Millions of people join MLM and Networking Companies
everyday and do not understand the compensation plans.
There are millions more in networking companies right now
struggling and have no idea that they will never make any
money in the company they are in because the compensation
plan, most likely is impossible for them to have any
success.
My experience, when coaching others in this industry who
are building a good business as I am, ask the same question
about not understanding compensation plans. My question is
would you start a job without knowing how you are paid? Of
course you wouldn't. So why would network marketing be any
different? The thing is we really don't know how to look at
compensation plans and some of them are extremely
complicated. Here is a tip for you to figure out if the
compensation plan for the company that you are either with
or looking at is any good.
First, find out the minimum amount of product that you have
to order every month. Then determine how many people you
would need actively ordering within your entire team, every
month, to make the income that you want. It is that simple.
Let me explain. When you look at the number of people who
actively order your product every month, to make a residual
income of "X" amount of dollars, you can determine if it is
worth your time and money for your efforts.
Let's use ten thousand dollars as a reference point. How
many people do you need to make ten thousand dollars of
true residual income every month? I use ten thousand
dollars because it is a simple value to calculate.
Secondly, if you want to make twenty thousand, multiply by
two, if you want to make five thousand divide by two and if
you want to make a thousand, divide by ten. So ten thousand
dollars is a good way to determine if the compensation plan
for any company is good or not.
The sad thing about this industry though is when you
average out all the compensation plans of different
companies, you start to realize that in order for any
individual in network marketing to make ten thousand
dollars a month, they would have to build a team of about
twenty-five hundred people. That is, to make ten thousand
dollars per month of residual income, a distributor needs
about twenty-five hundred people actively ordering every
month! How is that likely to happen? It's not. This is the
reason most people fail in network marketing.
That is the sad part but here is the good news. Once you
start to look at compensation plans from this perspective,
you start to notice things. Like, if I need a thousand
people to start to make money, this is definitely not a
good opportunity. There are worst companies than that.
Other companies you need two thousand to make ten thousand
a month. I've seen companies where you can make ten
thousand a month with less than four hundred people.
So if you look at it from a part time person's perspective
and there is a company where they need twenty-five hundred
people to make ten thousand dollars, that would mean for a
part time person working one or two hours a night to make
only a thousand dollars of extra income, would have to have
a team of two hundred and fifty people actively ordering.
How likely is that to happen with a part time person? Not
too likely. But if you're in a company where you need less
than four hundred people to make ten thousand a month,
divide that by ten, now it means your part time person can
make a thousand of part time income with less than forty
people. Now that is a lot more doable for your part time
person than two hundred and fifty people.
So the way I look at it is what is your time worth? For
example, you are building a business in network marketing
and you have to build a team of twenty-five hundred people
to make ten thousand a month and, your next door neighbor
is in a company where she needs less than four hundred
people to make ten thousand a month. Well, you're both
putting in the same efforts in building your businesses but
maybe your making about five to ten dollars a hour compared
to your next door neighbor putting in the same amount of
effort, who is making two hundred or greater per hour. I
think your effort is worth two hundred dollars per hour. If
you don't agree, that's ok.
So when you start to look at compensation plans from this
perspective, you can literally determine if it is a good
opportunity or not. I hope this help those who are either
looking to get into network marketing or those who are
already in a network marketing company.
----------------------------------------------------
Kerry Johnson is a Mentoring Coach.
http://www.skoshabizonline.com/MFF1.html . Join up it's
free and we will train you to build big in any Network
Marketing company. Get your free EBook "Success in 10
steps" http://www.skoshabizonline.com/mff5.html .
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