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The Best MLM Compensation Plan Ever

Don Standard — Sun, 29 Jun 2008 02:59:53 +0000

Would you know the Best MLM Compensation Plan Ever if you saw it?

What would it look like?

Something Simple? That would eliminate most of the new ones coming out. They are hard to figure sometimes just how good they may be. The simple ones, they can be figured out easily but most people still miss a lot because they don’t know what to look for and how it affects them. But the simple one’s usually don’t look so great to us.

How about a particular type? Binary, uni-level and more? No, that doesn’t do it. You can make any of them great by doing the right things with them. They can all be made to be horrible too.

But what makes one the best? The best for you. Are you the superstar or the newbie part timer? Does it matter?

The perfect mlm compensation plan does not exist. Why? Because it does matter whether you are the superstar or the part time guy. The perfect plan for the superstar is one that pays most of the money to the top guy; him. The perfect plan for the part time guy is the one that pays most of the money out early to him. So the perfect mlm compensation plan can not exist for everyone.

What about the Best MLM Compensation Plan Ever? Still debatable but a clearer issue.

Two things to look for in the plan.

First, how many people does it take to create a specific recurring income. Recurring is what we are interested in because we don’t want another job. We want to do things right one time and reap the rewards long term.

So how many people does it take to create a $10,000 per month recurring income? I have seen 400 active distributors to 40,000 active distributors from major companies where you do about 100 bonus points per month.

It should be obvious that all things being equal, the smaller the number the better. If Adam is in a company that needs 400 and Bob is in one that requires the industry average of 2000 active distributors then Adam will reach the $10,000 per month of recurring income while Bob is still at $2,000 per month.

See the difference? It’s huge. It’s like Adam is being paid $100 per hour for his work and Bob is only making $20 per hour. That should be easy to understand for those of you with a job mentality that you want to discard.

The Second Issue is, how hard is it to reach break even or better. When a MLM compensation plan sends most of the money to the top for the superstar, this has to leave a smaller pie for the people at the bottom. The superstar does deserve more. He effects more people. The team is there because of his work. But how much is the key. If you pay the top too much then it becomes too difficult for the guy at the bottom to reach break even.

I have seen top heavy plans that require 30 to several hundred people for a distributor to reach break even. The problem, is that the harder it is the higher the turn over. The higher the turn over, the more people have to be sponsored to find the number of active people needed.

Again the difference is huge. You want to lower the number of people sponsored as well as the number of active people.

So the Best MLM Compensation Plan Ever must balance this out.

The next question, might be, can the mlm compensation plan with the fewest number of people needed to create an example $10,000 per month of recurring income also be the mlm compensation plan with minimal requirements for the new guy to reach break even.

What do you think? Is that possible?

The answer is yes. It’s been done.

Now you can have the best of both worlds. And when you are at the top making big money, you can sleep well at night knowing that you have a team of people making money and your new guys have put themselves in the best possible position for success.

And that is what MLM compensation plan evaluation and company evaluation is all about. Putting yourself and your team into the best possible position to have MLM Success.

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Your MLM Compensation Plan – Question Two

Don Standard — Fri, 13 Jun 2008 19:10:27 +0000

Two days ago on, 06/11/2008, I did a post called, “7 Questions To Know About Your MLM Compensation Plan”. On 06/12/2008, I answered question one.

Now we are ready to tackle question #2 and it is another big one.

Question Two: How many active people do you need on your team to break even after all expenses just from your recurring income?

I have found the most common break even requirements to be between 20 and 60 active distributors.

Think about all the people you have ever sponsored or even came close to sponsoring. How many of those people have ever built a team of more than 20 people?

The first reason you need to know the answer to this question is because the more active distributors that are needed for someone to reach break even, the fewer people will get there to become successful. The higher the number goes, the higher the turn over rate is.

From question one we learned that the average MLM compensation plan will require 2000 distributors to make you $10,000 per month. If everyone who joins your team is successful, then you need 2000 active distributors to earn $10,000 per month. But what if only one half or successful. You still need 2000 active distributors but you had to have 4000 people join to find those 2000.

But what if only one out of ten stick it out? Now your team needs to sponsor 20,000 people to get 2000 active distributors. And some programs are so difficult to reach break even in that you can figure that only one out of every one hundred will stick it out so you will need 200,000 people sponsored to get 2000 active ones.

What if you think your company has the best compensation plan in the world and one day after you have spent years building it, you discover how many people you really need. Best to find out now.

Hopefully you already know that network marketing is not a numbers game, it is about building relationships and teaching and mentoring. If you choose a business where almost no one can break even then you have turned it into a numbers game.

I build my business 95% with the internet and the telephone. If you are doing the same then you should also know that people on the internet are exposed to many businesses. If your business even seems hard to break even in after a couple of months, then they will move on to another business that promises them more.

To avoid this, you choose a company that gives everyone the best chance for success and can get them to break even quickly with the compensation plan.

