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Multi-Level Marketing

Direct Sales Companies Are The Business Of The Future

Direct Sales CompaniesDirect sales companies can be separated into two classes:

The first type of direct sales companies are single-level marketing which means that sales representative, the host, the rep or whatever you’re going to call it deals directly with the clients. Their income is in direct proportion of the amount of product they personally sell.

Some direct sales companies you might have heard of, that falls under this type of marketing category are: the cosmetics of Avon, kitchen supplies from Tupperware, Pampered Chef, etc. Usually commission rates are a little higher than their multi-level marketing counterpart.

This leads me to my second point. The second type of direct sales companies are multi-level marketing. Multi-level marketing companies are the ones that can be easily mistaken for “those pyramid schemes” and sometimes can suffer from the negative stigma. Their “per sale’s” commissions are generally lower from their single-level marketing counterpart.

That being said, it is structured in a way that you can make an override commission on the sales of the other sales representatives on your team, which is pretty good. Some legitimate direct sales companies that you might have heard of, that falls under this type of marketing category are: the vitamins and nutritional from USANA, the world’s largest telecommunications company ACN and there’s a whole lot more.

Now which one of the categories are the best? Well it depends of what type of person you are. If you are a hustler and hate teaching your skills to others that you might view as your competition, then single-level marketing is probably best for you. You’ll get a 100% of your own efforts, larger commissions from each sales and it’s the fastest way to get into profits. The draw back from this type of sales is that if you fall sick or for whatever reason you can’t perform, you can’t do any sales, then you get nothing coming, no more revenue.

If you’re looking at this in the long term, then multi-level marketing offers you a way to leverage your time and effort. Not only you have to sell the products or services, but you also build a team of other representative, you train them and show them how to become successful sales people. This is a little bit more work at first, and a little bit more time before you turn your time investment into profits.

The beauty of this multi-level marketing model is; say you have 100 sales representatives in your organization, you’d get 1% of 100 people’s sales effort. Obviously this is over simplified but it makes it easy to understand the concept which means that if you do fall sick or you can’t work, you’d still get 1% of 99 people’s sales effort.

Find Legitimate Direct Sales Companies

Legitimate direct sales companies are governed by the Direct Selling Association’s (DSA) where they adhere to their code of ethics:

Side Note! If you are looking for a new career from home or to simply supplement your income part-time, you can realistically make money with direct sales companies as a consultant, a representative or a distributor.

“The cornerstone of the Direct Selling Association’s (DSA) commitment to ethical business practices and consumer service is its Code of Ethics. Every member company pledges to abide by the code’s standards and procedures as a condition of admission and continuing membership in DSA.

The DSA Code of Ethics speaks to both the consumer and the seller. It ensures that member companies will make no statements or promises that might mislead either consumers or prospective sales people. Pyramid schemes are illegal and companies operating pyramids are not permitted to be members of the DSA.

The DSA Code of Ethics is enforced by an independent code administrator who is not connected with any member company. The code administrator will do everything possible to resolve any complaints to the satisfaction of everyone involved, and has the power to decide on remedies. All member companies have agreed to honor the administrator’s decisions.”

If you are looking for a new career from home or to simply supplement your income part-time, you can realistically make money with direct sales companies as a consultant, a representative or a distributor. Visit the DSA’s direct sales companies’ directory to view who’s legitimate.

What about you, do you see yourself with single-level or multi-level direct sales companies? Share your thoughts.

 

A Qualified Prospect Will Thank You For Watching Your Biz Opp

Qualified ProspectOk, by now if you’ve been reading my stuff or watching my videos you’ve probably heard me talk about targeting your business promotion to a qualified prospect. But what is a qualified prospect? A qualified prospect is a segment of an audience that falls under your search criteria that would be your perfect ideal client. In other words they are your: target market, target audience, qualified lead, perfect lead, etc. You get the point.

In business, this knowledge separates you from being a professional marketer with an amateur marketer. Allow me to explain. Let’s take me when I was a realtor for example. I didn’t want to market my services to everybody, that would have cost me tons of money and I wouldn’t have got good leads. I didn’t want to force somebody or use pressure sales technique for someone to want to sell their house. That would have led to bad customer service, feelings of guilt on the seller’s side, no referrals and a bad word of mouth reputation.

