The entire philosophy of the network marketing industry is financial freedom – the ability for you to do whatever you want, wherever you want, whenever you want with whoever you want.
A network marketing business is supposed to be something that you work hard for a few years to build once, then you should be able to retire to enjoy the fruits of your labour and your business should still grow autonomously.
So with that in mind, I want to share with you a little experience I had. A while ago, I thought about joining a relatively new MLM company. I was attracted to the company’s business philosophy and its products. But thanks to training I had received from my mentor, I made a wise decision not to join this company – as good as its products were and all.
As I read the policies and procedures of this company – that is, the contract between you, the distributor, and the company – I realised that I could build this company, but I wouldn’t be able to retire, ever. That’s because the company had “ongoing” activity clauses in its contract. [click to continue…]
If you want to create long term residual income in network marketing and have that support your desired lifestyle, avoid MLM companies with high overhead.
The more overhead an MLM company has, the less chance of success you will have in the long term, because the less commissions it can pay you for the hard work that you do as a distributor. The less commissions it pays, the more people you’ll need to sponsor.
The more you’ll need to sponsor, means your recruits will need to sponsor more as well, increasing their likelihood of quitting the business as they’ll realise little return for their efforts. [click to continue…]
How much money does your MLM company need to just to stay in business every month? Does it employ a large number of people all over the world? Does it operate its own farms and factories? Does it own large, beautiful buidlings? Does it sponsor sports stars, movies stars, football teams or baseball teams?
And why should this matter to you as a distributor? Because you, as a distributor, are paying for all of it. It comes out of the compensation plan. The more you have to pay for all of that “stuff”, the less you get back in commissions and bonuses. [click to continue…]
If you haven’t read Part I yet, “Breakage” is basically money that is kept by an MLM company that could have been paid to its hard working distributors. In network marketing, there’s front end breakage and there’s back end breakage (or compensation plan breakage).
Front end breakage (as discussed in Part I) is designed to take more money from distributors as they are purchasing the product from the company, before they are compensated for a particular business period, whether that be a week, or a month.
Back end breakage is often taken out of the compensation plan. [click to continue…]
“Breakage” is money that’s kept by the MLM company that otherwise could have been given out to distributors in the field. A greedy company would try to create as much breakage in the compensation plan as possible.
Why should companies look after distributors and give out as much money as possible? Because MLM companies are nothing without their distributors. Bare that in mind as you read this…
In the world of network marketing, there’s front end breakage and there’s back end breakage or what’s commonly referred to as compensation plan breakage.
For this article, let’s take a look at front end breakage. Front end breakage is actually built into the business model and here’s how it works… [click to continue…]
Does your MLM company encourage endless recruiting? Or does it encourage you to sell its products to end consumers? Which is better? Recruiting or Retailing?
A steady residual income in the long term requires a good balance of both. Residual income in network marketing is your reward for building a sales force or distribution channel where large quantities of your company’s product gets into the hands of many happy, loyal customers.
Endless recruiting IS NOT a sustainable business model. If your company emphasizes recruiting, you’ve got a tough job ahead because you’ll be recruiting for the rest of your life just to combat the attrition that will plague your downline. Here’s why… [click to continue…]
