Yes, there are probably more compensation plan models apart from MLM and direct sales. But, far and away, they are the most popular. The compensation plans for the direct sales businesses are similar, but do vary from company to company. I am also including gifting programs in this model.
My experience in the Direct Sales model is that the top tier opportunities use this one. Most of the products are higher investments, but also the amount of money that can be generated greatly surpasses the MLM model. While similar income can be generated in the MLM model, it is the exception rather than rule, simply because it takes a lot longer and considerably more tenacity. Most people who join an MLM organization, leave it within 90 days of joining.
The general model for direct sales uses a referral type compensation plan. In order to get to profit in the business, the new associate passes up their first one or two sales to the sponsor who introduced them to the business. Beyond that, the associates profits from all the new people they sponsor and their pass ups. So, some would criticize the "pass up" model, feeling that it is unfair. Actually, it is because of the referral model that so many people generate a great deal of money in direct sales. The sales that must be passed up can actually be viewed as training sales. The sponsor is spending a great deal of time and energy to help the new person launch their business successfully.
Several of the companies I have experience with also have other income generation opportunities apart from the basic plan. These create residual income, so that your earnings continue from the people you bring into the business.
While the name of this model is Direct Sales, there actually is no sales involved. Many people will back away from this, saying something like "I can't sell". The key to these businesses is marketing which is different. Clearly define and understand what you have to offer and others will want what you have. In fact, selling will absolutely turn your prospects off.
I personally love the direct sales model and the future that it holds for my family and I. My life is built upon the notion that I want to be free to pursue my spiritual path in this life with all the passion that I have without spending large amounts of time with a job, making far less money than I can with a direct sales business. I am free to do whatever I want, whenever I want, with whoever I want!
Thursday, April 30, 2009
Monday, April 27, 2009
MultiLevel Marketing Explained
The world of MultiLevel Marketing, or MLM as it is commonly known, has been in existence since 1959 when Amway invented this business model. Many people jumped on the bandwagon because of not only the newness and the novelty of the program but also the compensation plan that was offered. Over the years, there have been many success stories with this company and many others who have come along in the past 40 years since.
The basic principle of the MLM is to market a relatively inexpensive product, typically in the supplement and/or cosmetic area. People who sign up with an MLM company can expect three things: a reasonably good product that in some way is unique in the industry, at least to the MLM company marketing the product; the second thing they can expect is to be required to participate in some type of autoship program of the products each month, in order to remain commissionable, given that the rep actually sells any product to receive commission; the third thing someone can expect is to be advised to seek out family and friends to whom they can present the business and hopefully enlist them.
While the products are the main reason for the business on the surface , the money is actually made in recruiting others who are hopeful to change their lives. Certainly, new recruits are given training on the products, their usability and other key topics in order to be successful in achieving their dreams of self employment.
The main objective to be successful is to recruit people into your downline, which typically has 2 legs. You cannot build 1 leg to the exclusion of the other. Both must be growing constantly to make the kind of income people say they want to generate. As new recruits come on board, they require considerable support to get trained themselves to do the same thing as their upline did for them.
The idea is that as your downline grows and more people are added not only by you, but by the people you bring in, a part of the money pie is passed up to all those whom you have recruited. This generally does not go on ad infinitum, but only down to a level, i.e., 5 deep.
There are many people who have been very successful in this business model and are to be commended. It takes a person of a certain metal to be an entrepreneur in the first place, but sticking to the MLM model and being successful takes a person of amazing vision and determination.
The basic principle of the MLM is to market a relatively inexpensive product, typically in the supplement and/or cosmetic area. People who sign up with an MLM company can expect three things: a reasonably good product that in some way is unique in the industry, at least to the MLM company marketing the product; the second thing they can expect is to be required to participate in some type of autoship program of the products each month, in order to remain commissionable, given that the rep actually sells any product to receive commission; the third thing someone can expect is to be advised to seek out family and friends to whom they can present the business and hopefully enlist them.
While the products are the main reason for the business on the surface , the money is actually made in recruiting others who are hopeful to change their lives. Certainly, new recruits are given training on the products, their usability and other key topics in order to be successful in achieving their dreams of self employment.
The main objective to be successful is to recruit people into your downline, which typically has 2 legs. You cannot build 1 leg to the exclusion of the other. Both must be growing constantly to make the kind of income people say they want to generate. As new recruits come on board, they require considerable support to get trained themselves to do the same thing as their upline did for them.
The idea is that as your downline grows and more people are added not only by you, but by the people you bring in, a part of the money pie is passed up to all those whom you have recruited. This generally does not go on ad infinitum, but only down to a level, i.e., 5 deep.
