Typical MLM cash flow

Only for illustration purposes only

Depending on the network marketing company, do you see how typical it is for an average builder to spend somewhere between $1,000 to $16,000 as a STARTING INVESTMENT? You can estimate how much you have to make in the long run then only will you break even. But let us see how we can minimise these overheads to generate more cash flow.

What is Your Profit Margin?

One of the key strategies to generate more cash flow is relating to your COMPENSATION PLAN.

Different plans may differ from company to company. Some companies may boast of their high payout. They will say something like this:

Our company is the best because we pay out 75% of our commission to all the distributors! It is like saying for every $100 sale; $75 is paid back to our people. You will never fail with this company!

I urge you to make intelligent financial decisions and NOT emotional decisions because responding to emotional appeal can cause a lot of heartaches in the future.

I won’t cover all the mechanics on plans here, but I will write more about it later where I will explain more in depth about marketing plan mechanics. But for the purpose of today’s discussion, I will list down some principles (marketing plan related) to follow.

• Don’t look at the total payout of the company; look at the first 2 levels of payout: How much you get for recruiting someone, and how much you get if THEY recruit someone. It is no point dreaming how much you make as a ‘Rainbow Diamond Leader’ if you can’t even succeed at the lower levels
• Examine how much you have to spend to RECRUIT someone. Some companies require you to either pay for their training program first, or require you to accompany them into the training session (and you have to pay your own way)
• If you have little cash flow but wish to join a company that requires a large inventory investment but high profit margin, make sure those products can be used to SPONSOR your downline so you can recuperate as much cash as possible
• Can you afford the auto-ship?