Is there a residual in telecommunications network marketing?

Is there a residual in telecommunications?
By Nate "The MLM Rockstar" Calima

I still get this question now and then, especially as an argument by those that are not in the telecommunications industry, sometimes it's a blatant lie in order to recruit someone from another company or it's simply a misunderstanding of the industry. About two years ago or so I wrote an article about this and it became very popular. Again, I write a revised version that will shed light on telecommmunications network marketing.

BACKGROUND

Years upon years ago, even before I was of legal age, I joined network marketing in my first company, Excel Telecommunications. The money was amazing, there were individuals driving Ferrari's and Porsches in their 20's. That company became bankrupt NOT because of the structure. It was because of shoddy corporate leadership that changed hands many times and the unethical practices of many distributors that bled the company to death. Bonus money was HUGE! Residual was lacking because the long distance industry didn't pay much. That is probobly where this current myth stems from. A friend of mine (who was a top 150 income
earner in Excel) had at most, a $400 customer residual income. That is with over 3,000+ representatives!

But here is where the lie is perpetuated, many in product companies would cry havoc and unleash the recruiting dogs of war. Of course, the dynamics between the two industries within network marketing is quite different, but if we simply based income on the long distance residual aspect, we would be missing a very large detail. If the residual income is so shoddy, then why were there so many making large incomes. What is missing in this part of the equation.

Simply put, the upfront bonuses are there in order to make up for the lack of "residual income" in the plan. The theory was, put upfront bonuses there while the residual income builds up. For example,in Excel as an Executive Senior Director, when you sponsored somebody at 399, you'd get a whopping upfront bonus of $425. Factor the same price issue into a product company. (As a side note, i'm simply talking income wise, not factoring in that there is product involed) So basically, that $425 makes up for the year long residual income, all upfront! The statement "there is no residual income" is ridiculous.

Besides, with all that bonus money, why is that bonus money not considered a residual? When your distributors recruited others and they got 2 customer points, you were paid. There were those who built a large organization who were making huge incomes from the bonus income. Isn't that residual as well?

A common argument, residual income from customers is shoddy. Back in the old days, perhaps that was true...

But not anymore!

TODAY

With the advent of new technologies and alliances, there is certainly a residual income created in telecommunications. Lightyear Wireless has a relitively high payout on their $49 websystem with up to a $24 monthly payout including overrides. As a Vice President, a person could be making $11 when a person pays their wireless store dues. On a $49 monthly fee,
that is an amazing payout considering most nutritionals (including shipping) is around $120-$140 for a $5-$8 payout! (again, I am talking INCOME wise). That is the only one aspect, we are not including the bonus income, income from customers or the 1%-4% paid on cellular customers. Lightyear is the only company to pay on the actual wireless bills. For a 1%-4% payout on a $60 (conservative) bill, you are making $0.60 to $2.40 per phone, and it is realistic to have
multiple phones per representative. So that means, you could have the websystem + cellular residual + any other extra customers + upfront bonuses. As far as I'm concerened there is an actual residual.

Not all companies have gone this route, ACN has chosen to go the video phone route and raise the residual payout on the lower levels with the older theoretical payout that most of your representatives would be on your lower levels. Although slow to change, this is a great change to an older "Excel Style" residual payout in where it was 1/4% residual until a representative reaches certain levels in their organization. 5Linx has chosen to have a "coded" payout
in where a person could reach up to $3-$4 on their VOIP or Digital home phone, they also have a websystem with a lesser payout.

So enough with the "there is no residual" in telecommunications, of COURSE there is, if you think there isn't then you're either A: Ignorant or B: In a nutritional and you are recruiting people on this aspect. Don't be mad, you know it's true! The key is here, look around, are there people making money in your company? Is there success? If there is, then some kind of income is being generated and no longer should the myth of "no residual" in telecommunications be perpetuated!

Nate "The MLM Rockstar" Calima

This article may be duplicated but it may only be duplicated with the FULL article with the AUTHORS name given credit.

Nate Calima is a Vice President and National Training Director with Lightyear Wireless. You may reach him at http://www.NateCalima.com