There are many people who have been very successful in this business model and are to be commended. It takes a person of a certain metal to be an entrepreneur in the first place, but sticking to the MLM model and being successful takes a person of amazing vision and determination.
What is Network Marketing?
Of the people I have come in contact with over the years of learning this profession and, yes, I do think it is a profession, the idea of what network marketing is, seems to fall very neatly into 3 categories:
To begin with, network marketing is an absolutely viable business model in the world of business. It is a profession primarily because it takes considerable study, self appraisal and an attitude of certainty to be successful. Within networking marketing, there are two distinct types of marketing models.
The first is the MultiLevel Marketing model or as many refer to it as "MLM". MLM was first introduced as a business model by Amway many years ago and over the years has gained tremendous footing as a way to get products in to the hands of consumers while providing income to those doing the marketing. As first, there was a requirement for the reps to inventory product, but this concept has been replaced for the most part by the manufacturers themselves, who ship products ordered through their reps. The term MLM comes from the way that marketers are placed on their recruiter's down line, all those below them. Each person down to a certain level, receives income from all those whose efforts produce sales below them, down to a certain point, therefore, multi level marketing. In general, the start up investment on those programs is around $100 to get your starter kit.
The second model is the Direct Sales model. This type of plan is generally found in your "top tier" opportunities, those which are a higher investment to start, but also offer much higher income levels in a shorter amount of time. These programs typically have what are called training sales, which are the first one or two sales the rep makes which pass to the sponsor and then afterward to the rep themselves.
Next time, we will explore more deeply, the world of Multi Level Marketing..
- Those who know what "it" is from their personal experience, usually from the Multi Level Marketing perspective, which we will explore later.
- Those who are convinced that all the opportunities available through this business model are "scams" and "don't work".
- Those who are or have been in the corporate environment exclusively and feel that anyone who does network marketing for a profession is either sub par or "couldn't make it anywhere else"
To begin with, network marketing is an absolutely viable business model in the world of business. It is a profession primarily because it takes considerable study, self appraisal and an attitude of certainty to be successful. Within networking marketing, there are two distinct types of marketing models.
The first is the MultiLevel Marketing model or as many refer to it as "MLM". MLM was first introduced as a business model by Amway many years ago and over the years has gained tremendous footing as a way to get products in to the hands of consumers while providing income to those doing the marketing. As first, there was a requirement for the reps to inventory product, but this concept has been replaced for the most part by the manufacturers themselves, who ship products ordered through their reps. The term MLM comes from the way that marketers are placed on their recruiter's down line, all those below them. Each person down to a certain level, receives income from all those whose efforts produce sales below them, down to a certain point, therefore, multi level marketing. In general, the start up investment on those programs is around $100 to get your starter kit.
The second model is the Direct Sales model. This type of plan is generally found in your "top tier" opportunities, those which are a higher investment to start, but also offer much higher income levels in a shorter amount of time. These programs typically have what are called training sales, which are the first one or two sales the rep makes which pass to the sponsor and then afterward to the rep themselves.
Next time, we will explore more deeply, the world of Multi Level Marketing..
Welcome to The Spiritual Networker
Beginning this blog is truly cause for celebration! For the past four years or so, I have been on a journey to figure out how I could generate income for myself and my family in a spiritual way. I had been involved in a corporate career all of my professional life as a project manager and still am involved in that, but on a lesser scale.
What I have discovered is that there are considerable misconceptions about the profession of network marketing as to its usefullness, its legitimacy and its place in our world as far as being "for real".
The idea for this blog came out of the notion that I have been and continue to be successful in my new profession because I have made it my own, through my desire to generate income as a spiritual professional.
I will gladly share my thoughts and yes, opinions as they ARE mine, in the hope that those of you attracted to my blog will find perhaps an answer to a question you now have about your future. With so many people being released from Corporate America at this time, thousands are in a search for their next step. Perhaps, my experiences will give you some insight into what that next step might be.
What I have discovered is that there are considerable misconceptions about the profession of network marketing as to its usefullness, its legitimacy and its place in our world as far as being "for real".
The idea for this blog came out of the notion that I have been and continue to be successful in my new profession because I have made it my own, through my desire to generate income as a spiritual professional.
I will gladly share my thoughts and yes, opinions as they ARE mine, in the hope that those of you attracted to my blog will find perhaps an answer to a question you now have about your future. With so many people being released from Corporate America at this time, thousands are in a search for their next step. Perhaps, my experiences will give you some insight into what that next step might be.
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