Company Compensation Plan – Your Ticket to Financial Freedom

Compensation — One of my favorite subjects.  While it’s a favorite of mine, often it’s a source of frustration and confusion among most network marketers because they either don’t understand how they get paid or they’re simple NOT getting paid or getting paid very little for their very hard work.

It’s imperative that as you venture into the online and/or network marketing arena that you understand how you get paid.

There’s two basic ways that you get paid if you’re marketing online.  Many people I talk to are a only taking advantage of one of the sources.  The other, often goes untapped leaving easy money just lying on the table.  The sources are:  Your Primary Network Marketing Company and Other Related or Affiliate Sales.

We’ll spend most of our time here on Your Primary Network Marketing Company so let’s first briefly talk about Other Related and Affiliate Sales.

Other Related and Affiliate Sales

These consist of a myriad of tools, services and educational products that are either required or wanted by almost every online and network marketer.  Here’s a short list:

• Mike Dillard’s Magnetic Sponsoring, Black Belt Recruiting, Building on a Budget and others
• Aweber or GetResponse autoresponder systems
• Lead Capture Page systems such as MLM Lead System Pro, GVO, or SponsorDaddy.
• Automatic Article Submission Software
• Subscriptions to ListJoe, ViralURL, or Traffic Geyser
• Web hosts such as GoDaddy, BlueHost and Host Gator
• Perry Marshal’s GUIDE TO ADWORDS

Many of these are absolutely essential to running an effective online business and people buy them all the time.  When you, as the savvy business owner, make these products readily available to your prospects and business partners, you can enjoy substantial streams of monthly income just from this process alone.

There’s a complete discussion of this topic in another of the 15 Essentials, Business Essential – A Streamlined Sales Funnel.

Primary MLM Company Compensation

While you may be able to earn fairly quick cash with your affiliate and other related sales, your long-term, rock-solid residual income that comes from your primary network marketing company is a slower build.  And good that it is!  Usually the slower the build, the stronger and more reliable the revenue tends to be.

It’s important to have a good solid company whose leadership is based on integrity and ethics, one with a proven track record (but not too ancient), and a low-overhead streamlined system of doing business, by far, the most tangible component to you, the distributor, is the compensation plan.

You want to be sure that the company will properly reward you for your hard work.  And certainly building your own business in the online/network marketing arena is hard work.  Anyone that tells you differently is either delusional or a liar.

How though can you effectively measure and compare different companies to determine the “best” compensation plan.  I mean it’s easy to get confused with all the binary, ausi-two up, stair-step breakaway, unilevel, forced matrix, ad nauseam.  How can you possibly even begin compare.  It’s worse than comparing an apple and an orange, it’s more like trying to compare a Mercedes with a bowl of Cheerios.  Just can’t be done… or can it!?!?!

Let me give you the simplest way to compare compensation plans of dozens of companies.

Simply ask the question (I call it the $10K, $1/2K Question):  How many active reps and/or customers do I need in my organization to make $10,000 a month? (or $1,000 or $25,000 or whatever income you’re seeking)  And how much commission does the part-time rep make by selling $500 worth of product.

In a few short minutes you can, with that information, easily compare companies.

Let me give you some parameters you can start with.  The industry average to make $10,000 a month is about 2,100 reps/customers in your organization or team or downline.  To look at it another way, if you have 25 active reps in your team, running at the industry average, you’ll make about $130/mo in residual income.  Keep in mind these numbers don’t consider the income you realize when some one joins your team.  There’s usually some kind of nominal or sometimes substantial Front-End Bonus that’s paid for that.

The average income for selling $500 worth of product is about $75-100.

I’m part of a Master Mind Alliance Team that has studied over 125 companies in detail.  One of the calculations we do is the $10K portion of the above question.  While the industry average is about 2,100, the range is vast and somewhat surprising.  Surprising that people will join a company without knowing that they will have to get 7,000-8,000 active reps in their downline before they’ll see $10,000/month.  We’ve found some companies where you need under 1000.  Lowest we’ve found is about 400.

Your first thought might be, well the company that’s 400 must have a very high cost product to make that kind of money.  The answer is no.  Most of the companies where you need under 1000 reps to see $10K/mo have structured the pay to reflect their commitment to pay the part-time rep more — To put more money into the hands of the new rep and make it a little harder to get to the REALLY BIG MONEY in the $$30K+/mo territory.

So do your homework.  Do your due diligence BEFORE you make a decision to join a company.  You wouldn’t dream of going to work at a job without knowing how much they’re going to pay you, so why would you go into business for yourself without at least some idea of how much work you need to do to reach your goals?

If you’re interested, here’s an overview of the company that requires just 400 in your downline to reach $10,000 / mo.

Dennis Volz is the owner of The Red Hot Millionaire Marketing Alliance and the author for The MLM Resource Center .com.
www.TheMLMResourceCenter.com
www.MLM-Toolkit.com

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