Instead, a good way to get qualified leads for free is to volunteer your time to hold open houses for other realtors. When people come in the house to visit the open house, obviously they are looking for something. Just the fact that they’ve got there on their own time says a lot. They didn’t need convincing, they are looking and are on the hunt and because they are looking, one can conclude that they more than likely will sell their other house. Now that is what I call a perfect qualified prospect through an awesome lead generation technique.

Another method to find qualified prospects is to hold a free real estate seminar on “how to buy your first home”. Obviously this would be for the realtor who’s targeting first time home buyers. The fact that the realtor would give his time educating people does many things. For one, by giving value, it attracts lots of people, not any kind of people but “qualified” people who are in the market. Second, by having lots of people at one event, the realtor is creating social proof and showing himself as a leader, an expert or an authority in the market. People will want to do business with him because they will feel like they know him.

When it comes to the warm market (friends and family), the realtor may send a letter to all his friend and family letting them know that he’s changed his career that he’s now a realtor. He lets them know or offers tips and tricks about the market but never puts pressure to sell their houses. As a business owner the realtor simply can’t mix emotions with business in that context. Some of the realtor’s friends and family will even hire other realtors and it’s nothing personal, doesn’t mean they don’t like him, they have their own reasons and it’s nothing personal.

Only A Qualified Prospect Should See Your Presentation

Now looking at MLM recruiting, you need to have a qualified prospect to see your presentation. What are the best traits your qualified prospect should have? A pulse doesn’t count!  lol. You need to be a little bit more specific than that. Example: For me a qualified prospect is someone who:

  1. Is sick and tired of the status quo.
  2. Doesn’t like their job for the life of them.
  3. Doesn’t want to be bound to one geographic location and wants to work from anywhere in the world.
  4. Knows there’s a better life waiting for them out there.
  5. Knows they’ve got to work hard and put lots of time in but they’re just not quite sure where to start.
  6. Knows that giving the right circumstances, the right teaching, the right mentor, the right direction, the right opportunity, they can completely change their life.
  7. They make no excuses and blame no one for their past, present or future successes or failures.
  8. They assume full responsibility for their actions.
  9. They want to learn how to give value and get paid at the same time.
  10. They know that they will have to spend money in education and advertising to promote themselves
  11. They know why they want change their lifestyle and embark on a new journey.
  12. They have a burning desire to become a better person and influence the life of others for the best.

Now do all your friends and family have all that? More than likely they don’t. I know mine don’t. All that to say that it’s important to let them know what you’re doing when having casual conversations and asked: “What’s new with you?” or “What have you been up to these days?” by answering something like: “Oh I teach people how to work from home. What about you?” And leave it as that. If they want more information, they’ll come back on that nugget of information and then you can direct them to your website. If they don’t ask more information about it, it means, they are happy with where they are in life, they have no burning desire to change which means they are not a qualified prospect.

Remember, never pitch your opportunity to a non-qualified prospect. If they don’t give you hints of burning desire for a change, they won’t even bather coming to see or watch your presentation and trying to convince them won’t help your cause. It’s nothing personal, it’s just part of doing business the smart way. A qualified prospect will thank you when you’re offering your business solutions to them and they will appreciate your professionalism. So don’t spam your friends and family!

What about you, what does your qualified prospect look like?

MLM Recruiting The Wrong Way Will Kill Your Social Status Part 3 of 3

MLM Recruiting Part 3Yesterday we’ve seen how you, as a prospect in our story line, were exposed to a wrong approached by your niece which brought up many questions. You’ve answered her and now she followed with her script again and proceeded to handling your objections. Well that’s what she thinks she’s doing but in reality, there’s a lot more that’s going on. Let’s have a look.

MLM Recruiting Part 3 – More Red Flags

Your niece has been so blinded by the dollar sign and the promises of the opportunity that she doesn’t even ask you about your website. Instead she uses one of the cheesy old school objection handling methods that she’s just learned and flatters your ego by saying stuff like: “Wow, you’re totally knowledgeable, you’re sharp, smart and I totally need your opinion, can you make it Monday instead or perhaps Tuesday?”

Here are the flaws and the danger of burning bridges and what’s killing her social status:

First, she brushes off your response by not acknowledging it and jumps straight in flattering your ego. It’s usually done by compliments or praising of your other successes. Which makes you ask: “Did she even read my offer to help? It sounds like she just jumped on part 2 of objection handling in her script without even following the flow of the conversation.”

