Sales

<1000$
>1000$

Commission
25%
32%

Level 1 Team Members

Level 2 Team Members
Level 3 Team Members
Level 4 Team Members
atleast 500$ sales

Level 1 (no reps)

Sales

Commision
$500.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00

Level 1 (with 1 rep)

Own Sales(down by 15%)

Level 1 (with 2 Reps)

Own Sales(down by 10%+15%)

25%
32%
32%
32%
32%

Own Commision
$425.00
25%
$850.00
25%
$1,275.00
32%
$1,700.00
32%
$2,125.00
32%

Own Commission
$375.00
25%
$750.00
25%
$1,125.00
32%
$1,500.00
32%
$1,875.00
32%

Level 1 (with 3 Reps)

Own Sales(down by 10%+ 10%+15%)
Own Commission
$325.00
25%
$650.00
25%
$975.00
25%
$1,300.00
32%
$1,625.00
32%
Level 1 commisions
Alone

With 1 Rep
125
320

138.65
244.9

480
640
800

440.4
576.4
712.4

It is given that level2,3,4 dont cannibalize own volumes

Level 2(There are 3 already in level1)
with 0 level 2
with 1 level 2
$178.45
$197.89
$259.70
$279.14
$340.95
$360.39
$513.20
$532.64
$617.20
$636.64
Level 3 (3 each in level 1 and 2)
with 0 in level 3

Level 4 (3 each in level1,2,3)

with 0 in level 4

with 1 in level 3
236.77
249.73
318.02
330.98
399.27
412.23
571.52
584.48
675.52
688.48

with 1 in level 4
275.65
282.13
356.9
363.38
438.15
444.63
610.4
616.88
675.52
682

Alone>Leader
Better off selling all alone than be a leader

Leader
5%
3%
2%
1%

Values
$125.00
$320.00
$480.00
$640.00
$800.00

Values

Rep sales
$106.25
$212.50
$408.00
$544.00
$680.00

Values

Values

Leadership commmisCommision Value(5 Total

648
5%
32.4 $138.65
648
5%
32.4 $244.90
648
5%
32.4 $440.40
648
5%
32.4 $576.40
648
5%
32.4 $712.40

Rep Sales 1 CommiRep sales 2 CommisiTotal

$93.75
32.4
32.4
$187.50
32.4
32.4
$360.00
32.4
32.4
$480.00
32.4
32.4
$600.00
32.4
32.4

$158.55
$252.30
$424.80
$544.80
$664.80

Rep Sales 1 CommiRep sales 2 CommisiRep sales 3 CommisTotal

$81.25
32.4
32.4
32.4 $178.45
$162.50
32.4
32.4
32.4 $259.70
$243.75
32.4
32.4
32.4 $340.95
$416.00
32.4
32.4
32.4 $513.20
$520.00
32.4
32.4
32.4 $617.20

With 2 Reps

With 3 reps
158.55
$178.45 Not generating 500$ alone in these cases
252.3
$259.70

424.8
544.8
664.8

$340.95
$513.20
$617.20

with 2 level 2
with 3 level 2
$217.33
$236.77
$298.58
$318.02
$379.83
$399.27
$552.08
$571.52
$656.08
$675.52

with 2 in level 3
with 3 in level 3
262.69
275.65
343.94
356.9
425.19
438.15
597.44
610.4
701.44
714.4

with 2 in level 4
with 3 in level 4
288.61
295.09
369.86
376.34
451.11
457.59
623.36
629.84
688.48
694.96

Selling all Alone

125
320
480
640
800

Sales
<1000$
>1000$

Commission
25%
32%

Level 1 Team Members

Level 2 Team Members
Level 3 Team Members
Level 4 Team Members
Atleast 1250$ sales

Level 1 (no reps)

Sales

Commision
$500.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00

Level 1 (with 1 rep)

Own Sales(down by 15%)

Level 1 (with 2 Reps)

Own Sales(down by 10%+15%)

25%
32%
32%
32%
32%

Own Commision
$425.00
25%
$850.00
25%
$1,275.00
32%
$1,700.00
32%
$2,125.00
32%

Own Commission
$375.00
25%
$750.00
25%
$1,125.00
32%
$1,500.00
32%
$1,875.00
32%

Level 1 (with 3 Reps)

Own Sales(down by 10%+ 10%+15%)
Own Commission
$325.00
25%
$650.00
25%
$975.00
25%
$1,300.00
32%
$1,625.00
32%
Level 1 commisions
Alone

With 1 Rep
125
320

171.05
277.3

480
640
800

472.8
608.8
744.8

It is given that level2,3,4 dont cannibalize own volumes

Level 2(There are 3 already in level1)
with 0 level 2
with 1 level 2
$275.65
$356.90
$438.15
$610.40
$649.28
$714.40
$753.28

