The last thirty years has brought many changes to the multi-level marketing industry. The most dramatic is a new pay system that more fairly distributes the commissions to those making the sales.
In a nutshell the old way of doing business – multi-level-marketing companies are slowly becoming extinct with anything more than three levels of pay.
How it Worked in Years Past
MLM companies established a pay system that was based on a huge volume of people selling a little bit of product and as your team grew you were able to increase your income over a long period of time through lots of people.
What’s Different Today
Now, though, with the two tier system, the whole concept has changed and is now named network marketing. This means you still have a team to work with so you are not simply selling as an independent direct marketer. But the largest share of the commission goes directly to the person who makes the sale and a much smaller part goes to the team leader.
Now that payouts are done this way you wonder why it was ever done differently but if you think about it when you are selling soap or any other lower priced item then volume to the company comes by the ingenious concept of an army of individuals selling a little each with overrides going to the team leaders.
All the top network marketing companies are using this two-tier system now where you are paid well for your individual sales and your team leader receives an over ride, much like in the insurance industry.
The folks who are generating the sales need to be the same ones who are paid well for their own personal production. Many industries use similar pay structures to this two tier pay system.
Choosing Your Product – High Priced High Profit versus Low Priced Low Profit
When you choose a product to market either as a direct marketer, network marketer or multi-level marketer you have two choices:
1-Choose a product that requires a huge sales volume due to a low price point and therefore a low profit margin – this type product is easier to sell but requires a lot of volume.
OR
2-Choose a high quality product with high profit margins so you can afford to market and build your business – this type product may be a harder sell but you don’t need the huge volume just to make a profit.
In whatever payout system you are in you need to represent high quality products and it is helpful if there is brand name identification.
You Need a Marketing System
Either way – whether network marketing (the preferred system for many) OR MLM, you will definitely need a marketing system in place because both require large numbers of leads and prospects.
With an online system in place these potential buyers / business owners will be funneled through a process to weed out the buyers and serious business builders from the tire kickers.
Your Team
The marketing team leader must provide methodologies and / or training for generating leads as this will be your primary responsibility. Today it is no longer just rah-rah go out and get them, but rather providing functioning systems with proven results.
Selling the old way, by just talking to people you know and who knows them simply will not cut it in the world we now live in.
Keep in mind that automation using a systematic approach will build a giant business for you. But the one to one help and encouragement of a human being like you is still a significant part of the success formula in network marketing – that would be you. And, of course, that’s much of what you get paid for!
Jack Funderburk has owned and operated small businesses for 30 years, now online He provides resources for those starting internet businesses. Jack teaches a simple formula: First, Learn Marketing / Advertising; Next build a system that pays for your advertising; Then build your primary online business.”
To Learn More Go to:
http://BuildingBusinessesOnline.com
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