You build relationships. If you have no relationship, it is much easier for someone to quit the business you sponsored them into.

You use a system like, Mentoring For Free, to train your people in everything they need to know to have success in network marketing. It must be a proven duplicable system. One that works for anyone, not the so called systems that are nothing but numbers games.

I have evaluated hundreds of compensation plans and I have found some that require very small numbers of people for a distributor to break even just on the recurring income, and I have found some that require over 400 people to break even.

You guessed it, people in the company that takes 400 people to reach break even believe that their compensation plan is the best in the industry.

I have found the most common break even requirements to be between 20 and 60 active distributors.

Think about all the people you have ever sponsored or even came close to sponsoring. How many of those people have ever built a team of more than 20 people?

So even with the low number, you can see you may have a problem. You want your compensation plan to require the fewest number of active distributors possible for break even to improve your chances and the chances of everyone you sponsor.

Mentoring For Free, training will help you learn to evaluate compensation plans and other information about companies so that you can put yourself in the best possible position for success. Then we will train you and everyone on your team in all the skills you need for success in network marketing.

If you have not been properly evaluating the compensation plans of the companies you tried to build, no wonder this all seems so hard to find success in the industry. If you are building something now, then stop and evaluate it. If you are looking for a new company then take the time to properly evaluate everything about the company that affects your success. We call it the 5 Pillars.

Your MLM Compensation Plan – Question One

Don Standard — Fri, 13 Jun 2008 03:14:17 +0000

Yesterday, June, 11th, I did a post on the 7 Questions To Know About Your MLM Compensation Plan.

Question #1 was:

How many active people do you need on your team to earn $10,000 per month in recurring income?

The average number of active team members a distributor needs in the industry seems to be around 2,000.

Can you imagine, you don’t know how many people you need, then one day you find out that you are in that company that needs 40,000 active distributors.

Keep in mind we are talking recurring income. No one cares about the fast start bonus. First most people don’t sponsor many people so it’s a tiny number. Secondly it’s linear income. You have to be working to earn it. The reason most of us do this is to build a business that pays us whether we work or not, recurring income.

Rarely do I ever talk to anyone who knows the answer to this question.

When someone does have an accurate answer it is usually because they have a simple plan where they know that they make say $1 per person so the math is easy. In the answer to another question I will show you why they are actually wrong too.

Sometimes people take a guess and usually miss it a mile. Like 30 people to make 10K. These same people usually have a hard time understanding that for that number to work they would have to make an average of $333.33 from each person. How much volume do you think that might take to make that much? Don’t forget the company wants to earn an income and other distributors creating that same volume want to be paid.

The average number of active team members a distributor needs in the industry seems to be around 2,000. That would mean that you average $5 per person per month.

Now I realize that a lot of you can’t figure out how many people you need to earn $10,000 per month in your company. But you need to understand, that if you don’t know this number then there is no way to put together an accurate business plan.

So look for help. Join Mentoring For Free, and ask us to help you figure out your number.

I have analyzed hundreds of MLM compensation plans and found major well known MLM companies that range from fewer than 400 active distributors to as many as 40,000 active distributors to earn $10,000 per month.

Think about this. Let’s say your good friend, call him Bob, is in a company where he needs 400 people and you are in a company that has an average MLM compensation plan so you need 2000 active distributors.

If everything is equal, your skills, ability, drive, time, products, pricing and more, then when you each have 400 active distributors, Bob is making $10,000 per month and you are making about $2,000 per month.

Later, when you each have 2000 active distributors, you are finally making $10,000 per month but your friend Bob is making about $50,000 per month.

See a difference. It’s kind of like two people with the same job, but one gets paid $20 per hour and the other is making $100 per hour for the same work.

The people I have talked to in the company that requires 40,000 people to create a $10,000 per month income tell me that they have the best pay plan in the industry. Of course not one of them has ever been able to tell me how many people they need. They have no idea that the number is 40,000.

Can you imagine, you don’t know how many people you need, then one day you find out that you are in that company that needs 40,000 active distributors.

I guess it’s not as bad as finding out you need 2000 and your friend Bob only needs 400.

So don’t you think that it is important for you to know now instead of later? I hope so. Go get the number and if you need some help, join Mentoring For Free. You get tons of free training to go with it and you are going to need that too.

Keep a look out for my answer to Question #2. I see people get burned by not knowing this one all the time.

7 Questions To Know About Your MLM Compensation Plan

Don Standard — Thu, 12 Jun 2008 04:35:36 +0000

No longer am I amazed by peoples lack of understanding of their chosen MLM company’s compensation plan.

What should you know about how your MLM compensation plan works? How many of these questions can you answer?

How many active people do you need on your team to earn $10,000 per month in recurring income?
How many active people do you need on your team to break even after all expenses just from your recurring income?
Which team members do you get paid on, your “pay line”?
What are the requirements to get paid?
What are the requirements to get paid on all of your potential pay line?
How much do you really get paid on retail sales?
How does that infinity bonus work?

