Network Marketing Compensation Plan:
These Four Rules Will Help You
Find The Right Compensation Plan
With the focus of mlm shifting from the network marketing compensation plan to effective mlm training, it's rare to hear this topic discussed nowadays. Sure, occasionally, you'll see a "ground floor" opportunity advertised on facebook or a blog promoting a start-up network marketing company with a "revolutionary comp plan." Nevertheless, the new generation of entrepreneur network marketers seem to be turning their focus towards what's really important in network marketing which is leadership, marketing, and prospecting. That said, distributors shouldn't completely discount the network marketing compensation plan as makes up a large part of what we do. Researching and evaluating a compensation plan is one of the important steps everyone should go through when joining, switching, or promoting an mlm. The problem is, there are still a few network marketing compensation plan "myths" floating around the industry that end up doing more harm than good. We still here things such as: "Our payout plan is setup to where the business builds itself."...or "Getting rich is about being in the right place at the right time" ...or "If you sponsor 5 people, and those 5 people sponsor 5 people, and those people sponsor 5 people, within a few levels you'll have an organization of 1,000,000,000 people!..." When the excitement dies down and the hype dissipates, our logic and common sense start to kick in and we realize that the statements simply don't make sense. My goal today is set some hard and fast rules to a network marketing compensation plan to help you in your research. Knowing these rules will not only help you better explain this business to your prospects, but it will also help you have confidence that, no matter what company you choose to pursue and organization with, you have made a smart decision. Rule number one when it comes to a network marketing compensation plan is compensation plans always look good on paper but.... Very rarely have a been to a Thursday night meeting or watched an online video where I didn't get jazzed about the possibilities of growing my organization to a bazillion people and making $1,000,000's residual. Don't get me wrong, you can make a fortune in this business and many a millionaire has been created in the network marketing industry. However, recognize that what looks good on paper rarely pans out into reality. Don't believe me, check out these numbers: -The average distributor sponsors 2.5 people in a lifetime -80% of network marketers never sponsor anybody -80% of network marketers quit within their first three months -10% of network marketers sponsor 90% of the distributors. Pretty staggering right? Don't let those numbers depress you though. Instead let yourself be empowered by knowing that you can be part of that 10%. In fact, you're already taking the correct steps to get yourself there by investing in network marketing education.
The second rule of thumb with network marketing compensation plans is to avoid believing the myth that "the right compensation plan will make you rich." I don't know about you, but I choose not to believe that riches are limited to chance which is in essence what this is saying. Think about it. Certain network marketing companies would have you believe that there compensation plan is the "right" one and it can make your rich. This sounds alot like a Las Vegas casino marketing pitch to me. Guess what? The right slot machine and enough money can also make you rich but you're leaving it up to chance. Success is not based on chance. I refuse to believe that and you should to. As far as I'm concerned there is no "right" comp plan as every comp plan will have it's pro's and cons. The right network marketing compensation plan won't make you reach but consistent training + action can make you rich. The third rule of network marketing comp plans is to stay away from plans that claim They will build your business for you. Once again, this is a ludicrous statement. For starters, if the business system builds itself, why in the world would it need you? You have to ask yourself why it is that you are being paid and what you're being paid to do. Looking at an mlm organization from a legal standpoint, a company cannot pay an employee (or independent contractor) for nothing. There has to be a sale of product involved. The way I see it is as a distributor, you're being paid to makes sales..at least at first. Once you've made a decent amount of sales you can "move up in the company" per se and focus more of your efforts on leadership and sales team building. If you think about it, it's not that much different than working for a company except you do your own marketing, prospecting, and leadership development (despite what the company tells you). Therefore, don't be fooled...the organization will not build itself The last rule to keep in mind when researching a compensation plan is "If you can't easily explain a compensation plan or if you don't fully understand one, stay away from it." Despite what you may have been told, it IS important for you to understand and be able to explain the network marketing compensation plan. In fact, one of the reasons I left a former company is because I never did fully understand the way I was or could get paid. My upline would always brush it off and say "don't worry about it, just recruit distributors, and the rest will take care of itself." Well, that wasn't good enough for me. I was curious and wasn't about the dive into business hard core until I had a sound understanding of my compensations structure. While I agree with my former upline in the sense that the compensation plan shouldn't be the the only thing you pay attention to, it is worth paying attention to. Undoubtedly, there are many types of compensation plans and my purpose in this writing wasn't to explain the kinds. click here for an overview of the 5 most popular types. Finding the right one for you can be a bit of a chore at first. However, I believe it's worth the extra effort you put in and if you follow these rules, you're chances of finding one that works for you is much higher than it would normally be. If nothing else, you're prospects are going to ask you why you chose the network marketing compensation plan you did. Wouldn't it be nice to explain to them all the research you did and give them a concrete reason why you came to the conclusion you did?
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