Get Paid!

Hopefully you have carefully considered whether or not starting or operating an online business is right for you. Since you are reading this post, I am going to assume in the affirmative. The next step will be to decide what it is you want to do. As you saw in my last video, there are many industries to choose from. If you have written down what your interests are, next you should do research.

Everyone has their own way of doing research into what network marketing or direct sales company they want to join. I want to take you along on the research journey I undertook in order to see what the differences are between online businesses.  First, since you want to make good money online, let’s begin with various compensation plans, or how you get paid!

Compensation Plans

Compensation plans can be simple, but most are very complex and difficult to understand, and explain to others.  It helps if you first understand what a network marketing company or direct sales company costs are that will come into play.

Critical Costs the Company Has to Deal With:

• Product Development and Research
• Company Operations and Profitability
• Distributor Commissions

What you typically find is that if a network marketing or MLM company is generous with its commissions, we’ll use 40-45% of its total gross revenue for example, that will leave less money for the quality product they want to distribute. It also leaves less money for investing in new product development and maintaining capital needs for viability.  Similarly, if the company spends too much to produce its products, it won’t have enough left to incentivize its marketing and sales organization and run the company in the black.

Historically, strong enduring companies carefully balance themselves and position themselves for the long haul. Some may appear to do well short-term, but lose steam and disappear. If you are seriously considering a network marketing company, carefully examine how they deal with the critical costs listed above. How can you tell how they are doing? Here are some things to look for:

1)      The adage, “If it looks too good to be true, it probably is,” applies here. You may find businesses that claim to pay out more than any other network marketing or direct sales company.  If they spend too much in compensating distributors and don’t put enough into maintaining their company’s bottom line and product, will they be there for you next year? Or, are they a “one-hit wonder”, here today and gone tomorrow? Research the company’s track record.

2)      Does the company put on a big show, spend a great deal on hype? Are they really who they say they are or is it all gloss and glitz? Again, if they spend too much in this area, what can they really offer you?

3)      Who’s behind the company? Do your research on the backgrounds of those that are operating it and do they have experience with network marketing or direct sales? Do they know how to run a company or were they just profitable distributors in some other business? Did they jump from business to business over the years? One time I heard someone brag about the leaders and owners of their business opportunity saying, “They’ve been involved in starting up hundreds of companies successfully!” I personally don’t want people that just know how to set up a successful business then sell it or move on. I want leaders that get it going, maintain it, and grow it long-term… for years to come! I want long-term income and stability.

4)      In your research, it’s important to ask lots of questions, ask for real referrals if possible (beware of those that pretend to be unbiased and unassociated with the company you are researching, called “shills”), and use your intuition and gut instincts. Talk things over with people you know to be level-headed and trustworthy. Hopefully, they are objective as well, looking out for your best interest.

5)      Next, check out the products. Does the compensation plan fit the products you will be promoting? Are they too overpriced just so you can make a commission? Will they be hard to promote? Do they solve your potential customer’s problems in some way? Do the products fit with your lifestyle, your goals, what you’re passionate about? Are they products that can be picked up at outlet stores, the mall, or the nearest drugstore?

Some plans are front-end loaded, others are back-end loaded.  There are actually companies that say they offer up to 100% commission. I think that’s ludicrous. If I see any with a payout more than 60%, I’m very skeptical.  If a company offers something more than that, please look closely:

• Are the products grossly overpriced?  Unless the product is very unique or an exclusive or patented product, something’s wrong.
• In order to create monthly income, many companies will expect you to have some type of monthly quota, auto-ship, sales, etc. that you must maintain to stay “active.”
• Several programs have “breakage or break-away” features.  If you were to miss your quota for the month, you can have your entire organization disappear. You may have spent weeks or months building it, and it’s gone baby gone!

Most compensation plans fall into binary, breakaway, matrix, stair-step or uni-level plan but there are other plans out there as well.

Network Marketing Binary Plan:

Your first level is limited to two with infinite depth.  It is presented as a plan where you bring in two people who then each get two and so on into infinity.  Most companies that use this plan will then pay you on the “weaker” leg.  If your company of choice pays this way, you will have to watch very closely.

Network Marketing Breakaway Plan:

This plan usually has an unlimited first level width.  The depth can be 10 or perhaps more levels deep.  This is probably the oldest type of compensation plan.  Once your organization creates some leaders, the company decides when they are ready to “breakaway” into their own organization. Typically, you are still paid to a certain extent on these new organizations.  Don’t let presenters of these plans mislead you with graphs, charts, and numbers as these can be manipulated to present a much bigger picture than reality.

Network Marketing Matrix Plan:

This particular plan generally has a first level of 2 to maybe 7 and anywhere from 5 to 50 levels deep.  Most fall between 5 and 12 levels deep with linear commissions. Matrix plans often use the phrase, “Get two, who then get two…”  That makes it sound easy, doesn’t it? If you are new to network marketing, what if you bring in two and neither one does anything at all?  Matrix plans only make up a small percentage of the total pay plans offered by different companies.  This compensation plan has been on the decline as “reverse” matrix plans were tied to scams and Binary and Uni-level Plans became more popular.

Network Marketing Uni-level Plan:

This plan has an unlimited first level width and typically a depth of 5 to 10 levels. Many plans will expect you to create a huge “downline” in order to create a substantial income. I have a free special report for you to assist in your research. Be careful that the business isn’t so focused on paying you for “recruiting” versus actual sales or commission activity! The key is to acquire real paying customers that purchase each month.

Example: Let’s say I am paid $100 per each customer I acquire and I get ten customers. I have now generated $1,000.00.  If they stay on a monthly order system, I can generate residual income from each customer’s order.  Depending on the company I have chosen, the typical pay structure will be from 5% to maybe 35% of each customer’s recurring order total. This should give you an incentive to get out there, take action, find new customers, do a great follow up with any new potential customers, and give them great customer service to keep them coming back for more! Therefore, to some extent, you can control your own destiny and results.  All you have to do is concentrate and focus on your own efforts and marketing system to bring in new customers, retain them, and anything your downline does is like the cherry on top of the sundae!

If you want a great resource to turn to, I did find an MLM Consultant and expert that is offering a comprehensive book (this is not an affiliate link).  Check out Debbi A. Ballard’s, “Sixty Things You Should Know About MLM Compensation Plans” here:

http://www.mlmcompensationplans.com

In the end, the research and decision to join or start an online business begins and ends with YOU! Research carefully, trust your instincts, and make sure the business falls in line with your lifestyle and goals. Let me know if this information has been helpful to you!

To your prosperity and online success,

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