Downline Stacking: good or bad?

Many types of MLM require you to build a business before they promote you. I would like to address these types of MLMs and how a strategy of stacking can be good and bad.

The main purpose of building a network of people below you is to build a residual monthly income. In doing this you need distributors below you who push whatever your company is selling. Every time there is a sale you get a small percentage of that sale usually depending on how far away that distributor is in relation to you.

So then the issue comes up: Do you try and promote as fast as you can or do you try to build as wide as you can?

Stacking
Pros: You will be able to promote yourself easier by placing key distributors to where they are needed. You don't have to guess. There is less random growth and you are able to grow deeper. Some companies pay your more residual the further away the distributor is to you so going deeper is better. This is only a good option if this actually helps you to promote.

Cons: You will lose the direct commissions as you will be giving them to the distributor instead of you. Some companies have less residual the further you are from you. Building deep cripples the width of your organization and you will have less people in certain high dollar residual levels. In the long run you would have gotten less by having a tall organization than a wide one. Many companies cut you off after a certain number of levels. If you build deep you run the risk of having new distributors placed outside of the levels you can collect from and essentially lost that residual for that distributor. If you would have placed that distributor directly under you then the following distributors will not be lost in your organization.

EX: You got a power distributor (leader). Your company cuts off residuals past level 5. You want to promote and you place this leader under one of your level 3 leader so that you can help them while helping you promote. The leader is now in your level 4 and giving you some good residual. This level 4 leader then starts to build their business and they then sponsor 3 which are your level 5. These level 5 distributors then get 2 distributors each. These 6 new distributors are now in your level 6 and you get nothing form them.

If you would have placed that leader under you in level 1 then that leader would have gotten you three level 2 distributors. Those three level 2 distributors would have then gotten you six level 4. Since leaders get many distributors over their life time and down their downline it is risky to place a leader too far down the chain. since teams generally grow wide and continue the further they go then building too far down in stacking could hurt you.

Or course this all depends if the company cuts residuals after a certain level and if you get more or less depending on where they are in relation to you. Over time your organization will eventually go down very far so if you are in a plan that cuts off levels very quickly or has decreasing residual payouts the further you go then that might be an indication that the compensation plan is lacking. If the higher residual is paid higher when closer in level to you then that denotes that you must do more work to get higher residuals. If the residuals are higher the further away they are then that denotes that the company wants you to have a deeper and wider team. Which one takes more work? One that relies solely on you get the residual or one that depends on the organization below you to get you what you want.

If you train properly and start turning distributors into leaders then your organization will take a life of it's own and people will start jumping on in waves. If every one of your distributors built their organization by stacking then you will have a very tall but narrow organization. That will not build you a very large monthly residual.

You are a seed. Build it wide and let it grow like a root system. The wider it gets the more you profit, but at the expense of what you could have helped your own downline grow theirs.

It really depends on how your compensation is setup.

Do you want a large residual or get promoted quicker?