Doign the MLM Math
Doing the MLM Math
Don’t be fooled by fat checks being flashed at the top of the pyramid!
A lot of kittens are going hungry to feed a few fat cats at the top!
Are you more likely to be able
to earn money immediately in a
Spa-type Party Plan or in a
network marketing Matrix?
Matrix-type compensation plans—such as those found in network marketing or MLM companies—do not provide much of a sales profit between purchasing at wholesale and selling at retail…which is the quickest way to make money. Typically, network marketing programs offer 15-20% discount from retail to wholesale, whereas BeautiControl gives up to 50% discount. You are much more likely to be able quickly to earn an income of $500 - $2,000 a month by selling retail with a Spa Escape Party Plan like BeautiControl.
But why have people
shown me some really big
checks in MLM or network
marketing programs?
It’s true that a very few people do make a lot of money in MLM or network marketing programs. Why? Because unlike BeautiControl where a healthy share of the income is paid to the Consultant who actually does the leg work to sell the product, matrix pay plans pay a lot of money upline to people at the top of the pyramid organization.
Is that kind of
pay structure legal?
Regulations by the Federal Trade Commission dictate that to be paid on another person’s work, you must have some sort of direct supervision of them, as is the case in the BeautiControl Consultant organizations. But there are loopholes exploited by matrix compensation plans, and on occasion there is simply fraud and unfair business practice that permits people unfairly to profit from the work of others, even if they have no direct association with them. However, the lesson of history is that eventually the law catches up with them.
But isn't it true that in BeautiControl I have to
keep inventory on hand, and in MLM companies everybody buys direct from the company?
The BeautiControl business model is the paradigm of a legitimate business practice: people who want to buy product buy it from you. You are not only their Consultant. BeautiControl empowers you to be in business for yourself.
If most of the people who are buying the product are distributors just making minimum purchases to meet their monthly qualifications for commissions, no one needs to have any product inventory...but that’s also illegal. And when customers you bring to such a program purchase product, you may have to wait for as much as a month for the company to pay you your money.
BeautiControl inventory is money in the bank...and you never have to wait to be paid on your retail sales.
But isn’t the same true of MLM? Don’t network marketing companies have something they call “preferred customersâ€who order direct from the company
and then the company pays you
a commission?
In most MLM companies the ratio of “preferred customers†to distributors is less than 5%. And the “matrix†you hear about is made up not of customers but of distributors. Most MLM companies emphasize sponsoring distributors over sales to customers…and even if it isn’t prosecuted, that is illegal.
How many people do you have to have in an MLM distributor organization to really make
a lot of money?
Between 5,000-10,000 people. for every person in an MLM company earning $25,000, there have to be thousands of people earning nothing at all.
But isn’t it true that
BeautiControl has a
network marketing pay plan?
No. Recognizing the inequities in most MLM companies and matrix compensation plans, BeautiControl provided a career opportunity for those who want to build and lead an organization of Consultants, but first we created a track for people to begin right away to earn retail sales commissions at our Spa Escapes.
Analysis of 2005 Earning Statistics provided by a well-known
MLM company with a Matrix compensation plan
Number who reach the
very first leadership position
of “Directorâ€
6.4%.
Average Director income
$164 a month!
Number who made
$506 per month
0.78% (1 out of 1,282 people)
Number who made
$872 per month
0.36% (1 out of 2,778 people)
Number who made
$1,360 per month
0.12% (1 out of 8,333 people)
Number who made
$25,000 a year
0.08% (1 out of 12,500 people)
This same company—that pays it’s average Director less a month than a brand new BeautiControl Consultant can make at her first Spa!—paid its top income earner nearly $150,000 a month. Where did all that money come from? You got it: by not paying the people doing the work! And it skewed the pay-out so badly that some at the same top leadership level—the highest you can get in the company—made less than $5,000 a month! Quite simply, a matrix compensation plan blocks workers from making as much money as they otherwise would be entitled to by paying unearned windfall commissions to a few people at the very top of the pyramid.
