MLM Distributor Business Nigeria - How To Maximize Your Network Marketing Business Profit
MLM distributor business guide Nigeria - Multi level marketing distributors are constantly looking for ways to increase their profit.
Simple reason . . . people set up businesses to make money. And mlm distributor business is no different.
The previous chapter in this series discussed the basic tenets of a multi level marketing distributor business.
This chapter focuses on the basic principles of profit maximization (and cost optimization) to help you develop the right business mindset and therefore maximize the profit you generate from your mlm distributor business.
Multi Level Marketing Distributor Business - The Concept of Profit Maximization
There are two key elements that impact the size of profit you make from your mlm business. And they are . . .
Every business has a cost profile whether the business is an mlm distributor business, conventional distributor business, or a service business.
What is the relationship between costs and profit?
It is actually a simple relationship and expressed by a simple formula shown below.
Profit = Revenue - Expenses
That is, profit is what is left after you deduct all business expenses from the revenue your business generates.
Revenue, on the other hand, is the sum of all the earnings received by your business in a given time period. So, we talk about weekly revenue, monthly revenue, and annual revenue.
The higher the cost per unit of revenue generated, the less the profit you make from your mlm distributor business.
For example, if your cost is 70 percent of the revenue you generate, then if you generate $1000 per month, your cost will be $700 and your profit $300.
That is . . .
Profit = 1000 - 700 = 300
Another mlm distributor may generate a revenue of $700 per month and her cost may be 30 percent of her revenue. And yet she will make more money than you because her profit will be . . .
Profit = 700 - 280 = $490
So, even though this other multi level marketing distributor generates less revenue than you, she actually makes more profit than you because she has managed to keep her expenses lower.
This brings us to the concept of cost minimization.
If you want to maximize your mlm business profit, you must focus also on cost minimization because the lower your business expenses, the higher your profit.
Cost minimization and profit maximization go hand in hand.
Generate more revenue.
Increase your revenue growth drive but do it at minimum cost per quantum of revenue generated if you want to grow your multi level marketing distributor business profit.
Cost Minimization Versus Cost Optimization
Cost minimization focuses on reducing your overall business expenses.
However, in the process of trying to reduce you business expenses to grow your profit, you may actually cut down on expenses that are critical to business growth. And when you do that, your cost minimization efforts become counter-productive.
This negative tendency to over-do things is what gave birth to the concept of cost optimization.
Cost optimization is a cost reduction technique that examines the value created per dollar spent instead of the actual amount spent.
Let take an example to drive the point home.
Suppose you spend $100 in a particular ad campaign with a particular web site and generate extra revenue of $1000.
Suppose you ran another ad campaign with a PPC (Pay Per Click) ad network and generated $2000 in extra revenue.
On the surface, it looks like the PPC campaign where you spent $300 is more profitable because you generated $2000 in extra revenue compared to $1000 from the other web site where you advertised.
However, before you reach that conclusion, analyze the expenses dollar-for-dollar.
Let's do this.
Expenses = $100
Revenue = $1000
Result: Revenue generated = Ten times the amount spent; $10 earned for every dollar spent
Expenses = $300
Revenue = $2000
Result: Revenue generated = 7 times the amount spent; $6.7 earned for every dollar spent
In summary, campaign #1 is more profitable than campaign #2.
This kind of simple analysis helps you put your money where the profit is and therefore generate more profit.
Profit Maximization Techniques
Now let's summarize the profit maximization techniques for mlm distributor business and, indeed, any kind of business.
Profit maximization techniques include the following:
1. Grow your business revenue by growing your customer base
2. Attract free mlm leads to your network marketing business by being active in free online forums, blogs, and social network sites like facebook, twitter, Linkedin etc
4. Join the best home base business opportunity that allows you to work from home and reduce cost of commute and cost per new distributor registered
5. Increase your lead-to-customer conversion ratio by using high converting mlm script
You will likely come up with more creative ways to maximize your profit per dollar spent as you think through the process of cost optimization and profit maximization.
Here's wishing you more success and bigger profits from your mlm distributor business.
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