8 Challenges of Traditional Revenue Share Programs

As the real estate industry evolves, revenue sharing models have become more prevalent, promising passive income and growth opportunities for agents. However, these models come with a set of challenges that often affect the success and efficiency of the system. Let’s explore some of the common hurdles faced by agents involved in revenue sharing arrangements.

1. Lack of Control Over Downline Levels

One of the main challenges with revenue sharing is that agents often have limited control over their downline beyond the first level. This lack of control can lead to diluted leadership and guidance within the team, as associates look to the lead agent for support and direction, adding pressure on their schedules and turning the experience from passive to active.

2. Pressure to Recruit 

Many revenue sharing systems require agents to continuously recruit new members to unlock higher levels of compensation. This pressure to recruit can detract from agents’ focus on their core responsibilities, as they find themselves dedicating significant time to finding new recruits rather than serving clients.

3. Uneven Compensation Structure 

Some revenue sharing models place more emphasis on compensating downstream agents, resulting in insufficient rewards for those on the first line. This disparity may require lead influencers to spend substantial effort recruiting or training others to ensure sufficient compensation for themselves.

4. Responsibilities of Lead Influencers 

Lead influencers often shoulder a large portion of the value proposition, including coaching, training, and lead generation. This can be overwhelming and lead to burnout, affecting both their personal income and team performance.

5. Unpredictable Expenses 

Profit sharing models tied to brick and mortar locations can be flawed, as lead influencers have no control over the profitability of these physical offices. This can lead to uncertainty and fluctuations in income.

6. Personal Income Decline

In many cases, lead influencers experience a decline in their personal income due to the time and effort dedicated to managing their team, potentially impacting their own sales performance.

7. Complexity in Understanding 

Some revenue sharing models have intricate levels and percentages that can be difficult for agents to understand and follow, leading to confusion and frustration.

8. Commission Compression 

In the brokerage model, revenue share per transaction can be significantly lower due to commission compression in the industry. On the other hand, team revenue share can be more favorable due to team commission structures.

Glover Agency has created a SIMPLE Revenue Sharing program that associates who wish to grow their passive income, while still maintaining a healthy real estate business, can take advantage of. Our Revenue Sharing System rewards associates in a bigger way on the front end AND even bigger on the back end when their recruit increases their production and thus their revenue.