Small MLM checks - The sad truth of network marketing
A few days ago, I had a conversation with a lady who reached a very significant pin level in one of the largest and oldest MLM companies. She is no longer with this company, but her story is one that's not too uncommon within the MLM industry and should serve as a lesson to all of those who really want to live the MLM "Dream".
From the outside she and her husband had what you could call "success". They were always on stage, speaking and telling inspirational stories at company events. Every week they trained their downline on how to promote the business and its products.
What was missing?... The Money!
Over their years with this company, they had tirelessly built a downline organisation numbering in the thousands. They should have been on an executive level earnings, but their monthly bonus check was less than two thousand dollars!
So what went wrong? Did their company rip them off? Well, sort of...
The problem was their business was plagued by downline attrition. New distributors would come and go very quickly. Their downline simply could not generate the volume that was required to achieve the level of income they were promised. They and their leading distributors did their best, but they could not motivate the people in their downline to build the business.
Downline attrition is a growing problem in the network marketing industry as the internet continues to distract people with endless get-rich-quick money making opportunities. Now, it's more important than ever before to get the right people people into your business. (And business opportunity seekers are the worst types of people you can have.)
They worked very hard to build that business, doing endless belly-to-belly prospecting that quite frankly, most networkers do not want to do.
So did they sponsor the wrong people? Perhaps...
But on closer inspection of the company's business model and its compensation plan, their lacklustre results were for the most part, inevitable. This company ran a compensation plan that only benefited the very few distributors who got to the top. The people in the field, who would work hard in their spare time to build their dream, who sustained the business, were rewarded virtually nothing for their efforts.
The large distributor "training system" that they were apart of did not encourage retailing but rather endless recruiting, which of course, benefits the distributors at the top. The massive attrition was no surprise. Nobody wants to work hard for nothing.
The moral of this story is you can't succeed unless you understand the business model of your MLM company. First and foremost, good business partners are essential. You can not afford to have business opportunity seekers who hop from company to company. But you must have a compensation plan that rewards people in the field for their efforts.
Network marketing is a hard game. There's nothing more de-motivating than spending time and money showing the plan every day, sponsoring just a few and not see any tangible result for it.
Does your company have a fair and rewarding MLM compensation plan for everybody involved or does it only reward those few at the top?
To your MLM Success,
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