All of us Network Marketers have the dream of becoming rich and powerful in some ways. The idea of not worrying about money and being able to do what we want when we want is what drives us. Every day you are bombarded with business opportunities and it is almost impossible to figure out which one is better than the other. My goal today is to help you figure this out in just few steps. There are 3 keys to your network marketing business that will decide whether or not you have a chance to be successful and today will focus on the compensation plan alone. In my opinion, probably the most important part of your business. Without the greater rewards financially, you will not make any real money. So how does a compensation plan in network marketing make or break or your business?
As my business partner says so well. “You must be compensated for your own direct sales efforts early on or you’ll never be around later on to even see what residual income looks like.”Usually, people don’t ever even give it a second thought. The reality is that the promise of “Residual Income” is all but dead for today’s Network Marketers. This may anger you. It was a hard pill to swallow for me as well. But if I didn’t, I would not be here telling you about these embarrassing lies that people are telling.
The next part is critical here so pay attention. If your compensation plan does not have a “Direct Sales Component” and a “Residual Income Component” it is like going to a battle at war without a gun. It is what we call a “Dual Income” compensation Structure. Very simple, you get your money two ways. You get paid immediately for your work whether or not you decide to build a downline or not… And you get paid over time through residual income.
Stop and think about it for just a moment because this truly the most innovative, never revealed, undisclosed secret to making real money in Network Marketing in the New Economy, by far second to none. So in other words, you get paid first and you leverage your income later. Not bad!
The best entrepreneurs today always get paid first and leverage their income later and focus on the residual income after. It is called “Immediate Leverage Income” Hint, remember this term. Now remember, you have to have both, short and long term income. It is not a choice.
Still there… Great because we are moving on here…
The quote on quote Traditional Network Marketing will have you believe that residual income is the Holy Grail… Absolutely false and shame on you if you believe it. It is a figment of the imagination. I know you are probably having a problem swallowing this pill. Remember, I know the feeling because I was in your shoes but it is simple economics, simple as that.
Here’s the issue… Less than 1% of Network Marketing compensation plan have the Dual Income element. Unfortunately, you read it right. Less than 1%.
The ones that did realize the critical importance of the Dual Income element and included it in their compensation plan are now the companies with reps. that experience the least amount of attrition (turnover) and its reps or not going from one opportunity to the next because they make money from day one.
Because they make money up front, the network marketer who uses a Dual Income compensation plan is not attached to building a team or a downline. They don’t have to worry about Joe Smith in North Dakota who spent his last few hundred dollars to get started. I’ll expand on this in a little but…
An entrepreneur can not make it on residual income alone. It is worth saying again… An entrepreneur can not make it on residual income alone. You will never hear this from them either.
Why? What would you do if they did? I would too… Almost every Network Marketing Plan is residual based only. A few do claim to have a commission up front but the numbers are ridiculous. A few hundred dollars may be, if you are lucky. Let’s be serious here. We have done the research.
If you are reading this, I supposed you ultimate goal is to make a full time income and maybe even leave your job, right? I don’t have to tell you that a few hundred dollars won’t replace your current income. Especially with the cost of everything rising like we have never seen before.
Here’s something else even more significant to think about… What about if you work your butt off for a year or so and you are by some miracle able to build a downline in an old school Network Marketing business that pays you a residual income of about $3,000 a month for the next 3 years. Over a period of 3 years that is $108,000. How big do you think your organization would have to be in order to make a $3,000 a month residual income in a traditional Network Marketing business model? 400 reps, 800, 1600?
I used the word miracle earlier because building a downline like I am talking about to create a $3,000 a month residual income virtually never happens anymore. The reasons are very simple. You will experience huge attrition like you would not believe and your check will be decrease drastically (You will not hear that from them either). But just for the sake of this example, we will keep that number, OK?
$3,000 a month for 3 years. Sounds pretty good but is it really the best course of action? Or would it be better to work with a Dual Income Network Marketing business model that pays you the $108,000 in the first 12 months without the need of residual income (which come later)? Kind of a silly question, right?
Here’s why… An economy fact is that money is worth more in your pocket today and it will ever be in 3 years. What you can do now is use that $108,000 and invest it in real long-term residual assets like real estate, gold, silver or even dividend paying stocks.
To be completely honest, I would prefer to have $108,000 in real estate or gold than to draw off $3,000 monthly for 3 years… Even more today than before since my income can disappear in the blink of an eye if somebody in my upline decides to bounce to another company and take as many people as he/she can with them in the process or even worse, the company decides to changes its stinky compensation plan (Which by the way, it happens very often).
If you really want to have the feeling of getting residual income, do this. Go to the bank and deposit that $108,000 into a money market account and make arrangement to have the bank deposit $3,000 in your account every month. At least, you will never be in danger of losing your residual income.
No Vanishing downline or dropping sales to be concern with and at least you make interest on your money for a few years… You get the point. It is quite the reality check when you understand that your income is totally dependent of total strangers, individuals you never met…
You have no idea what is their long term plot. You have no idea if they have family problems, what they will do next but yet, your income is directly affected by what they decide to do and everybody between you and them… Remarkable isn’t…
What is the point of waiting around for that insignificant $10-15 commission check every month when you don’t know how long it may last. Get a year worth of that money in advance and learn to do some good with it outside the Network Marketing world.
In the end, money is worth a lot more in your wallet today than it will ever be next year. So Get Paid first and then invest your money intelligently like successful business owners do every time.
The key here for you to realize is this. The economics of Network Marketing have transformed forever. Network Marketing as it is will never be the same. The longer you refuse to acknowledge it, the longer you will be on the sideline not making money.
If you do not have a Dual Income compensation plan that rewards you first and allows you to stay in the game long enough to secure the benefits of residual income, you will most likely always spend more money then you will make. You will eventually push yourself out of business because you are operating at a loss.
It is not easy to say but the promise of residual income has all but disappeared.
There is the occasional 1 out of 10,000 exception but as an industry, the old school Network Marketing has become a real farce driven greed, build-up and the terror of loss where only the one individual with a lot of money can dependably get a decent amount of residual income.
Ultimately, this is why I wrote this article. It is critical for me to pass along this information to as many people as I can. I need you and everyone to understand the deceitful economics at risk here so you can change the path you are on before it is too late, just like I did and many other entrepreneurs did when you came across did info.