She didn’t listen to the logical scenario which clearly demonstrates that she has a lack of understanding in business, customer service and sales. Yet after offering help by essentially saying: “You need more education to grow your business“. She disregarded your offer to help without acknowledging it which leads to the question: “Is she just going off a script and not even listening to my suggestions?”

You know that she is tenacious because she’s trying to regain control of the conversation by re-inviting you by offering you alternative times, even after telling her you’re super busy which is a polite way to say no thank you. This time asking if you can come to tonight’s presentation or tomorrow night’s which leads to this questions: “If she can change her schedule just like that, so fast and all of the sudden become available tonight for me, is she not busy?

Is she not in demand? If she’s not in demand, why is that? Is it that bad, that people don’t even want to spend the time to hear about it? She still hasn’t told me anything about it. It still looks sketchy to me therefore based on my previous experiences in the industry and knowing what’s going on, I still don’t have time and even if I did, it’s not worth it. I’ve got better things to do.”

So you call her out again politely saying:

“I agree that network marketing is one of the best wealth vehicle out there and thank you for thinking of me. I know you’re prospecting but I’m not a qualified prospect for you right now. That being said, it’s got to be done right. That if you use those approaches and techniques and persists too much you risk to burn bridges with the relationships of your friends and family and give a bad reputation to the network marketing industry. When you’re MLM recruiting, it’s one thing to ask the right qualifying questions once but to never insist. Right away asking for personal favors puts you in a position of “desperation” which is bad business wise.

Do you see a doctor run to all his friends and family “begging” them to become his clients? Do you see the restaurant owner running to all his friends and family and depend on them? They offer their business solutions to them but they don’t insist or depend on their business.

The method you’re using right now is like fighting an up-hill battle. You should be using qualifying questions to see if there’s even a need to gain financial independence, lose weight, save money or whatever it is the solution you’re offering. It’s got to come from the right posture and right attitude. You should be addressing the “red flags” questions in your potential prospect’s mind in first message before they even think about them.

Mixing business and relationships is delicate and if you do it wrong it can really hurt your relationships in the long run. Again if you want more network marketing training, I highly recommend you take a closer look at my tutorial videos. It’s a hard reality check but I rather give you a heads up before you run in blindly and go through all the same mistakes I’ve gone through over 10 years ago.

Not everybody will understand where you’re coming from and what you’re trying to achieve, but I do. Good luck.”

She finally gets the message, stops the annoying pressure and backs away thanking you. She still doesn’t asks for your website so you know that she’ll just keep hounding other people using the same approach.

MLM Recruiting Conclusion

In conclusion, in theory and for illustration purposes many network marketing companies demonstrate the compensation plan saying if you just recruit 2, which recruits 2, which recruits 2 at the 7th level you’ll have X number of reps in your organization.

This works well on paper. In reality, life is not fair, not everybody will join your opportunity, in fact, in practice, it’s a lot more difficult than that. You’ll see that you’ll have to personally recruit at least 100 people in order to get 5 super stars that will actually do what you’re doing, which is to recruit a 100 over their lifetime. If you think recruiting 2 is too difficult, than you’re either doing it all wrong or you’re in the wrong business and this model is not meant for you.

People come and go, you’ll have people come in through hype but when they realise the amount of actual work they’ve got to put into it they’ll quit. This is called the attrition. Your goal is to have more people coming in than leaves. You’ve got to balance your energy and effort by recruiting and training. Motivating your team is good but it shouldn’t be your priority, if someone is not motivated to work, don’t waste your time on them. Focus on recruiting, recruiting and recruiting more.

People will follow leaders who lead by example, who gives and provides value. If you offer no value and expect to be successful doing pressure sales, you’re not going to go far. If you’re a super recruiter but using methods that are not duplicatable you’re team will not grow and you will not taste the true leverage of residual passive income.

MLM is a like a sort of mini franchise, you’ve got to work hard, smart and be consistent at it. It’s a professional business and you’ve got to treat as such. One of the biggest reasons I believe it’s so good is that it offers a way for people with a limited budget to have their own business for themselves but not by themselves with unlimited income potential.

Not everybody will join your MLM business and that’s ok. If other people have their own MLM business they are trying to grow, respect their choice and don’t fall into the: “my MLM is better than yours” childish name bashing. This looks unprofessional for the entire industry. Not everyone’s the right fit for your opportunity but the beauty is, we live in world of abundance and there’s always somebody else looking for your solution. You just got to put yourself in a position where they can find you.