*Information obtained from www.butterflyresults.com
Don’t be fooled by fat checks being flashed at the top of the pyramid!
A lot of kittens are going hungry to feed a few fat cats at the top!
Are you more likely to be able
to earn money immediately in a
Spa-type Party Plan or in a
network marketing Matrix?
Matrix-type compensation plans—such as those found in network marketing or MLM companies—do not provide much of a sales profit between purchasing at wholesale and selling at retail…which is the quickest way to make money. Typically, network marketing programs offer 15-20% discount from retail to wholesale, whereas BeautiControl gives up to 50% discount. You are much more likely to be able quickly to earn an income of $500 - $2,000 a month by selling retail with a Spa Escape Party Plan like BeautiControl.
But why have people
shown me some really big
checks in MLM or network
marketing programs?
It’s true that a very few people do make a lot of money in MLM or network marketing programs. Why? Because unlike BeautiControl where a healthy share of the income is paid to the Consultant who actually does the leg work to sell the product, matrix pay plans pay a lot of money upline to people at the top of the pyramid organization.
Is that kind of
pay structure legal?
Regulations by the Federal Trade Commission dictate that to be paid on another person’s work, you must have some sort of direct supervision of them, as is the case in the BeautiControl Consultant organizations. But there are loopholes exploited by matrix compensation plans, and on occasion there is simply fraud and unfair business practice that permits people unfairly to profit from the work of others, even if they have no direct association with them. However, the lesson of history is that eventually the law catches up with them.
But isn't it true that in BeautiControl I have to
keep inventory on hand, and in MLM companies everybody buys direct from the company?
The BeautiControl business model is the paradigm of a legitimate business practice: people who want to buy product buy it from you. You are not only their Consultant. BeautiControl empowers you to be in business for yourself.
If most of the people who are buying the product are distributors just making minimum purchases to meet their monthly qualifications for commissions, no one needs to have any product inventory...but that’s also illegal. And when customers you bring to such a program purchase product, you may have to wait for as much as a month for the company to pay you your money.
BeautiControl inventory is money in the bank...and you never have to wait to be paid on your retail sales.
But isn’t the same true of MLM? Don’t network marketing companies have something they call “preferred customersâ€who order direct from the company
and then the company pays you
a commission?
In most MLM companies the ratio of “preferred customers†to distributors is less than 5%. And the “matrix†you hear about is made up not of customers but of distributors. Most MLM companies emphasize sponsoring distributors over sales to customers…and even if it isn’t prosecuted, that is illegal.
How many people do you have to have in an MLM distributor organization to really make
a lot of money?
Between 5,000-10,000 people. for every person in an MLM company earning $25,000, there have to be thousands of people earning nothing at all.
But isn’t it true that
BeautiControl has a
network marketing pay plan?
No. Recognizing the inequities in most MLM companies and matrix compensation plans, BeautiControl provided a career opportunity for those who want to build and lead an organization of Consultants, but first we created a track for people to begin right away to earn retail sales commissions at our Spa Escapes.
Analysis of 2005 Earning Statistics provided by a well-known
MLM company with a Matrix compensation plan
Number who reach the
very first leadership position
of “Directorâ€
6.4%.
Average Director income
$164 a month!
Number who made
$506 per month
0.78% (1 out of 1,282 people)
Number who made
$872 per month
0.36% (1 out of 2,778 people)
Number who made
$1,360 per month
0.12% (1 out of 8,333 people)
Number who made
$25,000 a year
0.08% (1 out of 12,500 people)
This same company—that pays it’s average Director less a month than a brand new BeautiControl Consultant can make at her first Spa!—paid its top income earner nearly $150,000 a month. Where did all that money come from? You got it: by not paying the people doing the work! And it skewed the pay-out so badly that some at the same top leadership level—the highest you can get in the company—made less than $5,000 a month! Quite simply, a matrix compensation plan blocks workers from making as much money as they otherwise would be entitled to by paying unearned windfall commissions to a few people at the very top of the pyramid.
*Information obtained from www.butterflyresults.com
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