That’s what a gent asked me on a call last night. He wanted to put that in his profile on Network Marketing Central.
I asked him, “What do you want to make with your business?”
“50,000 per month.”
Moi:
“Great. Can you tell me quick how much in orders you need to bring in to your company, for them to pay you $50,000 per month? Assume they pay you 5% of all orders you and your group bring in each month.”
Pause…
Someone yelled out, “One million dollars worth of orders each month!”
Gasps and wows all around.
“And if they pay you an average of 10%?”
Someone else, “He has to do $500,000 in orders each month.”
More gasps.
Your turn. To make $10,000/mo, how much does someone have to bring in orders to the company? Assuming they pay an average of 5% on all of it? Or the less likely 10%?
Should we stop giving others the impression that it’s easy to make $10,000/mo?
(Answer: $200,00/mo or $100,000/mo in orders.) Easy, huh?
Thanks for posting this story. I was on that call, and I remember thinking afterwards: “after trying for 3 years to make “the big money” in network marketing, making $10,000 a month running my own tradional business has been a cinch.”
People appreciate the truth. And when we let them know up front that network marketing takes work, and can be challenging, they are more prepared to ride the ups and downs.I have noticed that the people who have quit in my downline, were people who could have succeeded. However, they were coached (by old school upline) to focus on the “big money” and were mislead about how much effort and work and fortitude it would require. When things got tough, or didn’t go as planned, they got discouraged.
By over focusing on those few people who do go straight to the top and earn $10,000 a month, we discount the value of all the people who earn $100, $200 or $500 a month. Those are the core of our business. We have to remember that network marketing appeals to people who are not really business minded. The fact that they earn ANY money at all is amazing.
If we tell them upfront what is required, we give them the opportunity to make an informed decision. Isn’t that all any of us really want?
I agree! — Kim, you make it so clear – how much easier this is to explain it up front. I did a calculation of my income, based on the amount of $ that went through my organization, monthly, and it does come out to 8% to 10% most months.
I know that for myself, even though I was earning good money — sometimes I would feel like a failure, because others made it sound so easy, and yet I knew it was taking a lot of work and commitment on my part – evening and weekends when I worked full-time. My commitment kept me going, but I certainly would have liked to have had a clearer picture when I started.
This now also gives me a very clear and honest way to share with others.
Thanks, Kim.
Chanel: Indeed that’s what most people want – when they’re not in their most vulnerable mode. That’s when promises become lures and otherwise good people leave their brains on the train…
Diana:
Indeed, knowing how it gets made is empowering – it always has been to me, because then I both appreciate what needs to be done, plus I KNOW what needs to happen to make that money, whatever it is I want to make.
Thank God for this one. I absolutely abhor and detest outrageous, overblown, irresponsible claims of huge 6 & 7 figure incomes to be made in the Network Marketing industry. Who do they think they are fooling when people make these outrageous claims? Take a look at the real world and real business and see what percentage of people make 6 figure incomes even. Makes my blood boil.
Rant done.
Here’s a novel idea…
Want to make $10,000 per month?
Why not do it all with just customers?
Do you think that would be harder or easier than going after people to do the business? Aren’t there more people who are prospects for your products, than there are for your business? Yes, of course there are. So why not go after the larger and easier of the two?
Assuming that your company has a viable retail program, don’t you make more money on a customer than you do on a rep in your company’s pay plan? I bet you do.
Here’s a mathematical example:
Rep: $100 Retail – 25% = $75 Rep Cost x 10% Rep Payout = $7.50
Customer: $100 Retail x 25% Retail Payout = $25
* In this example, you’d need 3.33 times as many Reps buying your product every month, to make the same as ONE customer. What if you made 30%, 35%, 40% or more on retail???
Which is easier to get, and which pays more?
I know which one I’d rather have.
