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
27,416
Equals net gross commission
$1,042,708
Less agent commission
910,671
Equals company dollar retained
132,037
Less KW approved expenses
58,378
Equals KW profit
$ 73,659
How Downline Profit is Earned
Step 2 - The MC Splits the Profit
LEVELS
PROFIT
SHARE
POOL
OWNER
PROFIT
1). 1st $2,990
of profit
25%
$747.50
75%
$2,242.50
2). Next $8,250
of profit
35%
$2,887.50
65%
$5,362.50
3). Profit over
$11,240
50%
$31,209.50
50%
$31,209.50
Totals
$34,844.50
$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 21st 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
% SHARE
WHOLE
RECEIVES
1st
50%
$475.02
$237.51
2nd
10%
$475.02
$47.50
3rd
5%
$475.02
$23.75
4th
5%
$475.02
$23.75
5th
7.5%
$475.02
$35.63
6th
10%
$475.02
$47.50
7th
12.5%
$475.02
$59.38
Total
100%
$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 / downline 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