From the recruiting process to the close of the sales, it’s a series of steps that has to be followed to a “T”. Think of it as a phone number.  There are 10 digits, if you miss one, you got the wrong number. The same applies in this business. If you miss one step, whether asking the right qualifying questions, coming in with the wrong attitude, you’ll get the wrong response you’re looking for.

When you work as a network marketer essentially you’re a sales rep, you’ve got to sell people on watching your presentations or coming to meetings and know how to close the sales. Some people need more network marketing training than others and that’s normal. As a former real estate realtor and life insurance sales professional I can tell you from a fact that every skill can be learned and you can achieve excellence through training, practice, repetition and course correction. But you’ve got to work with what works best for you as a person as well, there are many different approaches.

I’m sharing this because it’s based on a true story. I’ve altered it a little bit to keep privacy but essentially I go through that all the time. I get approached constantly and now I simply call them out on it to save my time and teach them a better way. I was asked for years to put something together. I was reluctant about it but finally gave in hence why I created this website. I was reluctant at first because I was and still am busy, focusing and working on my professional stunt career. But anyways, that’s just a gist of my story.  haha  Seriously though, if you want more training or tips, you can check out my prospecting for MLM Leads page.

What about you, did you learn a thing or two and if so, what exactly? Share your thoughts, cheers!

MLM Recruiting Part 1     Part 2     Part 3

 

MLM Recruiting The Wrong Way Will Kill Your Social Status Part 2 of 3

MLM Recruiting Part 2Yesterday we’ve seen an example of a poor MLM recruiting approach that raised many red flags in your mind (remember, you’re still in character, you’re the successful network marketer and now you’re the prospect). Remember, your niece sent you this message: “Hey, I just started something which I think you’re going to like. Can you come to a presentation Wednesday?”

So let’s dive in and understand what’s really going on behind the scenes in this scenario and why it’s wrong.

MLM Recruiting Part 2 of 3 – The Red Flags

First off, your niece gets in touch with you when they never did in the past. Right away it’s kind of suspicious, sketchy and leads to the question “What does she want?”

She “started something” and now she wants you to go to a presentation. Yes perhaps it’s true but right away that’s screams “I’m a beginner and I want you come to a presentation” so someone else you don’t know can try to sell you on something you don’t want or need. She hasn’t offered you any value or reason why you should attend, which makes you ask: “Why should I make time to see a presentation, I’m already super busy? And why is she so elusive, what does she have to hide? … Oh I know, she’s trying to pique my curiosity. As if I’ll fall for that, that’s so 1970 to 1995”.

When you’re successful and busy, you know that the commodity you lack of, is time, so to go out, drive to a location, listen to a presentation from a stranger that you have no idea about what the topic will be about and drive back is even more time wasting: “If it’s so important why doesn’t she come over to my place and show me what it’s all about herself? After all, she’s the one that wants me to have a look at it, not the other way around?”

You know she won’t give you the presentation because she’s not a sales person, doesn’t have the experience and can’t deliver it as good as the professional would. So instead she’s trying to use emotions by using your relationship and ask a favor of you, which will cost a minimum of 3 hours of your precious time to be put in front of a salesman.

Then you know if you do join whatever it is, you’d have to involve more time to try to build a new business and frankly, you know you just don’t have the time. Looking at it this way, it’s kind of selfish on her part to get you to do all that in order for her to build a team. She’s not acknowledging the fact that you’re a busy person.

She haven’t even qualified you to see if you’re even busy working on other projects. She totally skipped out on the rapport building and she went straight for the close which makes you think in a sarcastic way: “Okay, I’m fine too, thank you for not asking?”

Being in the industry and business for over 10 years, she must take you for a fool (ok maybe not literally, it’s more of a beginner’s ignorance), after all, it’s not the first time you’ve been approached this way, in fact, because you’re in business, you’re being approached all the time and it’s getting annoying: “Does she really think I haven’t heard that before. This is the kind of approach done the wrong way that hurts the reputation of the industry.”

After calling her out on it: “Sounds like your MLM recruiting me for your network marketing opportunity and you’re using 1970 ways to recruit. lol Sorry but I’m busy working on my blog and video channel teaching modern MLM recruiting methods. You should check it out, you just might learn a thing or two”.

