High Margin MLM Business Opportunities - Don't Fall For Their Tricks And Gimmicks!
by Samson Itoje
Almost all mlm companies offer their distributors (or marketing partners) a bonus often referred to as Fast Start Bonus or new customer bonus.
The fast start bonus is the amount paid to the distributor when he or she enrolls a new affiliate or distributor who purchase the start-up kit or activation pack.
The size of the fast start bonus varies from company to company.
Some network marketing companies offer a high fast start bonus while others offer what some distributors call token fast start bonus.
For example, there is a particular liquid dietary supplement mlm company in Nigeria that offer distributors fast start bonus that is about 40 percent of the cost of the new distributor registration pack.
In contrast, a similar liquid dietary supplement company in Nigeria offers a fast start bonus of 12 percent of the cost of the new distributor registration pack.
Now suppose you are thinking of joining an mlm company (or changing to a new company), which of these companies would you choose to join?
Company A with 40% fast start bonus or company B with 12% fast start bonus?
Of course, you may be tempted to choose company A over company B because the fast start bonus of company A is more than three times that of company B.
You could make a fatal business decision if you choose an mlm company purely on the basis of the size of the fast start bonus.
In fact, setting a high fast start bonus payout amount is a common trick used by many mlm companies to lure inexperienced network marketers and newbies to their business opportunity.
Why do I call this a trick?
It is because when it comes to network marketing business, earning a high profit margin upfront (A.K.A. high fast start bonus) is not the key to success.
Why High Fast Start Bonus Should Not Be The Basis For Choosing One Company Over Another
There are two key reasons why you should not choose one mlm company over another simply on the basis of the size of the fast start bonus.
First, mlm companies pay fast start bonus one-time. This means that fast start bonus is paid only once . . . the very month or week the new recruit purchase from the company.
So, no matter how big the size of the fast start bonus is, you will only receive it once even if the new recruit continues to purchase from the company for the next 10 years (or 120 months).
Second, what makes the network marketing business model attractive is the promise of residual income.
What is residue income?
Residue income is the income mlm companies pay to active distributors based on the sales volume of their team. And this is paid weekly, bi-weekly or monthly depending on the company in question.
In simple words . . . you do the tough work of recruiting a member once and get paid the repeat purchase bonus again and again every time the individual buys from the company.
From the above, it is obvious that the income you should be most concerned about is residue income . . . the repeat purchase bonus.
So, before joining a network marketing opportunity, you need to personally read the compensation plan document.
Your key concern should be the residue income potential of the mlm company and NOT the size of the fast start bonus.
You should ask this question: "How will you pay me on the repeat purchases by people I enroll, the people they enroll and the sales activity of everyone in my team?"
Also remember to ask this question: "Who constitutes my team?"
Company A VERSUS Company B - High Fast Start Bonus Versus Solid Residue Income
At the beginning of this article I spoke about company A with 40 percent fast start bonus and company B with 12 percent fast start bonus.
I also mentioned that most newbies and inexperienced network marketers would choose company A with high fast start bonus over company B with lower fast start bonus.
But what would an experienced network marketer do?
An experienced network marketer would look beyond the size of the fast start bonus and ask the all-important question: "Would you pay me on the purchases of everyone below me in the system or on the purchases across some levels?"
Now let's evaluate company A and company B based on this criteria and two additional ones that constitute key questions to ask before joining a network marketing company.
Summary - Company A:
i) Start-up capital is =N=34,000
ii) Fast start bonus is 40 percent of registration amount
iii) Bonus on repeat purchases is paid up to 10 levels deep
iv) To earn up to 10 levels deep you must buy products worth =N=44,000 per month as autoship
V) Accumulated sales points (or QV) flush at the end of the month and you start from zero at the beginning of each month
Summary - Company B:
i) Startup capital is =N=15,000
ii) Fast start bonus is 12 percent of the activation amount
iii) Bonus on repeat purchases is paid based on sales by everyone below you in the system even if you did not personally register them
iv) Monthly autoship is 1pack of product which is =N=15,000. And this qualifies you to earn to infinity.
v) Accumulated sales points do not flush at the end of the week or month. You can carry points from one sales period to the next and get paid on them.
What Would Be Your Decision?
Take a moment to review the five aspects of company A and B above.
Which company would you choose? Which company do you think would make you more money in the long-term?
Obviously, company B is the better choice.
Remember . . . you probably would have chosen company A if you were evaluating both companies purely on the basis of the size of the fast start bonus alone.
Dig deep before you join any mlm company. Ask the right questions so you can make the right choice that will make you a fortune.
Click HERE to talk to Samson Itoje, the Nigerian MLM Consultant.
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