Network Marketing - A Business Opportunity




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This information is meant to serve as an example of a succesful network marketing organization. Please refer to your own company's Policy and Procedures manual for detailed information.

Network Marketing ... a Multi-Billion Dollar Industry!

Network Marketing is a growing $60 billion dollar industry. It includes millions of independent business people just like you from all over the world. In the United States, one out of every four people are either distributors or consumers of network marketing companies. These network marketing companies account for over $18 billion in annual sales!

Never before in the history of network marketing has there been a better time to begin a network marketing business. With the advent of the World Wide Web, the potential exists to reach millions of people for very little money spent. And, according to CyberCash, one of the nation's leading online Electronic Payment System companies, by the year 2000, electronic commerce over the Internet will account for over One Billion Dollars in global transactions!

How Network Marketing Works

The goal is to proactively bring products and opportunity directly to the market by helping independent associates of your organization use the systems and marketing techniques that have already been proven to build the fastest and largest organizations in the industry today! The system is designed to maximize marketing. The entire focus of the plan is to develop five key people ... five people ... to learn and implement the system ... who then become confident in teaching the system to their five people.

The single biggest reason why anyone drops out of network marketing is because they simply do not understand what to do next! This is understood which is why the entire organizational plan is developed around a very limited number of people to give our network marketers one-on-one support.

When you become an Independent Associate of a network marketing organization, the system you learn should clearly define each step for success, support you as you learn the system, and provide the tools you need to accomplish each step, empowering you to be fully confident in realizing your goals!

How The Business Works
A good plan is simple yet extremely effective. The very foundation of an effective business is for you to find and develop FIVE motivated people who want to create financial security. Then teach your five people how to develop their own five.

The following chart is only an example of how a successful network marketing compensation process works and does not indicate nor imply any form of gauranteed structured compensation. Each individual's results will vary depending upon self-committment and self-motivation.

An Example of a Successful Compensation Process

Level ....Organization People/Sales Total Sales Volume Commission Dollars Total Commission Dollars
L1 .......You teach 5 5 x $100 $500 x 7% $35 $35/Month
L2 .......Who teach 5 25 x $100 $2500 x 7% $175 $210/Month
L3 .......Who teach 5 125 x $100 $12,500 x 7% $875 $1,085/Month
L4 .......Who teach 5 625 x $100 $62,500 x 7% $4,375 $5,460/Month
L5 .......Who teach 5 3,125 x $100 $312,500 x 7% $21,875 $27,335/Month
L6 .......Who teach 5 15,625 x $100 $1,562,500x3% $46,875 $74,210/Month

Amazing isn't it!! The table above is an example of what can be achieved based on a $100/month personal volume and a network organization staffed with people who have a strong motivation to pursue this as a business. Each Independent Associate's results may vary.

The numbers can get overwhelming but remember, all it is ... is working and developing just five motivated people who then develop five more people ... and so on. But also, by adding consumer sales to the equations in the table above, well, you can see how your commissions are capable of growing quite substantially!

The rest of this page is based upon the example shown above and is presented to demonstrate the functionality of an infinity-based, unilevel compensation plan. Remember that this is only an example. Each person's results will vary according to their company's policies and the amount of dedication they put into their business.

A Compensation Plan

In designing a compensation plan, it is important that the system you use incorporates the following:

  • Low initial cost to get involved
  • Flexible monthly requirements based upon the goals and commitment of the individual.
  • Provides a good supplemental income stream for the part-time Associate.
  • Offers the opportunity for substantial wealth for the full-time networking professional.
  • Encourages downline support and the development of a strong team.
  • A simple and understandable compensation plan.

The following is called the "front-side" of a successful compensation plan.

A Unilevel Compensation Plan
A unilevel plan is very simply structured and easy to understand. A unilevel plan is structured to pay you commission based upon the commitment of you and your marketing/sales organization. As you become responsible for a larger personal volume (PV) in any of the product lines, you earn a greater payout in the form of commissions based upon the total volume of sales in your independent organization.

The first two levels consists of everybody those two people (or married couples and/or corporate entities) you signed on bring in and everybody they bring in. So to explain, say you sign up John Doe and Mary Smith. And John and Mary sign up 10 people. Then those 10 people sign up 10 more people. You earn commissions on the sales of 22 Associates; John Doe and Mary Smith and the 20 people underneath them. Look at the example presented in the chart below.

NOTE: The percentage figures in the chart below are presented as hypothetical examples for this discussion and are not indicative of any payment form for any company. Refer to your own company's policy manual for specific figures.

