Business Models Drive the Behavior in the Field
By: Roxanne Green | Posted: 20th April 2007
If you're in a network marketing (mlm) company, or thinking of joining one, take a look at the business model. Do you get compensated for retailing (selling) your product? Or do you only get the big commissions on the distributors/business builders that you sign up? Would you sell your product at retail price to your family? If your compensation plan pays the majority of commissions for sponsoring business builders and not for retailing product, the behavior in the field that will drive is recruit, recruit, recruit.
With the companies that are set up properly, you get compensated (commission) based on anything you sell. It does not matter if those sales came from customers or business builders. Customers are just as important as business builders. That is the way it should be.
The goal in network marketing should not be to be the pushy, aggressive salesman that most people run from, but to help others by introducing them to our products. The majority of network marketing companies out there have good products that can actually help people. BUT, if you wouldn't sell that product to your mom/dad/brother/sister at retail prices, then you are in the wrong company. The reason a lot of network marketing/mlm companies have to charge so much for their products is overhead. If a company boasts that they have hundreds of people taking orders and a massive building, that is where the money is going INSTEAD OF INTO YOUR POCKET as a distributor. Every company has overhead. My home office has overhead. When it is due to large office buildings, a high number of order takers/employees, and brass faucets in the lavatories, it’s called massive overhead. Companies with massive overhead need to inflate their product prices to cover that overhead plus pay the distributors the little that they do pay.
Is the compensation plan of the company that you are in or considering joining set up to pay part time people? The majority of compensation plans are set up to only pay the “heavy hitters”. They only pay those sponsor monsters who go out and recruit, recruit, recruit, but aren’t able to duplicate their efforts. I recently went to my company’s convention and the majority of the people who were at convention walked across the stage and were recognized for their achievements. Even part time people were able to hit high levels in the compensation plan. Your comp plan should pay part time people as well as full timers.
As a Mentoring For Free success coach, I look at the policies and procedures of network marketing companies every day. I also evaluate compensation plans. Some of these companies out there don't even pay you if you retail your products. They only pay on business builder volume. That's SAD!! And it's possibly criminal.
Speaking of Policies & Procedures, have you read yours? This is NOT your Terms and Conditions, it is the Policies & Procedures and EVERY network marketing company must have them. This is your contract with the company. Some companies hide them until after you’ve signed up as a distributor. The worst part about that is the fact that you agree to abide by them when you sign that agreement.
I've heard people tell me "They were over 20 pages of very small print and I wasn't about to read all that." I've also (after pointing out that the company's P&P's say you can be terminated at ANY time for ANY reason) had people tell me "Oh - but they won't do that to ME". Believe me - many people have been done in by that clause. I don't know about you, but I want to build a business that will be there to pay my children's children. Do you?
About the Author
Roxanne Green is a Mentoring For Free success coach and mentor.
If you've been struggling in network marketing or looking for a new company, Roxanne can help. She will do a free coaching session with you to help you see why you haven't been successful and help you figure out what is the best path for you to take from here.
Contact Roxanne TODAY for a free eBook and free coaching at http://www.NetworkMarketingRules.com
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Tags: business model, money, part time, commissions, network marketing companies, office buildings, heavy hitters, compensation plan, recruit, mlm companies, compensation plans, retail price, network marketing mlm, retail prices, business builders, mom dad, brother sister