kannaway-logoCurrently in “Buzz Launch”, Kannaway are slated to go into pre-launch at the end of this month. Given that that’s now under two weeks away, the company has released it’s launch compensation plan into the wild.

Typically I’d include a brief history to preface an MLM company review but as Kannaway launched a separate compensation plan for their Buzz Launch, I included the company history with that review. See the BehindMLM Kannaway Prelaunch Review for a company history and brief introduction to Kannaway’s product line.

Otherwise, read on for a full review of the Kannaway launch compensation plan.

Retail Commissions

Kannaway offer retail commissions on all products sold to retail customers.  Referred to as “Direct Sales Income”, unfortunately Kannaway don’t provide the specifics of their retail sales commissions.

Preferred customer commissions are also available, paying out 50% of the difference between the wholesale and preferred customer price of any products ordered.

Preferred customers are retail customers who opt to place a monthly standing order in exchange for a 50% discount on the difference between the wholesale and retail price of Kannaway products.

Eg. If a preferred customer orders a $10 product that wholesales for $5, they pay $7.50 (wholesale + 50% of the wholesale/retail margin), and the referring affiliate earns a $2.50 commission (the remaining 50% of the wholesale/retail margin).

Note that preferred customers themselves can refer new customers to Kannaway, and in doing so can receive a Business Volume (BV) discount on their product order.

Kannaway Affiliate Membership Ranks

There are eleven affiliate membership ranks within the Kannaway compensation and, along with their respective qualification requirements, they are as follows:

  • Affiliate (IBO) – pay $15 a month affiliate fee
  • Director – maintain at least 28 BV in personal sales and a total downline sales volume of 600 BV (no more than 80% from any one unilevel leg)
  • Regional Marketing Director – maintain at least 55 BV in personal sales, recruit at least three affiliates and have a total downline volume of 5400 GV (no more than 70% from any one unilevel leg)
  • National Marketing Director - maintain at least 55 BV in personal sales, recruit at least three affiliates (three of which must be Director or higher, placed in three individual unilevel legs), and have a total downline volume of 15,000 GV (no more than 60% from any one unilevel leg)
  • Silver Executive - maintain at least 110 BV in personal sales, recruit at least three affiliates (three of which must be Regional Marketing Director or higher, each placed three individual unilevel legs), and have a total downline volume of 50,000 GV for two consecutive months (no more than 60% from any one unilevel leg)
  • Gold Executive - maintain at least 110 BV in personal sales, recruit at least three affiliates (three of which must be National Marketing Director or higher, each placed three individual unilevel legs), and have a total downline volume of 150,000 GV for two consecutive months (no more than 60% from any one unilevel leg)
  • Platinum Executive - maintain at least 110 BV in personal sales, recruit at least three affiliates (three of which must be Silver Executive or higher, each placed three individual unilevel legs), and have a total downline volume of 300,000 GV for two consecutive months (no more than 60% from any one unilevel leg)
  • Diamond - maintain at least 110 BV in personal sales and recruit at least three affiliates (three of which must be Gold Executive or higher, each placed three individual unilevel legs)
  • Double Diamond - maintain at least 110 BV in personal sales and recruit at least three affiliates (three of which must be Platinum Executive or higher, each placed three individual unilevel legs)
  • Triple Diamond - maintain at least 110 BV in personal sales and recruit at least three affiliates (two of which must be Diamond or higher, each placed three individual unilevel legs)
  • Royal Diamond - maintain at least 110 BV in personal sales and recruit at least three affiliates (three of which must be Diamond or higher, each placed three individual unilevel legs)

Rank Achievement Bonus

Kannaway rewards affiliates for qualifying at certain affiliate ranks, starting with the National Marketing Director rank. When an affiliate qualifies at one of these ranks, they receive a Rank Achievement Bonus as follows:

  • National Marketing Director – iPad
  • Platinum Executive – $10,000 paid out over three months
  • Diamond – $25,000 paid out over six months
  • Double Diamond – $50,000 paid out over twelve months
  • Triple Diamond – Car Bonus $75,000 pink slip
  • Royal Diamond – $100,000 paid out over twelve months

First Order Bonus

The First Order Bonus is paid out when a newly recruited affiliate or referred retail customer purchases one of two “product packs”:

  • Lifestyle Package ($499) – $75 commission
  • Premier Package ($999) – $150 commission

Unfortunately Kannaway only provide the BV value for both packages, rather than what they actually cost. The Lifestyle Package generates 450 BV and the Premier Package 900 BV.

