What is BREAKAGE?
In Network Marketing Compensation Plans, there are always requirements to receive commissions. The requirements vary from company to company, but they always exit.
The reasons for having them vary as well, but mostly it boils down to two reasons...
1) Companies cannot afford to pay commissions for very long to people who become inactive and are no longer working to promote the business.
2) Companies need to protect themselves from paying out so much money in commissions that they go upside down and go out of business.
Because of these requirements, there are always distributors that do not meet the requirements and lose out on some commission money.
Usually this money goes straight to the company as windfall profits.