The Math In a Traditional MLM does NOT work

Okay folks…It’s time to take a hard look at this industry.

Take off your rose-colored glasses for a few minutes and give this a read.

If you’re being honest with yourself, you know what I’m sharing is right.

The math in the Traditional MLM comp plan only works for a select few, typically in the one to three percent range.

Here’s an example:

• Let’s say I sell my super special CBD oil (Pick any product really) and it’s on a monthly auto-ship of $100.

• I’m a company Superstar and sell 1000 bottles for corporate one month and they earn $100,000

• One distributor earns $10,000 in commissions which leaves $90,000

• Corporate needs to make payroll so let’s say that’s $15,000/month

• Corporate also has overhead: rent/manufacturing/shipping etc – Example $15,000/month

This leaves the company with $60,000 and you now need to pay the remaining 999 distributors

Now…what if a few others do well, let’s say 3% of those 1000 so 30 more distributors earn money.

Let’s be conservative and say they only make on average $2000/month

$100,000 Total

- $10,000 for the Rockstar

- $60,000 for the 3% of distributors (an industry norm that did well), 30 total

- $15,000 for corporate payroll

- $15,000 for corporate overhead

Ok…basic math problem. You have $0 left to pay 969 distributors Annnnnd GO!

That’s what I thought…can’t really divide by zero now can we?

Now, doesn’t it make sense why you see comp plans with binaries where you get paid on the lesser volume leg?

And what about the “Fast Start Bonus” where you got paid once for starting out as a Rockstar but it’s gone month two?

The reality is, when you only have one main source of revenue (The obligatory auto-ship), corporate is limited on what they can pay.

Sure, you will hear the argument “Yes, but you can get customers and make more.” but the reality is when you are one Google search away from finding a similar product or service for less, how loyal do you think your customers who can do the same thing will be to you?

Traditional MLMs have struggled with retention for decades and will continue to do so until this antiquated and broken model gets replaced with a business model that not only helps the big builder but embraces the newcomer.

If you're tired of building huge networks only to make a few bucks each month, or you're actually looking for a business model that works, I would invite you to take a few moments and have a serious look.     http://bit.ly/NotYourAverageCompPlan