First Order Team Bonus

The First Order Team Bonus is a bonus paid out on the sales volume of product packages sold by an affiliate’s downline.

Sales Volume on the package orders is tracked as follows:

  • Essential Package – 77 BV
  • Lifestyle Package – 225 BV
  • Premier Package – 450 BV

This BV is tallied up as an affiliate’s downline sells Kannaway’s various packages, and pays out $400 when a balance of 5400 BV is accumulated.

Additional rules that affect the First Order Team Bonus are

  • no more than 45% of the total BV can come from the downline of any one personally recruited affiliate
  • Director and Regional Managing Director ranked affiliates are capped at 4 First Order Team Bonus payouts a week, National Marketing Director affiliates are capped at 8

Note that an affiliate has to qualify for the First Order Team Bonus, and can do so in one of two ways:

  1. Qualify at the Regional Marketing Director affiliate rank or
  2. Sign up for autoship (55 BV min), generate 900 BV in personal sales (including self-purchases), recruit at least three affiliates who sign up for autoship (55 BV min), generate at least 3600 BV in Group Volume (900 BV max from an affiliate’s own sales volume and 900 BV max from any one recruited affiliate can be counted)

Unilevel Commissions

Residual commissions in Kannaway are paid out using a unilevel compensation structure. A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1).

unilevel-commission-structure

If any of these level 1 affiliates go on to recruit new affiliates of their own, they are placed on level 2 of the original affiliate’s unilevel team. If any level 2 affiliates go on to recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretically infinite number of levels.

Kannaway cap the payable unilevel levels at 10, with how many levels an affiliate is paid out on determined by their affiliate membership rank:

  • Affiliate (IBO) – 5% on level 1
  • Director – 5% on levels 1 and 2
  • Regional Marketing Director – 5% on levels 1 to 3
  • National Marketing Director – 5% on levels 1 to 4
  • Silver Executive – 5% on levels 1 to 5
  • Gold Executive – 5% on levels 1 to 5 and 10% on level 6
  • Platinum Executive – 5% on levels 1 to 5 and 10% on levels 6 and 7
  • Diamond – 5% on levels 1 to 5, 10% on levels 6 and 7 and 5% on level 8
  • Double Diamond - 5% on levels 1 to 5, 10% on levels 6 and 7 and 5% on levels 8 and 9
  • Triple and Royal Diamonds - 5% on levels 1 to 5, 10% on levels 6 and 7 and 5% on levels 8 to 10

Differential Infinity Bonus

The Differential Infinity Bonus allows a Kannaway affiliate to earn beyond ten levels of their unilevel team.

The bonus pays out a maximum of 10% at the Royal Diamond affiliate rank as follows:

  • Silver Executive – 1%
  • Gold Executive – 2%
  • Platinum Executive – 3%
  • Diamond – 4%
  • Double Diamond – 6%
  • Triple Diamond – 8%
  • Royal Diamond – 10%

Note that from the Gold Executive rank and above, any affiliates in any given unilevel leg who are ranked Silver or above will be paid out as a lower percentage rate (up to the ranked affiliates tenth unilevel level).

Eg. If a Triple Diamond has one unilevel leg with a Platinum Executive in it, they are paid 5% (8 minus 3) up till that affiliate’s tenth unilevel leg, and then their regular 8% thereafter.

This sharing of the percentage is not restricted down one level either, another ranked affiliate (other than Platinum Executive) in the above example will further diminish the Triple Diamond’s Differential Infinity Bonus beyond that particular affiliate’s tenth unilevel level.

The maximum the Differential Infinity Bonus can be restricted is 0% down their eleventh to twenty-first unilevel level, if the eleventh affiliate in that particular unilevel leg was a Royal Diamond. The bonus would be paid out as normal from the twenty-first unilevel level, assuming there were no further Silver Executive or higher affiliates present (if so, then the bonus would be restricted according to the difference in ranks).

Coded Infinity Bonus

When a Kannaway affiliate signs up, they are immediately coded to seven levels of upline (the affiliate who recruited them, the affiliate who recruited that affiliate etc). This coding is fixed and is used to calculate the Coded Infinity Bonus.