You’ve planted the seed and you purposely didn’t give out the URL as you’re qualifying them to see if they will ask you for it. If not, you know better than wasting your precious time on “tire kicker” or non serious people. Why help someone who doesn’t want help? You know that by delivering value, people are naturally attracted to you and look at you as an expert and this is how you frame yourself to be the expert by asking qualifying questions or saying qualifying statements.

You’re not looking for people to come and join your opportunity, people come to join you and they want to be guided by you and mentored by you. More on attraction marketing here.

Your niece is pretty clever though. She learned at her MLM recruiting training that people might offer some objections so they learned the art of objection handling.

MLM Recruiting Part 2 Side Note

Ok side note, this makes me chuckle because I have a background in martial arts and this would be the equivalent of a white belt challenging a second or third degree black in a sparring match. Yes, the niece started martial arts, which is great, congratulations for her but there’s still a lot of learning ahead of her. Learning how to handle objections is a great but it’s got to be within the right context.

In our scenario so far, the niece is bringing her new learned techniques, sort of like new martial arts techniques, against a gun fight. What I mean by that is, it doesn’t matter how good she is at handling objections, if the prospect says: “NO” it means “NO”, there’s no point and trying to force it down on the prospect. Again, the more she insists, the more she’s killing her social status and reputation. She’s trying to impose her will by using pressure sales and using guilt trips. THIS IS BAD! Businesses shouldn’t run like that.

Let’s say somebody join’s your niece to “get her off their case”, this will not be duplicatable as they will have no interests in building that business, there’s no drive. It’s like, she can’t force a horse to drink water.

But in our scenario, the more she keeps pushing, the more the you the prospects will resist and the more the prospect resists, the less chances she’ll have at ever recruiting our “successful character” in the future. This method triggers all the defense mechanism that are hard wired in the human being for millions of years.

Join me in tomorrow’s final chapter of our little MLM recruiting scenario. Tomorrow we’ll explore how she handled your answer, what the new set of red flags are and questions that they bring up in your mind (remember you’re still in character). You’ll also get my final thoughts on this scenario and the truth behind the layers of hype.

What do you think is going to happen next? Share your thoughts, cheers!

MLM Recruiting Part 1     Part 2     Part 3

MLM Recruiting The Wrong Way Will Kill Your Social Status Part 1 of 3

MLM RecruitingMLM recruiting done wrong will burn bridges between you, your friends and your family. Take a closer look at your invite scripts and make sure you’re not doing these critical mistakes in your MLM recruiting process.

Allow me to paint a scenario so you can see what’s really going here.

Ok you just signed up in a new opportunity. You’re super excited, you just finished your MLM recruiting training and now pedal to the medal you’re out MLM recruiting and hustling to get your new MLM business off the ground.

You can see your future, you know your why, your vision is clear in your mind, you can taste the lifestyle and the residual income changing your life. You then go out in the “real” world then bang, your first rejection. It’s ok, you learned a couple new objection reversal and bam, second, third and fourth rejections and they keep on coming and coming and coming.

You go out and ask people to come to your presentation yet it seems to be so difficult, it’s just emotionally draining. After doing the rounds of your friends and family once, then you go a second time and plead your friends and family to at least come and watch it just to save face, not feel the guilt of not bringing anyone and show your upline that you’ve got some new faces in the room. “It’s a numbers game” they tell you, “for every 10 you bring, 1 will sign up” they say.

Well it’s not always the case, those stats are misleading and they’re not comparing apple to apples, maybe it’s the case for them as expert in the industry but as a beginner, those numbers are not supper accurate, everybody’s different, it’s not just a numbers game, it’s also a skill set.

It turns out to be a lot more challenging than it really is. People are busy, they no show and after a while you get discouraged, then you see all your dreams vanishing away, disappearing in the darkness. Does that sound familiar? Well, it doesn’t have to be that hard. Natural born leaders can make that method work pretty well for them.

They are people of influence and people follow their lead no matter what. Unfortunately, not everyone’s gifted in that MLM recruiting area. To know if the warm market approach will work for you, look at yourself in the mirror and compare yourself amongst your social peers and ask yourself: “Am I the leader of the group?” If not, then this approach will more than likely not work for you.

If you keep on insisting for your friends and family to show up to a presentation or to join, after they told you “No” a bunch of times, stop and think about it, how do you think that would make them feel? How would it make you feel to know that you are, not knowingly, applying pressure sales techniques by using the emotional card?

