Why is it so hard for people that are involved in Network Marketing and MLM to achieve positive cash flow? Is it lack of proper MLM training? There are thousands and thousands of stories of people that threw themselves into the business excited about the promises of endless residual income only to throw in the towel months later. The truth is that 97% of people will never make positive cash flow. Most will spend months and even years doing what they are told to do by their uplines only to spend their hard earned money buying products and the promotional tools that their companies produce. Even if you belong in the top 3% you are not garunteed the lifestyle you were told that you could achieve. Less than 1 out of 1,000 will make a 6 figure salary. Several factors that we often do not consider make it difficult for us to not only break the cash flow line but enable us to make a healthy secure income in our home based MLM business. The difficulty with MLM compensation plans are that the money is in the long term. However long term is often a difficult task to achieve. Most people are not able to make it to the long term because of a couple key factors.
Whether you are talking about your customers or your distributors this is a problem that everybody in the industry will face. Statistically, 50% of all customers will cancel their product orders within the first 3 months. This means that if you will most likely not see the long term recurring income that we here about so often.
When it comes to distributors the story is even scarier: 9 out of 10 will quit in the first year, 3 out of 4 will quit within the first three months, and 1/2 will quit in the first month. This is a lot like filling a leaking bucket. This leak is taking your time, money, and energy with it leaving you with little profit. You will always be in a race to find new distributors to fill your bucket before the it empties. Wouldn’t it make sense to find a way to plug the bucket? Wouldn’t you jump at the idea of receive 10 years+ of commissions from the beginning if you had the opportunity? Don’t you think your prospects would like that idea? Distributors that receive a cheque no matter how small will stay in the business twice as long as those that ever receive a cheque. By the way, 8 out 0f 10 people will never make a cheque.
2. Low Commissions
The appeal of the traditional MLM compensation plan has always, typically, been the idea of recurring income and leveraging the efforts of a large team. We have already discussed the statistics around what attrition is doing to recurring income, but what about the leverage? The truth is that this can work against you.
Cash flow is a huge problem in the industry. A brand new distributor does not have a team to leverage. They must first build that team. However, their time, energy, and money is being leveraged by their upline. Every time a new distributor makes a sale part of the commissions goes to their upline, which may be quite large. This leaves them with a small cheque.
So, how do we solve these problems? A lot of people are turning to top tier direct marketing. The idea is simple, sell a higher ticket price product with large commissions and only share the commissions with your sponsor and only your sponsor. With commissions on large ticket items, often above 50%, you can make a substantial amount of money on each sale. This means that you can get results quickly! Your team gets results quickly as well!
If you have been in the network marketing and MLM business, like I have, then you understand the frustrations that you can experience when a distributor quits after pouring your time and energy into their business. With top tier direct marketing you get paid upfront with all new distributors that you bring in. This means no more wasting time with tire kickers that are looking for that golden lottery ticket.
MLM has gone through a lot of changes in the past couple of years. With the accessibility to information on the internet people are constantly being bombarded with different opportunities. Many business owners are losing money, getting frustrated, and moving on to greener pastures. Having a profitable business model that is paired the education, support, and training is what can set you apart, and enable you and those you sponsor to be more successful.