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Network Marketing 102: Understanding Your MLM – Network Marketing Structure

After observing much confusion in the marketplace surrounding the  details of network marketing structure, it is apparent that more clarity is needed.  If you missed our first briefing on network marketing structure, feel free to peruse it here:  Network Marketing 101.
After reading today’s article, you will have a good understanding of how to:
 
1)   Avoid plan  pitfalls  and use them to your   advantage2)  Stay in control of quotas and use them to motivate3)  Build team strength and motivation from the bottom-up4)  Use tips and tricks your upline may be keeping from you

Accumulation. The concept of accumulation in network marketing allows distributors to save up purchased products and accumulate point value to reach the next rank.  For instance, if you need 8,000 points to go from 5% payout to 10%, your product purchases can be spread out over time.  Not only do you get more time to reach your goals, you can also go on vacation for 3 months and pick up right where you left off.  Accumulation can also help to insulate your business from the effects of demotion.

 
 There are some disadvantages to accumulation, however.  Often it encourages new distributors to buy positions in an effort to make more money faster.  If there is no time frame, then there also is no incentive to move product consistently.  If too many people in your organization reach the highest levels of commission without buying or selling additional product, there will be no sales volume for your organization.  No sales volume = no income.
 
To avoid the pitfalls of accumulation, educate your team by setting a good example.  Distributors who use the company product in their everyday lives can better testify to its value and credibility.  This is not difficult when you are representing a great product.  How do you know?  Ask yourself this:  If the company were to disappear tomorrow, would you think of how you could get rid of your product or start looking to see where you could get more?  A good rule of thumb is the 80/20 rule.  At least 80% of distributor product purchases should be sold to the consumer with the remaining 20% consumed by the distributor.
Buying a Position.  In some network marketing companies, purchasing additional products allows you to climb the ladder of success faster.  This can be accomplished by buying a high volume of products or buying multiple accounts and stacking them under each other so that income from the network flows into one person’s purse.  Even though many criticize this practice, there is nothing unethical about it.  Buying positions is acceptable as long as the products are reasonably priced.

Front Loading.  The concept of front loading allows a distributor to buy lots of product in order to meet a target faster, thereby moving up the ranks faster.  One thing to keep in mind when using this strategy, is that your product investment does not “grow”. If executed wrongly, there is the potential to devalue the product in the eyes of the consumer.  

Autoship Profits. Autoship or maintenance is the sales volume that distributors are required to buy from the parent company on an on-going basis.  Maintenance may be optional at some companies, but in order for anyone to make any money, everybody must buy something.  One trick of the trade in keeping your team motivated is working depth. 

 
Using this strategy, the leaders of the organization focus their efforts on the newest members of the team.  By helping them to get their businesses up and running, they are generating sales volume from the bottom up.  If the newbies are generating sales, then everybody is making money and you’ll never hear griping about maintenance.  Good leaders are always building depth into their  organizations.

Food for Thought. We all aspire to build our own work at home empires.  However, the problem with many distributors is that they are excellent at introducing people to their business, but they don’t have a follow-up training platform that helps new distributors to become solvent.  The most successful and rapidly expanding businesses may not have the absolute best product or comp plan. 

 
What they do have going for them is a solid training system for new distributors.  If you ponder on the structure and depth of the most famous hamburger franchise in the world, you probably already know that their hamburgers aren’t the best out there.  Nobody can beat Mom and Pop burgers, but what is it that makes those other guys so successful?  It’s simple.  Their primary business is not selling hamburgers.  They make their money by  selling money making systems to entrepreneurs!  Their standard operating procedures are virtually fool proof so that new business owners make money from day one.  Eye opening, isn’t it?

Now that you know the secret to success in getting Maximum Leverage in network marketing, you can  set your own organization up for success.  Not only should you establish a marketing plan, but a training plan for your new team members to be able to hit the ground running.  By doing this, you can ensure your own success by investing in the success of others.  Not sure how to set up a training plan?  Step into a system that is done for you and your new representatives.  Click here to learn how to Get Famous on Facebook in 60 Days.

 

Regardless of your current status, (work at home mom, a stay at home mom aspiring to work at home, a single or married career mom) Rod Stinson offers great insight on how you can leverage his experience to attain work at home success! Get started in Network Marketing and get on your road to success today! 

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