Now let’s say in the future, you try to reach one of your friends or family member; would they purposely try to avoid your calls thinking that’ you’re just going to try to do your sales pitch again?

This is how, without your knowing, your start burning bridges little by little.  Over time people will start to talk about you in your back saying how annoying you are and how you’re brain washed into something sort of cult. If you don’t pick out those social cues and body language soon enough, your wrong MLM recruiting ways will slowly kill your social status.

MLM Recruiting From Your Prospect’s Perspective

Now it’s important to understand why this is happening, and for that, we’ve got to look at it from the prospect’s perspective. So let’s turn the tables around. You’re a busy successful person, business savvy, you’ve been involved in network marketing for nearly 10 years and are a pro at MLM recruiting.

You know the modern 6 approaches (and counting) and that the warm market is only one of them. You know how to properly handle the warm market and know what’s socially acceptable in our modern society and our era of unlimited information at our finger tips.

You know that you have to qualify prospects to see if they are even open to see or hear about a business opportunity before you even make the invite. That will give you a qualified prospect. You’re working hard on your MLM business, you’re busy and got a lot of stuff on the go and then you get an e-mail from your niece out of the blue, that asks you if you’re open to see an opportunity and that if you’d be available to come to a presentation Wednesday night.

Because you’ve been around the block for so long, right away all the MLM recruiting red flags from the approach are kicking in.

Join me tomorrow to find out what those MLM recruiting Red Flags are and what questions really goes on in the back of your mind. Remember, stay in character, you’re still the successful network marketer and now you’re the prospect.

What about you, what do you think those red flags are? Share your thoughts, cheers!

MLM Recruiting Part 1     Part 2     Part 3

 

 

What Is An MLM Company And How Do They Profit?

What is an MLM companyI’ve broken down this article (about what is an mlm company and how do they profit) in two parts to make it easier to grasp. The first part will focus on what is an mlm company and the second part on how do they profit.

So, “what is an MLM company you ask?” It quite simple actually, MLM stands for multi-level marketing also known as network marketing which falls under the direct sales category (like “Tupperware” except Tupperware is a single level, not multi level.).

All companies, whether traditional or direct sales have to move products in order to stay in business. When I say move products I mean sell products. Traditional companies chose the route of advertising, going through national distributors, regional distributors and finally local distributors before it hits the store shelves. All of these different “steps” take a portion of the profit which is then factored into the cost.

Direct sales companies instead chose to go straight from the company to the client going through “representatives”, “distributors” or “party hosts”. Almost each company has their own lingo. Essentially they save the cost of advertising and branding which is a huge chunk of the pie. Instead they chose to put those profit into better quality products, research or into savings for the customer.

Because these companies have less overhead and less employees, this is another source of significant amount of savings. Reps only get paid a percentage commission when they sell products which is performance based. In return, reps which can literally be any body, have the potential to make huge amounts of profits if they sell a lot.

Hopefully that answers the first part of the questions: “What is an MLM company?”

What Is An MLM Company And How Do They Profit Part 2

In the previous section you’ve learn about “what is an mlm company” and now let’s focus on how they profit.

Here’s the original question that I was asked: “How do MLM Companies profit when they pay the members on the basis of the number of members that join the network; and they pay them big?”

I found that to be an excellent question since not everybody new understands how it works. There’s a rational explanation for this and here’s how it works.

Companies have a maximum payout for the “commissions/residual income” that goes to the upline for recruiting.  There are all kinds of restrictions and qualifications to make sure the compensation plan doesn’t “bust” so to speak.

Side Note! First of all, companies never pay for a new recruit to join in. If that were the case, that would be considered an illegal pyramid scheme as the flow of money is from recruiting (which is bad), so if you see this anywhere, it should be a red flag and run away from that opportunity.

First of all, companies never pay for a new recruit to join in.  If that were the case, that would be considered an illegal pyramid scheme as the flow of money is from recruiting (which is bad), so if you see this anywhere, it should be a red flag and run away from that opportunity.

Legitimate companies pay people based on the product or services they sold and sometimes the companies throws in bonuses as incentives.

Let’s say that a company pays out 60% of all revenues.  That means on every product or service sold they collect 40% and only the 60% is divided within the commission structure.

