MLM Profits: Who makes the Lions Share?
We probably have all done it. When we were searching for "next big thing" in opportunities, we wanted to choose a great company to be associated with.
So what impressed you the most? Were you wooed by new the new 75 million dollar office building with the most state of the art equipment and the 400 salaried employees on staff.
Your impression was that "now this company must be doing something right!"
The majority of us probably did not think, HMMM I wonder how they are paying for all of this. Wow, I wonder what the monthly interest payment is on a $75 Million building?
What about such things as maintenance, washing all those beautiful glass windows. Painting the parking lot, or the beautiful landscaping.
400 salaried employees? I wonder who pays for the workmans comp, or benefits for all the employees.
And 400 people, I wonder if they have to hire managers and assistant managers, to keep all the employees in line?
Or, maybe it was the private Island, or the private company jet that said to you "wow, this must be a successful company!"
Perhaps it was the paid celebrity product endorsements that impressed you enough to say, "this company is my vehicle of choice to financial freedom!"
Ok. Fair enough. It all looks wonderful. I looks as if the company has done well. But, herein lies the rub.
WHO GETS TO PAY FOR ALL THIS!!!!!
Brace yourself, how about Y-O-U!! Thats right YOU DO! "How is that?" you ask...
Well, how does the company make money? Its made by moving a product, right? It takes the revenue made on the product "moved through an army of distributors" subtract any expenses, leaves profit.
Would you say that the lions share of the profits are going to the field of distributors, or maybe towards that HUMONGOUS overhead.
Could that be why company Y must sell its widgets for $140.00 when company X sells the same widget for $40.
So given this common scenario, does the company really have the distributors best interest in mind when it carries excess "fat." The more "fat" a company has, the less it can put into the distributor comp plan.
Great! So how do I know if my company is overloaded with pork? My first response that question is how well do they pay the part timer?Another suggestion is to start by crunching the numbers. How much money do you need to make a month to gain your freedom?
Take that number and find out how many active downline it will take to produce that income number. Is your comp plan structured in such a manner to make attaining this number of distributors a realistic possibility? Assuming you retain a significant number of distributors, and don't lose them through attrition.Well, thats great, so how do I learn to analyize a company to know if it is something I want to ba a part of?
First, you can Google the company or the founder on the company in "quotation" marks. If there are any negatives on the company or Management, you will generally find it.
The next suggestion is see if it passes the 5 Pillar test. If it does, you can be assured that you have a winner!
So next time, you are looking for an opportunity, or if you are questioning your current one, take the time to see how "streamlined" they are. You just might be suprised where your bonus money goes.