When approached with an opportunity to join a Network Marketing Business, you are often presented with a Compensation Plan.

Usually someone in your prospective sponsor’s upline who has reached a high leadership level will explain it.

There are usually graphs, diagrams, and examples illustrated.

The presentation most likely focuses on what you could potentially earn if you build big.

This often leaves the prospect…you…starry eyed and quivering with the anticipation of making enough money to pay off your debts and house, retire early, and buy your own private paradise island complete with a yacht.

One of the tables that might be overlooked in the presentation is the disclosure of Distributor Statistics.

These statistics may tell you the percentage of distributor retention, average earnings, and rate of advancement. 

Additional Distributor Statistics

51% of our distributors earn between $126.00 and $646.00 annually.

2% of distributors advance from a development level to a leadership level.

47% of distributors advance beyond the basic rank.

The above numbers tell us important realities.

1.  Just over half of the distributors make on average $126 to $646 annually. 

That means per year! 
That works out to an average of $10.50 to $54 per month.
Most would agree those figures are a far cry from the 5 figure per month incomes we are shown during presentations!  

2.  Only 2% of all distributors advance to leadership positions.

That is likely the level one has to achieve in order to make those 5 figure incomes.

3.  Almost half of all distributors advance beyond the basic level.

This could mean any level of advancement.
It at least indicates that almost half of the people putting in an effort to build a business actually do make some progress.

It is important to pay attention to these figures for one reason.

It helps to get your feet planted firmly on the ground!

The people presenting the comp plan and other aspects of the business opportunity are not intentionally misleading you.

But the fact remains that part of your success in a Network Marketing business is in sponsoring new distributors.

To maximize distributor satisfaction and create a feeling that each person is successful and building their business, you need to sponsor people relatively quickly.

Therefore, business presentations are designed to dangle a shinny object in front of a prospect who is hungry for extra money.

Key elements are presented in writing right in front of your face, but not directly explained in the presentation.

Often these items are not seen or read until after signing on the dotted line…if at all.

Make a point of reading everything before you sign!  At least you will be entering your new opportunity with your eyes wide open.

Believe In Your Success, I Do!
Karen
mentor.karen.j.miller@gmail.com

There is always a lot of hype about the big money that can be made in MLM.

Presentations showcase income potentials by creating examples of checks that “could” be earned.  They usually have very high $ amounts that get the prospect starry-eyed.

Some examples take a sampling of a downline’s highest monthly earnings and combine them into one hypothetical month. 

Another example is to show a possible 4 or 5 level downline with 2 or 3 superstar builders.

Then the potential commission that could be earned by You, the potential upline sponsor, is shown.

The problem with these kinds of examples is that they do not accurately represent reality for the average person who joins an MLM.

Very few distributors ever create a lucrative downline with a handful of superstar builders, or distributors who make top commissions every month.

Additionally, no one ever mentions to the new prospect that to make a consistent 5 figure income takes several years of dedicated work.

A more accurate example of earning potential is to answer the 10K question. 

How many people (distributors and retail customers) does a distributor need in his/her downline to make $10,000 a month in residual income?

Residual income does not count one time bonuses or superstar 1% payouts.  
Residual income is only the commissions paid on group volume from product sales.

The 10K question also gets prospects starry-eyed since so few people can actually envision making that kind of monthly recurring income.

The demonstration that needs to be made to answer a more realistic question is to show how to make new distributors financially successful in the first 2 –3 months.

Most new distributors walk away from their MLM business because there is no financial reward.

A pay plan has to be structured so a new person working part time can start making a few hundred dollars a month within the first couple of months.

My fellow mentors, Bob and Anna Bassett        , have called this the Half-K Question.

Their example asks how much money will a distributor make if he/she generates $500 a month in sales.

This could mean having one distributor in the downline and a handful of retail customers.

Find the commission the company pays for volume.  It could be 5%, 10%, or up to 40%. 

Commissions are figured counting volume points, but the percentage is paid on the dollar amount of sales.

If the commission is 5%, then multiply 500 by .05 to get your commission $ amount of $25.

A commission of 10% on $500 is $50.

A commission of 20% on $500 is $100.

This isn’t going to buy anybody a yacht just yet.  But it does give a prospect a realistic idea of how hard he/she has to work to make a hundred bucks.

The first $100 is just the first step to achieving the $10,000 a month income.  The next $100 is the next step and so on.

Know your compensation pay plan so you can figure out the Half-K Question.

Know how you will make your first $100 and know how easy or hard it will be for the people you sponsor into the business to make their first $100.

If you need help figuring it out, just ask!

Believe In Your Success, I Do!
Karen
mentor.karen.j.miller@gmail.com

You might not know this about me…I take care of foster children. So far I have taken care of over 20 children and adopted one.

This past month I took in an ity bity baby boy, then cared for 2 little siblings for 3 weeks. After they left, in came another baby. So now, I have a 10 week old boy and an 8 week old girl.

I have been thrust back into those days of no sleep and having my household ruled by a miniature person who’s demands must be met immediately.

Even with the challenges, it’s fun.

Having these babies and being so busy with their care has also reminded me of why network marketing is such a great industry. You really can tailor the business you build around your lifestyle, needs and time constraints.

A huge factor in being able to customize the time and efforts you put into your MLM business is your compensation plan.

Many comp plans contain sinister clauses hidden in legalese few people can understand. Knowing what your company’s comp plan says, line by line, and how that affects your ability to build your business on YOUR terms.

I am giving you a gift of the link to last Saturday’s training call on Compensation Plans. 

Just send me an email at mentor.karen.j.miller@gmail.com requesting the Bob and Anna Comp Plan training from February 27, 2010.  I’ll send the link right to you.

Bob and Anna Bassett hosted the call and taught how to answer the 10K question. If you can’t answer this about YOUR company’s compensation plan, then you really don’t know how much you need to work to reach your financial goals.

Knowledge IS Power!  Learn what you need to know about your contracts and you’ll become 10 feet tall and bullet proof!

Believe in Your Success, I Do!
Karen

Now is the time. 
Actually, you should have read your contract BEFORE you signed on the dotted line…but heck….none of the rest of us did either.

So pullout your contract and start reading it.

Do you have a non-compete clause in your MLM contract?

A non-compete clause (aka “covenant not to compete”) says you, the distributor, agree not to join another MLM or network marketing company upon leaving or being terminated from the company you are under contract with.

Length of time for such a clause often goes from 6 to 12 months.

Why does a company use a non-compete clause?

It is usually so the company can protect trade secrets and client lists.

Incidentally, non-compete clauses usually are used in employment contracts.

However, the attraction of network marketing is owning your own business.  At least that’s what everybody tells you when they are trying to get you to join.

What if you join the company and find out it is not what you were promised?
Or what if you are terminated or your distributorship is not renewed?

A non-compete clause can keep you from doing business for a substantial period of time.

Don’t think the company would enforce the contract their lawyers wrote and required you to sign before joining their opportunity?

Think again.

Wishing You the Success of a Lifetime!
Karen
k.j.miller.777@gmail.com