MLM Business Success | If the Compensation Plan be Worthy, Screweth Not With it.

Once upon a time, several Upliners (MLM distributors who had built modest to large organizations) were sitting around the village fire pit.

"Woe," saith one Upliner to another, "My bonus check lacketh sufficient zeroes to the right."

"Verily," saith another, "I have been also been concerned about this thing."

"Where canst we get more zeroes?" asketh another.

"Well certainly not from me," saith the first.  "Nor me," saith the second.  "Verily, not from me," saith the third.

"And surely, we cannot get them from the chief, or from each other," proffered another, "but perhaps from the slaves.  Let us speak with the chief about this matter.  Perhaps he will permit us to extract more zeroes from the slaves."

And so it came to pass that the village Upliners spoke with the chief, who granted the Upliners permission to extract more zeroes from the slaves.  Whereupon the slaves, one by one, stole away into the night, seeking kinder masters.

The End
*******

Now, I'm not really saying the new, low-volume, or distributors with small organizations are really slaves.  "Artistic" license.

But, isn't this is the story of so many MLM companies?  The upline distributors are dissatisfied with their checks.  (Fact of life:  EVERYONE is dissatisfied with their checks, no matter what the size.)  Since the upline people have organizations (definition of upline), they have the ear of the company management.  The downline people, NOT having organizations, DON'T have the ear of management.  So, guess whose wishes regarding tinkering with the compensation plans at whose expense prevails?  (Hint: It's not the downline's.)  Then, since the downline has no power, no voice, and no choice, they just quit -- in droves.  And the upline then has even MORE complaints aboutthe size of their checks.

Here is what happened with one company, Vitatonics:

Vitatonics had a pretty good modified unilevel plan, paying something like, as I recall, 20%, 10%, 5%, 5%, 5%, 5%, and maybe another 5% on another level and 5% on an infinity basis, or maybe it was 10% on an infinity basis.  Whatever.  The first few levels is what's important for this discussion.  This percentage distribution was on regular (second and subsequent) sales.  But, on the first sale a new distributor made, the company paid 50% to that distributor, to defray his recruiting expenses, and 10% to the next immediate upline.  So, the people further upline were cut out of any overrides or bonuses on that first sale, but for the first sale only.  The people upline got paid on subsequent sales with the regular pay structure.

With this plan, Vitatonics was growing nicely, and the uplines' checks were growing nicely.  But obviously not fast enough for some of the upline people.

So, the Vitatonics management changed the compensation plan, discarding the first sale bonus, and it was downhill from that point onwards.  They made several more desperate changes, including a name change from Vitatonics to Health Club Network (HCN), and each time screwing up the compensation plan even more.  After each change, they lost distributors, growth halted, and the number of active distributors declined.  One of the co-founders then bailed.  The other co-founder tried a while longer with a really bad basically unilevel structure; finally he and the few hundred (couple of hundred?) surviving distributors went over to another company with an even worse compensation plan.  Vitatonics/HCN is no more.  Greed goeth before a fall.

The pity is, Vitatonics had EXCELLENT products at reasonable prices (even compared to conventional retail prices), but the payplan went from fairly good to bad to worse.

Here is what I wrote to the principals and some of the major upline people, advising them against changing the comp plan.  They ignored me.  The company is no longer in existence.

I repeat, from fax of yesterday:  Granted that the upline may put in a lot of time on 3rd level and below, without getting anything from First Sale Bonuses (FSB).  Maybe, just maybe, the uplines will have to live with the fact that they are not going to get a bonus on every downline sale, even if they help with them, JUST AS THE DOWNLINE HAS TO LIVE WITH THE FACT THAT THEY AREN'T GOING TO GET A BONUS FOR EVERY PHONE CALL THEY MAKE.  Maybe, just maybe, you are trying to address an unsolvable problem, which is:  Most people are going to buy a bit, then quit.  Deal with it.

If you don't give the distributor a healthy FSB, he isn't going to do anything at all, so you'll NEVER get follow-on order upline bonuses.  If you DO give good FSB, you at least have a shot at follow-on orders and the resulting 5% bonuses.

YOU GET RID OF THE FSB AND YOU LOSE A MAJOR TALKING/RECRUITING POINT, ONE THAT REALLY DIFFERENTIATES THE VITATONICS COMPENSATION PLAN FROM THE "SAME OLD, SAME OLD" OTHER ONES OUT THERE.

Regards,

David A. Bean

If, in the past, you have tried one or more MLM opportunities, it's likely that you have been been disappointed.  Next time, make sure you get involved with a SUBSTANTIAL MLM opportunity that gives YOU a chance to profit.

My recommendations for your Network Marketing success is that you seek out Network Marketing companies with quality compensation programs and quality products at reasonable prices, as well as first class distributor support.

If MLM companies you are interested in do not meet ALL the requirements as outlined in "How to Evaluate a Network Marketing Opportunity", you will suffer frustration, undeserved loss of self-confidence, and serious loss of time and money.

You can't turn a sow's ear into a silk purse; you can't even turn something "close" into a winner, as I have found through bitter experience.  "Close, but no cigar" doesn't count; it's all or nothing.

To learn how to determine which Network Marketing companies will provide you a good chance of actually making some money, in addition to making available to you many of the products you will require for a long and healthy life, you really need to GET AND READ the VITALLY IMPORTANT book "How to Evaluate a Network Marketing - MLM Opportunity".

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