Transcript How Downline Profit is Earned
Calculating Downline Profit Slides from Presentation Keller Williams
How You Earn Downline Profit
Four Steps to KW Profit Share [Employed Monthly] 1. The Market Center Calculates Profit 2. The Market Center Splits the Profit 3. The Profit Share Factor is Calculated 4. The Profit Share is Dispersed
How Downline Profit is Earned
Step 1 –
The MC Calculates Profit
MC gross closed commission $1,070,124 Less KW royalty fee Equals net gross commission 27,416 $1,042,708 Less agent commission Equals company dollar retained Less KW approved expenses Equals KW profit 910,671 132,037 58,378 $ 73,659
How Downline Profit is Earned
Step 2 -
The MC Splits the Profit
LEVELS PROFIT SHARE
25%
POOL
$747.50
OWNER
75%
PROFIT
$2,242.50
1). 1 st $2,990 of profit 2). Next $8,250 of profit 3). Profit over $11,240
Totals
35% 50% $2,887.50
$31,209.50
$34,844.50
65% 50% $5,362.50
$31,209.50
$38,834.50
How Downline Profit is Earned
Step 3 -
The Profit Share Factor is Calculated
On a monthly basis the MC profit share factor is determined
MC’s total profit share pool
$34,844.50
Company Dollar Amount
$132.037
To determine the Profit Share Factor = .2639
How Downline Profit is Earned
Step 4 –
The Profit Share is Disbursed What each agent paid in Company Dollar for the month is multiplied by the profit share factor to find the amount of profit share that will be distributed to that agent’s branch in the Profit Share Tree / Down-line on the 21 st of the following month
Criteria for Qualifying for Monthly Downline Profit • Office must be profitable for the month.
• Sponsoring agent must close a unit.
• Downline agent must close a unit.
• 100% Cappers do not qualify.
How Downline Profit is Earned
Step 4 –
The Profit Share is Disbursed Example: if an agent paid $1800 in Company Dollar in the month, multiply that $1800 by the Profit Share Factor of .2639
[$1800 X .2639 = $475.02]
$475.02 will be distributed to this agent’s branch
How Downline Profit is Earned
Step 4 –
The Profit Share is Disbursed
Background: • Each agent names a ‘sponsor’ when they join KW Realty • A sponsor is the one person the agent perceives to be primarily responsible for bringing him or her to the company • In this example, the person that was named as his sponsor will receive 50% of $475.02
• The person their sponsor named receives 10% and so on
How Downline Profit is Earned
Step 4 –
The Profit Share is Disbursed
LEVEL
1 st 2 nd 3 rd 4 th 5 th 6 th 7 th
Total % SHARE
50% 10% 5% 5% 7.5% 10% 12.5%
100% WHOLE
$475.02
$475.02
$475.02
$475.02
$475.02
$475.02
$475.02
RECEIVES
$237.51
$47.50
$23.75
$23.75
$35.63
$47.50
$59.38
$475.02
How Downline Profit is Earned
1. Special Note – A MC must be profitable in order for there to be profit distributed – If an MC is not profitable, an agent in that MC can still build his or her profit share tree / down line in anticipation of MC profitability – An agent in an unprofitable MC can still receive profit share from agents in their profit share tree / down-line who are in profitable MCs
How Downline Profit is Earned
2. Special Note – An agent must pay Company Dollar in a particular month in order for Profit Share to be distributed to that agent’s branch in the profit share tree.
How Downline Profit is Earned
3. Special Note – The Profit Share system is coordinated throughout all of North America. An agent could join a MC in Massachusetts and name an agent in an Ottawa MC as his or her sponsor
How Downline Profit is Earned
4. Special Note – Once an agent has been with KW for 3 years and a day, he or she is vested – When an agent is vested, he or she can leave KW and still receive profit share 5. Special Note – Agents can will their profit share to a beneficiary
How Downline Profit is Earned
6. Special Note – Agents can – and often do – receive more in profit share than they pay to their MC Company Dollar Cap 7. Special Note – Receiving $100 per month in profit share would be equivalent to having $24,000 after-tax invested for a year at 5%.
– Requires no investment on the agent’s part