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Let’s Talk MLM Stacking! Part 2: Why is Stacking Dangerous?

Let’s Talk MLM Stacking! Part 2: Why is Stacking Dangerous?

Stacking is a common form of direct selling comp plan manipulation that can get the best of any company that’s not prepared to handle it. Our three-part stacking series helps you understand it better so you can prevent widespread issues in your organization. In this blog, we’ll go over four ways stacking causes big problems in an MLM.

Want to learn more about stacking and how it works? Check out Part 1 of our Let’s Talk Stacking series here.

1. Stacking Disrupts Distributor Paylines

One of the biggest immediate impacts of stacking is taking earnings away from upline distributors. Let’s say that Distributor A’s comp plan pays on five downline levels of sales. If A was building honestly, her upline distributor would earn commissions on the sales of those recruits she brought into the business. Let’s say A has recruited one level of recruits and each has sold $100 worth of products. Here’s how the commissions would work:

Both Distributor A and her upline leader, Distributor B, earn money from those sales.

Now, let’s look at a stacked example. In this scenario, A has four levels of fake distributors between her and the “real” selling action below. Instead of $20, she pockets $100. And, since the plan pays five levels deep, Distributor B, on the sixth level, gets nothing.

In fact, none of A’s upline will benefit from the real sales happening under A’s stacked levels, and they’ll find out fast what’s really going on.

2. Stacking Causes Negativity in the Salesforce

Distributors aren’t happy when they’re missing out on hard-earned commissions. So, when upline leaders find stacking in their downline, they want to get it stopped as soon as possible. Not only do slighted leaders report the stacking distributor to the company for breaking the distributor agreement, they withhold training, halt support, and, ultimately, stunt that distributor’s chances of ever becoming successful. And, once that negativity starts, it can spread, causing bad publicity and forcing you to get involved and pick sides.

3. Stacking Introduces a Manipulation Culture

In my opinion, the worst thing about stacking is it erodes your company’s culture. As people see the stacking distributor breaking their agreement and comp plan rules, they’ll be more inclined to try stacking or other manipulative behaviors themselves.

When a distributor builds a stacked organization, what’s to stop their own downline from stacking and spacing them out of commissions? Setting an example of manipulation encourages other people to look for ways to skirt around the rules, and that can get out of control fast.

4. Stacking Undermines the Comp Plan

Another reason stacking is dangerous is because it messes up how the compensation plan is supposed to work. Imagine what would happen if every person in an organization stacked—it would be the same as paying a one-level commission. Most distributors who stacked have a strict no-stacking policy for their downline for this reason—once stacking becomes a regular thing, the whole comp plan starts to fall apart.

5. Stacking Isn’t Sustainable for the Distributor

From my experience, stacking creates more work for a distributor than it’s worth. All of the effort they put into creating fake accounts and maintaining the façade takes away from the time they could be spending to build a real, honest business.

Conclusion

For all of the reasons we’ve mentioned here, stacking just isn’t worth it for the distributor. Making enemies with their upline, setting a bad example, breaking their distributor agreement, and stunting their own growth are plenty of reasons for a distributor to think twice about it. Watch for Part 3, where we talk about how to address stacking issues in your MLM.

Looking to avoid comp plan manipulation in your organization? InfoTrax’s great commission software and expert industry advice can help you find issues early. Get in touch with us here to learn more.

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