So to make $10,000, just divide it by $25, and you’ll need 400 customers. And, using Kim’s “100 Customers In 100 Days” program, you’ll have the skills necessary to start building your own heap of customers in no time at all!
C.J. Dougan
TheNaturalRemedy.com
Network Marketing Central Member
C.J. You know I’m with you here.
I had a gent in class who said that as soon as someone signed up in the business and bought that initial order of about $450, he could make almost no more money on that rep’s future product orders – his percent dropped to 2-3%.
Yet the company and his sponsor insisted he should get everyone to buy in at the $450 package to get the one time $50. Trouble is, after that, the person usually did nothing else, since they had enough product for a year.
So he said he had no customers, having talked them into becoming reps who bought too much product and who now did nothing anymore.
And were they to buy more, he’d only get 2-3%.
So it’s easy to see why people recruit and try for the up front orders – it’s where the companies put nearly all the money.
And that is a choice they make. They could easily put more into the customer side, but they too, are mesmerized by the loud, big recruiters who can get big orders out of people.
They make if off the backs of all the little guys out there, who could do it once or twice, but no more.
Who here has a company that recognizes the importance of regular customers and proves it by putting some money into that side of the business?
I mean 10-30% for regular customers who are NOT reps. Just customers, like preferred ones, or auto-ship types. And yes, customers that are front line to you, not have to be placed somewhere under you for you to get what you deserve for having found them.
Anyone?
Anyone?
Kim,
In my primary MLM program, the company pays out $10 on a retail order $39/bottle… (25.64%). The customers do not go into the pay plan (a 3-wide matrix), but do contribute $25/bottle Commission Value/CV to our personal volume, which is paid out upline in the pay plan.
Also, for those with a “local” retail market, they can buy a 12-bottle case for $240 with free shipping, which is $20/bottle, and it can be retailed for $40/bottle… a 100% Markup. The company also pays out a Case Bonus of $20 to that person’s sponsor and to that sponsor’s sponsor ($40 total), then puts 50CV per Case into the purchasing Reps position, which is paid out upline in the pay plan.
By doing it in this fashion, the company has a viable retail program, while still supporting the MLM pay plan.
Who else has a company with a viable product retail program?
If you had 100 Retail Customers, purchasing an average amount of product from your company every month, how much would they pay you?
Anyone?
Don’t be shy. =:)
C.J. – If customers get their product direct from the company with an auto-ship type program, what does the sponsor of the customer earn then?
Usually there’s a preferred customer price, and since the goal is regular customers who get their product direct from the company, those are the markups (I know it’ll be a range depending on one’s commission level) that will be fun to compare.
Versus those one time retail sales which are not the repeat sales that make having customers so much fun and gives all the leverage – like an AOL empire…
So then, if you had 100 of those types of customers, how much would they pay you?
Hehehe.
Kim,
Hmm…
Well, the company doesn’t really have a “Preferred Customer” (discount-price) option, it’s either Retail Customer (autoship available) or Rep/Member (mandatory autoship).
I earn $10 per bottle on Retail Customers, including re-orders. The retail cost per bottle is $39 + $7 Shipping… $46.
The other ordering option is Rep/Member, and the cost is… 1 bottle = $32/25CV, 2 = $64/50CV, or 4 = $125/100CV (not including shipping of $7, $11 or $14, respectively). These members go into the 3-wide matrix, and depending on the level, commission is from 3% to 20%. So, 1 bottle would earn me from $0.75 to $5, 2 bottles would earn me from $1.50 to $10, and 4 bottles would earn me from $3 to $20… monthly.
Of course, this is only the basic matrix pay, and there are other bonuses, including a first-order Rep/Member Fast Start of $15, $30 or $60, respectively, and back-end bonuses for achieving certain milestones.
I know we don’t want to get bogged down with too much detail, as most compensation plans can be quite convoluted… most for not-so-good reasons (another topic completely).
I hope this proves useful, as a starting point for comparison purposes in this blog topic. =:)