If you don’t have the answers to these questions, and I mean you really know for sure that you know the answers then you need to stop and figure it out now. It’s that important.

Don’t wait until you finally make $10,000 per month in recurring income to see that you needed 3500 active team members to make that income. Number one it means that since you didn’t know the answer in advance, you couldn’t put together an accurate business plan. And wouldn’t you hate to learn later that your friend that you decided not to join in his network marketing company only needed 350 active team members to make the same income.

So hopefully you understand the importance of knowing this information. I think it is so important that I am going to do several posts to explain the reason you need to know this information and why the answers that you think could be right may be way off.

Sign up for our RSS Feed so you will be sure to catch the answers to each of these important questions.

Linear Income vs Recurring Income

Penny Dude — Wed, 11 Jun 2008 19:57:04 +0000

Most people do not understand the difference between Linear Income and Recurring Income. I like to use recurring or passive income. Some people call it residual.

LINEAR INCOME

If you are like most people, you have to work for a living. If you don’t work you don’t get paid.

I will give you a couple of examples. First one is the bus driver, he drives his bus and when he is done driving his bus at the end of the day he gets paid for the time he drove the bus. If he does not drive the bus he does not get paid.

Another example, a brain surgeon. The brain surgeon goes to work and preforms his surgeries and when he is done for the day he gets paid for the surgeries. But if the surgeon is unable to work, do you think he gets paid? No.

So you would agree that both the bus driver and the surgeon are in the same boat. The size of the income is not the same but they are in the same situation. They work, they get paid. They don’t work, they don’t get paid.

RECURRING INCOME

The best way to discribe recurring income is that when you do something right the first time, you get paid over and over and over again for what you did.

I will give you a few examples of this.

Most people have heard of Elvis Presley. Elvis recorded many amazing songs that turned into hits and he has made many movies. Elvis has been deceased for many years but we still hear his songs on the radio today. His daughter, Lisa Marie is getting a recurring income for the work her father did all those years ago. He did it right once and gets paid over and over and over again.

Another example is Michael Jordon, a famous athlete. Michael played basketball and was asked to be a spokes person for Nike. Michael became famous, signed a contract with Nike, shoots some commercials, gets his picture taken and receives a check. So Michael was asked to do this from Nike to represent them and he keeps receiving a check over and over and over again for being such a great basketball player. He never has to play in another game. He did it right already and will always be famous. Nike and other companies will keep offering him money to use the fame he created just one time. He can be on the beach or sleeping and the recurring income still comes in.

An other way to have recurring income would be if you had few million dollars laying around in your bank account and you get your dividend check every month. You did something right one time to earn that money and now that money pays you dividends each month forever.

Recurring income sounds nice but unfortunately we can not all sing like Elvis or jump like Michael and we sure don’t have a couple million dollars laying around in a bank account.

Recurring income is what most people building a MLM company or network marketing company are trying to achieve. You do the job once and have this check coming in month after month, depending on your company’s compensation plan.

So hopefully that sheds a little bit of light on the differences between Linear and Recurring Income.

I am currently experiencing the recurring income and I can tell you I love going to my mail box every week to get that cheque. Feels great and it keeps growing. I use a proven duplicable system, Mentoring For Free, and it is so much easier to create that recurring income this way.

Many people expect that all MLM companies will get them the recurring income if they have success building their program. You need to actually take a close look at this. Some will get you the recurring income alright, but they will not allow you to retire and keep the income. It’s in their policies and procedures, your contract.

Other companies have pay plans that never create recurring income. They talk about it and show you nice examples of how it happens but in reality, there is never any recurring income produced. The easiest way to spot this is to look at where the income comes from. If it is coming from sponsoring then as soon as the sponsoring drops off, the income is gone. That is essentially a one time sale. You only get paid for sponsoring someone one time. If the company product or service is sold one time, you have the same problem. In either case you have to keep sponsoring and keep selling. They make it appear to work by showing you how you make money from other peoples sponsoring and sales but it only works on paper.

Be sure you understand policies and procedures, and the company compensation plan before you build your house of cards like so many before you have done. Get the free training at Mentoring For Free.

Now you find yourself building your MLM business. You checked out everything and you know that if you build it, the recurring income will be there and you can retire if you like. But most people have been participating in the linear income model for so long that it presents a problem for them. They work hard at their business and make very little in the beginning. Often times they will give up just when they are getting close to seeing success, just because the old linear income model got in the way. Now they either drop MLM because they can’t build their recurring income quickly enough or they move to another company and start all over again.

When you fully understand the difference between linear income and recurring income, and learn to evaluate a company so that you know if you build it then the recurring income is really going to be there, then you will be on your way towards sticking with one company long enough to reach your goals. The day will come when you feel overpaid for what little work you do building your business.