Monthly Archives: September 2012

Network Marketing / Direct Sales / MLM Compensation Plan Comparisons

First let me state….in my opinion….that Network Marketing, Direct Sales and MLM companies that pay on levels are MLM. I will refer to them as Network Marketing. So, when looking for the right Network Marketing home based business enterprise, there are many factors to consider for your own personal preference. One of the most important factors when looking, in my opinion, is the compensation plan.

Do you ever feel like….some compensation plans are just too difficult to understand. I mean, sometimes you think some crazy nerdy engineer or mathematician must have created it. And trying to figure it out causes your head to swell! Well you’re not alone. Even with my engineering background most compensation plans give me a head ache.

Also, there’s too many variables to share here when considering choosing a network marketing business with regards to product compensation. While some companies are more generous than others in terms of money, you must also consider market saturation of products being sold, training methodology, sales tools and aids, residual income considerations, outside benefits, personal support, availabilty to market online or offline as an individual using technology…like blogs…marketing systems…funnelling programs and so much more.

For example…Avon is listed on MLM Company Rankings as #1, and while I can remember my mother having a couple of Avon parties, it’s definitely not a business suited for someone like me LOL. Avon, in my opinion, is for the most part a business for women. So your overall prospect base is severely limited. In addition, not everyone can sell skin care and cosmetics or has interest in doing so.

Make sure your company selection process confirms that it’s not only legitimate…meaning it’s licensed with offices in the countries it’s doing business in. It also gets you excited about the products because you will use them yourself.

So partner with a company you feel good about. No Network Marketing company can truly state that they are better than another. And please make sure the company is at least 5 years old! It’s also good to check out the corporate team online. Just google them and see if there are any red flags you feel uncomfortable about. Having trust in the corporate team is paramount. You don’t want to build a serious global business, and then have your income taken away from you because of mismanagement or some stupid policy violation that is most likely fabricated. Remember, you are building a Network Marketing business because you want long term passive income (income that comes in month after month for what you have done in the past).

Here is a short list, again in my opinion, of important factors to consider when narrowing your search down based on products.

1. Do they fill a NEED (will people want it/them)
2. Can anyone use them
3. Are they consumable (re-orders)
4. Automatic Orders – ease of use (your insurance policy)
5. Scientifically Backed by the company (documented even with clinical trials)
6. Wow Factor (people notice a difference in days not months)
7. Priced competitively
8. Good retail program for obtaining customers

Spend the time researching….a few serious days….even a week. And you will be much better off for it! And asking questions is paramount!

If you’re looking into the Network Marketing arena, as a viable business idea, in my opinion you are making a good decision. The Network Marketing business model is growing every single year. Thousands of companies start up each year and go out of business almost just as fast, which means it’s definitely a business model worth looking at. Just like the many technology companies popping up every year competing in the computer industry. More and more people are thinking about Network Marketing because it’s a viable home based business that will create life changing incomes for those who work hard. And in my opinion, working hard for say 2 – 5 years is not much of a sacrifice. Especially when I’m talking about 6-10 hours a week part time. A word of caution though, look hard and long at the  economic business model the company offers. More importantly understand it!

There are a number of things to consider:

I’m going to assume, you’ve looked around and found a company you have an interest in. You’ve done your due diligence and weighed up all the information you found.

Be aware, you will often hear complaints come from people who may have tried the Network Marketing model who didn’t create any income. Maybe they were misled into believing a Network Marketing business was simple. You try hard at your job don’t you? And if you have a business outside the home you work very hard at it also, right? Nothing is simple!

Now when looking and perhaps interviewing support teams….did they leave out the information about the compensation plan? Did you even bother to ask? And if you did was the explanation so complicated that you just don’t get it?

Here’s the deal. A lot of Network Marketing financial rewards programs are actually not hard to understand if you take the time to figure it all out on paper. This is one of the many things you must be putting down on paper to understand…including a plan of action and some personal and business goals. Forget all of the fancy terms and language. Do not be disturbed about completely understanding the biggest difference between a matrix, breakaway, binary, unilevel or even an australian one up structure…..It doesn’t actually matter, in my opinion.

What matters is…are there people making the type of money you deserve to make? Are there people making 10, 20, 30 or even 50 thousand a month after 2-5 years with the companies you’re investigating? Are there people making well beyond that who have been with the company longer? If there are, then know you can also make that kind of money if you partner with the right people, get busy and grow a business.

One thing to do is compare active income bonuses offered. Say for example it costs $1000 or even $1500 to start your Network Marketing business the right way, and one company offers a bonus of $100. You may think it’s a nice sum, right? And when you have a glance at another company’s bonus plan, they might be offering $300 or more. You see, in my opinion, as you begin your business a good company will offer good up front or active income while you’re working to develop long term passive (residual) income. Remember your company’s economic business model won’t be paying you passive income until the third month into your business (which most probably won’t be a lot). So you must be rewarded for being active with fast start bonuses and rank advancement bonuses. Just like in Corporate America…when you begin climbing the corporate ladder many companies offer a bonus and great salary increases. So if there is no bonus for advancing in status/rank, in my opinion, I would not look any further into that Network Marketing business model. I say this because at some point you will be spending more time assisting others with growing their enterprise rather than personally sponsoring yourself….and you must be rewarded for doing so!

It’s all about rewarding the people who work the hardest! Paying the producer right? I mean if you bring more customers or volume to a companies bottom line, shouldn’t you be rewarded accordingly? You bet you should!

Either way, at some specific point everybody on your team is going to run right out of people they know and they’ll have to get involved in marketing. Because Network Marketing is a thinking persons game. It’s all about selling. And selling, because there will marketing, costs money. And if you don’t have a marketing budget set aside, then developing it with active income will allow your Network Marketing business to have continued growth.

So think about the fast start and rank advancement bonus’s as in the bank money, that you can tap into at anytime. They are production bonuses! Just like the men who worked for me many years ago in the refinery got when production numbers were hit, based are goals. You should have volume numbers set by the company with rank advancement bonuses attached. Which will add to and seriously start your marketing or selling campaigns, which in turn will add to your success in the future. These active bonuses are very important so that you can continue to market your business. And the amount of these bonuses and commissions is extremely important to keep your business going.

One more thing…when comparing Network Marketing financial plans, understand what happens when you sponsor a person who goes out and develops a larger organization than you. Will you get paid reasonably for their efforts or, as in most binary programs, do you need to discover a 2nd heavy hitter to balance the effort to get paid.

Bottom line….when you have narrowed your search down to two or three Network Marketing companies, compare their financial rewards plans side by side. Pencil out the numbers and establish which best matches the revenue levels you deserve to achieve. One with a strong active and passive compensation in my opinion weighs the best. Where you can perhaps develop 6 figures in your first year just on the rank advancements, while developing your long term passive income.

Happy Marketing,

Gerry Schroeder

Skype: gerry.schroeder
Office: 705-524-1286

P.S. – If your looking for a great online marketing system to build your business. Second Income Coach is generic and the system professionals are turning to.

Gerry Schroeder is an expert online and offline MLM marketing coach in the Network Marketing Industry. He assists others with creating their true wealth working from the comfort of their home.

Network Marketing Success, Internet Marketing Strategies, Profit Exploding Skill Set Mastery Training, Attraction Marketing Simplicities, Lead Generation

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