I’ve also seen 100% pay out commissions but when you scrutinize the commission plan carefully you see you get 100% commission of the product or service however you must pay a “reseller fee” of either $25 or $100 per month.

So this can be good and bad depending on how much volume you personally sale.  MLM is a business at the end of the day, it has to make money in order to stay in business.

Compare it to real estate, some brokerage will offer their agent a 70% – 30% commission split for every house they sale with no desk fees (or office fees), that means the agent keeps 70% and the brokerage keeps 30%.

That’s a form of leverage for broker as he’s receiving an “override” income from the efforts of his own agent.   Now I’ve seen other companies have a 95% – 5% commission split, which is very good but it comes with a monthly desk fee of $2,000 a month.

Again, depending on how much volume you plan on selling one is better than the other.  Option A in this case would be better for a beginner as there is less risk involved and option B would be better for a “pro” who sells a lot of house so the 2k per month is just a business expense yet he still retains most the commissions from his sales.

When the MLM companies get the money, the split goes 40% to the company and the remaining 60% could be split with the distributors or sales force as follows:  20% – 10% – 5 % – 5 % – 5 % – 5 % – 5 % – 5 % – so this would be an example of an 8 level deep compensation as you see, it never surpasses the total revenues meaning, the company never pays above and beyond 100%.

This was simplified for illustration purposes only, commissions structures are more complex than that but at the end of the day, they are all properly balanced so they never payout more than their allowable commissions’ budget.

I hope this helps understand the industry a little better. Click here on the link to learn more about the various types of career from home.

What about you, how long have you been looking to start a new career from home?

Multi Level Marketing Companies 4 Tips Screening Process

Multi Level Marketing CompaniesThere’re SOOOO many Multi Level Marketing Companies to choose from, how do I know which one to join?
In today’s dose of CareerFH we’ll discuss 4 tips when screening multi level marketing companies.

Multi level marketing companies have been springing up, left, right and center ever since the growth of the internet.  The fact that more and more people are looking for ways to make extra money from home created a huge market for multi level marketing companies to jump in and join the ranks of proven track record of current and older multi level marketing companies.

Here are a few critical “must look at and consider” things when contemplating joining multi level marketing companies.

Number 1, look at the company’s stability.  Anything over and above 5 years has passed the critical start-up phase.  There’s a saying that goes like: “95% of new businesses will fail within their first 3-5 years.”  Multi level marketing companies included, there’s no escape.

Essentially, the longer it’s been in business, the more chances of it staying for the long run.  There’s nothing worse than putting all your time and effort into building a large business only to find out your company will shut down in 6 months.  Unless you’re a veteran in the business or a super high risk taker then you should focus on stability.

Side Note! You can only be successful in Multi Level Marketing if you put your entire heart and mind into it. You have to work your strategy on a daily basis.

Number 2, look at who’s the boss.  That’s right; take a closer look at who’s in charge of the multi level marketing companies.  Are the owners network marketers themselves?  Have they had many years of experience building a previous network marketing opportunity?  The reason it’s important to know is that you want to have somebody with lots of experience at the very top.

Because of their knowledge in the “field” so to speak, they understand what representative will need, whether support, compensation, tools, etc.  You can easily find out their contact information online and send them an e-mail or call them with your questions.  If you plan to join multi level marketing companies seriously, you kind of want to know who you’ll be dealing with.  Look for these qualities:  honesty, integrity and genuinely good people.

Number 3, look at their product or service portfolio.  Does their products or services have competitive pricing?  Do they have a variety of products and services to offer?  What about the type of product and services do they have?  For example: if they sell black and white tvs, you know the ones made out of wood that looked like furniture, well, it doesn’t matter how good of a representative you are if the market for that product or service is obsolete.

Number 4, look at the recruiting process.  How easy and simple is it to join the multi level marketing companies you’re looking at?  Are they old school still using paper forms and fax machines or do you have an elaborate back office in your representative’s portal within the company’s website?  Can your potential customers purchase online?

Multi Level Marketing Companies – Conclusion

In summary, when screening multi level marketing companies, having the right set of questions can help you out tremendously to make an informed decision.  Keep in mind that the company you choose to represent is only one factor out of many.  Another big important factor to be successful in this kind of business is YOU!  Your work ethics, you’re ability to be coached and your ability to duplicate will also play a huge role in determining your success with multi level marketing companies.

What about you, what other questions would you ask the multi level marketing companies?

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