I got a call yesterday, right before I was walking out the door and ended up on the call for an hour. The caller is a top rep for another home party company and was looking at Scent-Sations and Scentsy.
She said she had some questions...the first being what the difference is between our compensation plan and Scentsy.
My answer: "They are both great plans for those who are willing to work hard and do all the right things"....I explained that when it's all said and done....no matter which company you are in, if you are looking to make a living in MLM you need to build a team and live off of your residuals, then your compensation will be approximately 5% of your group volume.
In other words, if you look at the "back end" of any program where you are getting paid on commissions from the wholesale purchases of your downline you will find that, generally speaking ....you are going to earn 5% of the total volume.
The "difference" is in the WORKLOAD needed to get that check...and this is where there can be huge differences.
In the Scentsy example, I explained that they require you to do a minimum of $500 retail (which translates to approx $350 in wholesale) each month in order to get a commission check. If you have a $4 commission check coming to you then you need to have done $500 in retail that month to get it.
I told her that I only ever dealt with $100 monthly requirement companies because in my studies of MLM companies I have found that the average volume for the industry is $100-$200 per person per month. BUT in looking at my downlines over the years the reality of this is that those numbers are skewed by the handful of heavy retailers....most distributors will fall short of the $200..in fact, the majority of distributors DON'T get a commission check and do less than $100. (Most are simply wholesale buyers which is WHY the smart MLMer always works to get his customers to enroll and buy from the company!!!)
So, to force an entire team of distributors to move $500 per month seems to be (in my opinion) asking far too much of a consistent workload.
She told me that in her company (where her downline group does several million) she and they have to do $1,500 PER MONTH in order to get a paycheck and she was starting to understand that in order to continue doing this on a monthly basis she would have NO LIFE!!!!
We ended the conversation with me inviting her to come and visit us and get to know us...only time will tell if she decides to do that.
The point of this email is to make you aware when you get those pay plan calls ...."ours is better than yours"........."why is yours better than ours".........the reality is that ALL comp plans are good for those working hard and making money....the KEY is in understanding the workload needed to make continual residual income...if you need to do $500 to $2000 per month in retail then you have a job .....a JOB that will require you to work home parties every week for the rest of your life, unless you have a weekend booth that you are happy to maintain every weekend for the rest of your life.
I told this "looker" that I have always worked $100 programs because I can easily do the following each month with my products:
- Small retail
- Giveaways
- Personal consumption
The back end of a comp plan pays out about 5% when it’s all said and done so that tells me that if I develop a downline doing as little as $2,000 per month my $100 is free. So once you get to 2k rank in Scent-Sations your product purchases have been covered.
My first goal in any comp plan is to cover costs and in Scent-Sations the 2K rank does that BUT because our products retail for such a high profit you can actually cover your cost by selling half of your $100 candle order each month!!!! This can be a bad thing because most retailers don’t "get" the residual end of MLM and never live the life of freedom that MLM offers.
My second goal in any comp plan is to create a minimum livable income. For me that number has always been $5K per month. Now that's not a ton of money, but I can "get by" on that kind of income very easily so I know that I need to develop a team of distributors doing $100K per month in 6 level volume
My key goal in any mlm is to be making $10K or higher and that means I need to build a team doing $200K per month in 6 level volume or higher.
That is why I focus 100% of my time as a recruiter because that is where freedom and financial security lies!
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