Level 3 (3 each in level 1 and 2)

with 0 in level 3
$727.04
831.04

Level 4 (3 each in level1,2,3)

with 0 in level 4

Manager>Alone>Leader

with 1 in level 3
$752.96
$856.96

with 1 in level 4
$882.56
$895.52
$986.56
$999.52

Manager
10%
6%
4%
2%

Values
$125.00
$320.00
$480.00
$640.00
$800.00

Values

Rep sales
$106.25
$212.50
$408.00
$544.00
$680.00

Values

Values

Leadership commmisCommision Value(5

648
10%
64.8
648
10%
64.8
648
10%
64.8
648
10%
64.8
648
10%
64.8

Rep Sales 1 CommiRep sales 2 CommisiTotal

$93.75
64.8
64.8
$187.50
64.8
64.8
$360.00
64.8
64.8
$480.00
64.8
64.8
$600.00
64.8
64.8

$223.35
$317.10
$489.60
$609.60
$729.60

Rep Sales 1 CommiRep sales 2 CommisiRep sales 3 Commis

$81.25
64.8
64.8
64.8
$162.50
64.8
64.8
64.8
$243.75
64.8
64.8
64.8
$416.00
64.8
64.8
64.8
$520.00
64.8
64.8
64.8

With 2 Reps

With 3 reps
223.35
$275.65 Not generating 1250$ alone in these cases
317.1
$356.90

489.6
609.6
729.6

with 2 level 2

$688.16
$792.16

$438.15
$610.40
$714.40

with 3 level 2

$727.04
$831.04

Even at level 2 making more as a manage

with 2 in level 3
with 3 in level 3
$804.80
$882.56
$908.80
$986.56

with 2 in level 4
with 3 in level 4
$908.48
$921.44
$1,012.48
$1,025.44

Selling all Alone

125
320
480
640
800

Total
$171.05
$277.30
$472.80
$608.80
$744.80

Total
$275.65
$356.90
$438.15
$610.40
$714.40

these cases

vel 2 making more as a manager

Selling as Leader
295.09
376.34
457.59
629.84
694.96

Sales
<1000$
>1000$

Commission
25%
32%

Level 1 Team Members

Level 2 Team Members
Level 3 Team Members
Level 4 Team Members
Atleast 1500$ sales

Level 1 (no reps)

Sales

Commision
$500.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00

Level 1 (with 1 rep)

Own Sales(down by 15%)

Level 1 (with 2 Reps)

Own Sales(down by 10%+15%)

25%
32%
32%
32%
32%

Own Commision
$425.00
25%
$850.00
25%
$1,275.00
32%
$1,700.00
32%
$2,125.00
32%

Own Commission
$375.00
25%
$750.00
25%
$1,125.00
32%
$1,500.00
32%
$1,875.00
32%

Level 1 (with 3 Reps)

Own Sales(down by 10%+ 10%+15%)
Own Commission
$325.00
25%
$650.00
25%
$975.00
25%
$1,300.00
32%
$1,625.00
32%
Level 1 commisions
Alone

With 1 Rep
125
320

$184.01
$290.26

480
640
800

$485.76
$621.76
$757.76

It is given that level2,3,4 dont cannibalize own volumes

Level 2(There are 3 already in level1)
with 0 level 2
with 1 level 2

753.28

Level 3 (3 each in level 1 and 2)

with 0 in level 3

Level 4 (3 each in level1,2,3)

with 0 in level 4

$805.12

with 1 in level 3
$908.80
$947.68

with 1 in level 4
$1,142.08
$1,161.52

Director>Manager>Alone>Leader

Total Increase in earning per level

From alone to leader
From leader to manager
From manager to director

From all alone to Director

-13.13%
47.55%
17.06%

50.05%

Manager
12%
8%
6%
3%

Values
$125.00
$320.00
$480.00
$640.00
$800.00

Values

Rep sales
$106.25
$212.50
$408.00
$544.00
$680.00

Values

Values

Leadership commmisCommision Value(5

648
12%
77.76
648
12%
77.76
648
12%
77.76
648
12%
77.76
648
12%
77.76

Rep Sales 1 CommiRep sales 2 CommisiTotal

$93.75
77.76
77.76
$187.50
77.76
77.76
$360.00
77.76
77.76
$480.00
77.76
77.76
$600.00
77.76
77.76

$249.27
$343.02
$515.52
$635.52
$755.52

Rep Sales 1 CommiRep sales 2 CommisiRep sales 3 Commis

$81.25
77.76
77.76
77.76
$162.50
77.76
77.76
77.76
$243.75
77.76
77.76
77.76
$416.00
77.76
77.76
77.76
$520.00
77.76
77.76
77.76

