It's not your fault

Okay, let's get back to the business of TransformingMLM.

What I'm going to do is use the original pieces authors submitted as talking points here (with their permission of course). First up, a piece from Roberto Torres, titled Business Models Drive The Behavior In The Field. I admit, this is something I never really thought about before and... Roberto's point dropped on me like a very large brick. Check it out and let's discuss it.

But first, check out the magazine cover, just in case you have a question about whether or not Mr. Torres is a serious force to be reckoned with (yes, that is Roberto)...

Business Models Drive The Behavior In The Field

Are you currently building a network marketing business?

What would you say are your two biggest business challenges?

Would you like to do something about them?

I am going to assume you would. And here’s the first thing you need to know:

Some of the challenges you are experiencing are not your fault! The Cards Were Stacked Against You! You just didn’t know it. Therefore it is not your fault. And here is how they were stacked against you.

See, when looking at a network marketing company one of the first areas we should review is how the money is being spent by the company. Because the only place that money comes from in a network marketing company is from the compensation plan. This is how the distributors get paid and how the company gets paid. So, it's very important to understand how money is spent.

This occurs in several ways, but the way most network marketing companies do it is to go out and build a big multi-million dollar building, which we see on the brochures, the web site and the fancy flash presentation. 

So, lets say the building cost $20 million dollars to build, where did the money come from?

Did you just whisper the compensation plan? You are correct; the money came from the comp plan! Many times the company also builds these buildings in some of the most expensive real estate areas in their state. Now, you never get to use that building, yet you paid for it. How? 

Well, you see you are the company. The company pays you for moving products and marketing. The company delivers the checks and the products. You the distributor built that company! 

In network marketing, the only place that money is made, whether by the distributors or the company, is from the compensation plan. Network marketing companies do not have another stream of income that generates money for them. It all comes from the compensation plan.

So, when you see spending, that is money that will not come back to you through the compensation plan.

That's ugly enough, but it gets uglier. That beautiful building now requires maintenance. They need a cleaning staff. It has to be painted, windows have to be maintained, bathrooms have to be maintained, and these buildings get cleaned every night. They have a water bill, an electric bill, heating, air conditioning, property tax bill, landscaping bill. Everything you can think to keep that beautiful showy for all the potential distributors and the current ones to admire.

Where’s the money coming from?
That’s right; it’s coming from the compensation plan. Distributors pay that monthly bill. That is money you will never see come back to the compensation plan. It’s gone.

Now… when do YOU plan on using that building?

Did I hear you say, “Never!”?

Exactly. You will never use that building, yet you are paying for it. And that’s not all. Along with that these network marketing companies brag about their call center, a 300 person, 400 person, 500 person call center, so people can place orders 16 hours a day, 18 hours a day, 24 hours a day. The challenge is the every one of those people at the call center are employees of the company. 

They require a weekly salary, health benefits, dental benefits, sick leave, maternity leave, paid vacations, sexual harassment coverage, workmen’s comp, office space, desk, phones computers, typewriters etc, etc.   Along with that they are going to expect a raise and bonuses if they are going to work for the company for the next 15 to 20 years and lets not forget that they will also need a pension plan.

That is a monthly bill.

Guess Who Is Paying This Bill?
Exactly. You are! Again this is more money that will never come back to you in the compensation plan.

Now… as this business model gets older will it cost less money or more money in the future?

Sure. It’ll be more. As the building gets older, it needs more maintenance. The longer the staff works there, the more salary they expect. As the company grows, they’ll outgrow the building… and, of course, build another new building!  Where is the money going to come from? You guessed it the compensation plan. This is where you will start to see many network marketing companies raise the price of the product(s) and cut or flat line the compensation plan.
____________________

More from Roberto tomorrow.

So, what do you think? Did you know you paid for all of that? As said, it wasn't soomething I'd considered before. Hmmmmm. Perhaps...

It's time...
In Search and Praise of Network Marketing Excellence
You really should buy a copy here >>

Comments

[Gordon Milton]

I have never heard anything so ridiculous. I completely disagree.

The company and the network are independent entities therefore it's crazy to say that there is only one compensation plan.

There are two compensation plans. One for the network and one for the company.

What I do with my share of the network compensation plan is nobody's business but mine and maybe the tax department.

However the company apportions it's compensation plan is nothing to do with me.