal Volume of everything booked to your account in one calendar month, whether you bought it or a customer of yours did. |
| Second-leg bonus | Layer three. 2.0, 2.3 or 2.5 percent of the volume of your second-strongest leg, depending on how many legs are active. |
| Sponsor | The one person directly above you, who enrolled you. |
| Team Volume (TV) | The Sales Volume of everybody strictly below you, added across the whole downline. It never includes your own. |
| Upline | Everybody above you: your sponsor, their sponsor, and so on to the top. |
Section fifteen
Legal notice and income disclosure
Orvanna is a demonstration company. It is a worked model of a direct-selling business, published so that its compensation plan can be read and examined in full. Its products, its Conductors and the organisations shown in this document are not real. No money is paid to anybody under this plan. Nothing in this document is an offer to enrol, an offer to sell, or a contract.
Income
No income is promised, projected or implied anywhere in this document. Every figure printed here shows how a commission would be calculated from a stated set of orders. None of them is a forecast of what any person would earn.
What earnings depend on is stated plainly. Commission is calculated from the volume that other people in your organisation buy, and from whether those people are qualified in the month. It follows that most Conductors in a plan of this shape earn little or nothing. In the complete month worked in section twelve, four of the ten Conductors were paid and six were paid nothing at all, and of the amount paid, one Conductor received roughly half. That distribution is not an accident of the example: it is what any plan of this kind produces when most Conductors have nobody in reach below them.
How the rules change, and when
- This document explains the plan. It does not govern any other page, it settles no disagreement with one, and it retires nothing. Where it differs from the compensation plan page, that difference is not decided here.
- Rule changes take effect at the start of a stated calendar month and are never applied to a month that has already been calculated.
- Every month's calculation is versioned. A recalculation never edits a closed month: it produces a new numbered calculation, and the previous one is kept, so every statement can be traced to the exact calculation that produced it.
- All money in this plan is held to two decimal places. Rounding happens in exactly two places: once when Commissionable Volume is taken as 80 percent of Sales Volume, and once on each commission line. Totals are the sums of already rounded lines and are never rounded a second time.
What this document does not cover
- Refunds and reversals. This version has no rule for reversing volume or reclaiming commission after a refund. A rule will be published before refunds are introduced.
- Compression. Not part of the plan described here. An unqualified person is a wall in the organisation, as stated in sections six and thirteen.
- Grace months and rank retention. Not part of the plan described here. Every rank is recomputed monthly with no retention and no highest-ever title.
- Disbursement. The plan described here calculates statements. It does not describe a method of payment, and no payment is made.
Document details
- What this document covers. Level pay, the Builder override and the second-leg bonus.
- This document carries no version number and no effective date. It states no start date and retires nothing.
- Rates of record: level pay 10, 5, 5, 3 and 2 percent; Builder override 1.5 percent on the first generation and 1.0 percent on the second; second-leg bonus 2.0 percent, rising to 2.3 percent at three active legs and 2.5 percent at four or more; qualification at 100.00 of Sales Volume; ceiling 20 percent of the price of every order.