With 2 Reps
With 3 reps
$249.27
$314.53 Not generating 1500$alone in these cases
$343.02
$395.78

$515.52
$635.52
$755.52

with 2 level 2

$856.96

$477.03
$649.28
$753.28

with 3 level 2

$908.80

with 2 in level 3
with 3 in level 3
$1,025.44
$1,142.08

with 2 in level 4
with 3 in level 4
$1,180.96
$1,200.40

Selling all Alone

125
320
480
640
800

Total
$184.01
$290.26
$485.76
$621.76
$757.76

Total

these cases

$314.53
$395.78
$477.03
$649.28
$753.28

Selling as Leader
Selling as Man Selling as director
295.09 N/A
N/A
376.34 N/A
N/A
457.59 N/A
N/A
629.84
921.44 N/A
694.96
1025.44
1200.4

1
2
3
4
5

year
year
year
year
year

Total Sales Representat

2006

2007

2008

2009

2010E

643

753
515

2,389
603
412

2,413
1912
483
330

3,818
1931
1530
387
264

643

1,268

3,404

5,138

7,930

Reducing 20% from every tranche every year.

Exhibit 1a.

Commission Structure

Commission Structure

Basic Commission (% of Sales)

25%

Commission for Sales Reps with > $1,000 in monthly sales

32%

Exhibit 1b.

Leadership Dollars: Schedule by Type of Sales Representative

Level 1 Team Members

Level 2 Team Members
Level 3 Team Members
Level 4 Team Members

Leader
5%
3%
2%
1%

Manager
10%
6%
4%
2%

Director
12%
8%
6%
3%

Exhibit 2a.

DBK Financials: Key Revenue Drivers

2006
$4,999,968
89,556
$55.83
643
$7,776
$648

2007
$10,659,963
205,000
$52.00
1,268
$8,407
$701

2008
$28,815,094
542,215
$53.14
3,404
$8,465
$705

2009
$46,439,975
880,713
$52.73
5,138
$9,039
$753

2010E
$74,283,586
1,402,624
$52.96
7,930
$9,367
$781

$1,200
3,470
5.40

$1,252
7,086
5.59

$1,344
20,884
6.14

$1,344
33,517
6.52

$1,428
50,459
6.36

$835,968
17%

$1,788,704
17%

$747,616
3%

$1,393,199
3%

$2,228,508
3%

$7,776

$8,407

$8,465

$9,039

$9,367

2006

2007

2008

2009

2010E

Revenues
Cost of Goods Sold
Gross Profit

$4,999,968
$2,049,987
$2,949,981

$10,659,963
$4,370,585
$6,289,378

$28,815,094
$11,237,887
$17,577,207

$46,439,975
$18,575,990
$27,863,985

$74,283,586
$29,713,434
$44,570,152

SG&A

$2,599,983

$5,436,581

$14,695,698

$23,684,387

$37,141,793

$349,998

$852,797

$2,881,509

$4,179,598

$7,428,359

41%
52%

41%
51%

39%
51%

40%
51%

40%
50%

Revenues
Pieces Sold
Average Price
Sales Representatives
Annual Sales per Rep
Monthly Sales per Rep

Average Sales per Event

Number of Events
Average Events per Sales Rep
Non-Event Sales
% of Revenues
Sales per Sales Rep
Exhibit 2b.

DBK Financials: Profit & Loss Statement

Operating Profit
Key Ratios:
COGS as a % of Sales
SG&A as a% of Sales

Operating Margin

7.0%

8.0%

10.0%

9.0%

10.0%

Exhibit 3a Estimated U.S. Direct Sales ($ in billions)

2001
$26.69

US Sales
($ in billions)

2002
$28.69

2003
$29.55

2004
$29.73

2005
$30.47

2006
$32.18

2007
$30.80

40
35
30

$26.7

$28.7

$29.6

$29.7

$30.5

2002

2003

2004

2005

$32.2

$30.8

$29.6

25
20
15
10
5
0
2001

2006

2007

2008

2008
$29.60

$30.8

2007

$29.6

2008

2009
$28.33

$28.3

2009

Exhibit 3b U.S. Direct Sales by Product Group

Home/Family Care/Home Durables

24%

Wellness

23%

Personal Care

21%

Services/other

18%

Clothing & Accessories

10%

Leisure/Educational

3%
100%

Leisure/
Educational; 0.033
Clothing &Home/Family
Accessories;Care/Home
0.103
Durables; 0.239
Services/other; 0.184
Wellness; 0.228
Personal Care; 0.213

33

ables; 0.239