The Coded Infinity Bonus pays out a percentage of the BV generated by affiliates within the seven levels of recruitment. How much of a percentage is paid out is determined by an affiliate’s own membership rank:

  • Silver Executive – 1%
  • Gold Executive – 2%
  • Platinum Executive – 3%
  • Diamond – 4%
  • Double Diamond – 6%
  • Triple Diamond – 8%
  • Royal Diamond – 10%

Bonus Pools

Kannaway take 9% of the company-wide BV generated by affiliates and place it into three separate pools:

  • Director Pool (2%) – Regional Marketing Directors receive 1 share, National Marketing Directors receive 2 shares
  • Executive Pool (3%) – Silver Executives receive 1 share, Gold Executives receive 2 shares and Platinum Executives receive 3 shares
  • Diamond Pool (4%) – Diamonds receive 1 share, Double Diamonds receive 2 shares, Triple Diamonds receive 3 shares and Royal Diamonds receive 4 shares

All shares allocated across all three bonus pools are of equal value (with respect to the pool they are allocated in).

Car Bonus

Kannaway’s Car Bonus is a monthly payment towards a new or pre-owned car, culminating in the handing over of a “pink slip” to a vehicle worth $75,000 at the Triple Diamond rank.

In addition to how much of a Car Bonus an affiliate receives each month, they must also meet one of the following two qualification criteria:

  1. Be at the Silver Executive or higher affiliate rank or
  2. Generate 900 BV in personal sales (including self-purchase of products), receive three First Order Team Bonuses for two consecutive months and be qualified at the National Marketing Director affiliate rank

Once either of the above qualification criteria are satisfied, Kannaway affiliates are paid the Car Bonus as follows:

  • National Marketing Director or Silver Executive – $500
  • Gold and Platinum Executives – $750
  • Diamond  and Double Diamond – $1000
  • Triple Diamond – “Pink slip” on a vehicle valued at $75,000

Note that an affiliate can opt to receive 50% of the Car Bonus as cash. College students can additionally opt to have 100% of the Car Bonus put towards their tuition fees.

Joining Kannaway

Affiliate membership to Kannaway is $15 a month. Affiliates can opt to purchase a product pack when they join, raising a new affiliate’s join cost to between $199 to $999 (plus $15 fee).

Conclusion

Kannaway offer affiliates a well-rounded product-centric compensation plan that isn’t too heavy on recruiting and nor does it require an affiliate to spend large amounts on product to generate commissions.

The product packages can get a little expensive but there’s no real requirement to make a purchase. An affiliate who doesn’t purchase one can just as easily qualify themselves to earn commissions on the sale of the packs as one who doesn’t.

Other than additional BV, there didn’t appear to be any distinct advantage to purchasing a pack, which made for a nice change (usually the pressure applied via the comp plan to get affiliates to buy these sorts of packs is immense).

Ideally an affiliate would hit the monthly PV requirements on customer orders but given that potential customers are likely to want to hear personal experiences about the product, a 110 BV autoship maximum requirement is acceptable. Especially when one considers an affiliate can score free product each month via the referral of preferred customers.

I particularly liked the double payout on unilevel volume (regular unilevel commission plus coded bonus), and thought that offering college affiliates the choice to put their car bonus towards tuition was a nice touch.

That said I’m not entirely convinced that Kannaway is a good idea for college students, what with the whole “cannabis” thing. I imagine it will get tiring answering “can you smoke the products?” type questions pretty quickly.

Looking towards Kannaway’s official launch and deployment of this compensation plan, I see potential problems with the company’s attracted affiliate-base.

Come launch the “pyramid scheme” crowd are going to collect their bonus pool commission and never be heard from again. The reason is you’ve got two non-complimentary compensation plans being offered that target completely opposite ends of the MLM affiliate spectrum.

I really don’t see the whole point of the Buzz Launch, other than to familiarize the brand with affiliates who flock to recruitment-driven schemes. There’s even a chance for some backlash when these affiliates learn there isn’t going to be more of the same after Kannaway officially launches.

After launch Kannaway adopts a “standard” MLM compensation plan, which while robust and product-centric, is totally alien to their pre-launch model.

It’s sort of like having your pre-launch on a race-track and paying people directly based on how fast they can push a car to its limits, and then trying to run the same gig on regular streets and paying people for following road rules. You’re going to wind up with two completely different groups of people who have little to nothing in common.

The types of affiliates Kannaway attract pre and post-launch is going to wreak havoc on affiliate cohesion, and what that’s going to translate into as the company moves forward doesn’t sound even remotely promising to me.