Network Levels Plan 1

$50/month Personal Volume
Plan 2

$100/month Personal Volume
Fast Start Autoship Bonus Plan

Assuming Your Company Provides and You Maintain a $100/month Personal Product Autoship
Plan 3

$200/month Personal Volume
Supervisor Status

$5,000GV + $200/month Personal Volume
1st Level 5% 5% 25% 5% 5%
2nd Level 5% 5% 5% 5% 5%
3rd Level   12% 5% 12% 12%
4th Level   12% 5% 12% 12%
5th Level     5% 10% 10%
6th Level     5%   10%

You can make your structure as wide as you wish, meaning you can place as many people as you want on each level. You can place John and Mary on their own levels ... level one and two. Or, you can place John and Mary on Level One, leaving Level Two still open to be filled. You can have 1 person on one level or you can have 10 people or more on one level. Regardless of the width of your structure, at a monthly commission qualifying order of $50, you will be paid commissions two levels deep. As you can well imagine, this alone can generate quite a handsome income stream on a monthly basis!

As your organization grows down four levels, you can now qualify for a higher level of commission payout with a $100 per month qualifying product purchase. But remember, your organization has grown to where you are going to be paid back much more than the hundred dollars you spend on a monthly commission qualifying product purchase. When you have four levels, say five people find five more people, who find five more people, and all the new Associates those people bring in . . . your four levels can grow from 25 to 125 to 625 people. There should be no restrictions to your width, so you have a geometric growth pattern to your organizational structure! Imagine the explosive growth that happens when you have all six levels filled!

A Fast Start Autoshipment Bonus Plan

Your system should incorporate an Autoship Bonus Plan. Being on an autoship plan can not only maintain your commission qualification in most cases, but should also pay you a bonus on new Associate sign-ons.

An example is as follows: Anyone that's on an autoship bonus plan at $100 or more per month of product purchase, should receive a bonus payout on each new Associate they sign on; based on the total sales volume amount of each new associate. When you sign on a new associate, you should receive a 25% bonus of their product purchases. You should also receive a 25% bonus on the product purchases of whomever they sign on. This is how a good autoship bonus plan works. At a level of $50 dollars yet under $100 (per month on Autoship), you should receive a 12% autoship bonus. These Autoship bonuses should extend for the first two months of each new associate that signs on within your own network organization.

The Fast Start part of this plan is when you see money coming into your possession for the first two months of signing up each new member to your network!

The following is called the "back-side" of a successful compensation plan.

A Leader's Bonus Plan
A leader's bonus plan can drive much deeper in commission disbursements. A leader's bonus plan should be structured into the following catagories: Supervisor, Manager, Director, Executive Director, and National Director. Each catagory must be representative of the total width and depth your total network marketing organization. As you progress up through each catagory, your organization is growing both wider and deeper in the numbers of individuals that are a part of your organization.

A good parent company uses high-tech automated account tracking computers that automatically keep tabs on each Associate's independent organization. When the tracking system sees that you have qualified for a leader's bonus plan, you are moved up the levels automatically. You should then be paid throughout the width and depth of your network on each person who has also qualified and is now a member of the same leader's bonus plan ... and you are also paid on their entire organizations.

As an Associate, you may have been earning commissions on six levels ... as wide as you wanted to structure your group ... but only six levels deep. Once you become a part of a leader's bonus plan, you are capable of earning commissions throughout the entire width and depth of your organization.

Supervisor Status
The tracking system will now search your organization to see if there is a supervisor beneath you. When it finds a supervisor on one of the branches of your structure, you should be paid a percentage commission that some organizations call an Infinity Bonus, on that entire leg ... regardless of how deep it is ... until it sees the next supervisor in your total organization (more than six levels deep!). The tracking system then creates a database of that entire leg, and some networked systems should pay you down through the first generation supervisor and the second generation supervisor stopping when it reaches the third supervisor. You are paid on each qualifying supervisor's total organization! Look at the example in the chart below.

NOTE: The percentage figures in the chart below are presented as hypothetical examples for this discussion and are not indicative of any payment form for any company. Refer to your own company's policy manual for specific figures.

Generation
Levels
Manager


1 Supervisor Leg
Director


2 Manager Legs

Executive Director


3 Director Legs

National Director


3 Executive
Director Legs

Presidental Director


3 National
Director Legs
1st Generation 2% 2% 2% 2% 2%
2nd Generation   2% 2% 2% 2%
3rd Generation     2% 2% 2%
4th Generation       2% 2%
5th Generation         2%
  • A Manager
Paid on one generation of Supervisors (or more)
  • A Director
Paid on two generations of Managers (or more)
  • An Executive Director
Paid on three generations of Directors (or more)
  • A National Director
Paid on four generations of Directors (or more)
  • A Presidential Director
Paid on five generations of Directors (or more)

Manager Status
The computer tracking system continually tracks and updates the sales of your entire organization. When it sees a supervisor on two separate legs, you should be automatically promoted to the status of manager. The tracking system begins all over again and should pay you down through the next three supervisors. So you now have been paid for the entire structure through three supervisors and their entire networks, and folks, that could be anywhere from 7 levels deep or 70 levels deep, to however many levels may exist in your organization. Can you imagine a commission payout on 70 levels?!

Director Status
Once you have three legs where each leg has a manager, you should be promoted to director status. Your payouts come up through four generations of managers. The system starts tracking at the top of that manager leg and continues to track until it sees the next manager. Every time the tracking systems finds a qualifying manager, you are paid throughout that manager's entire organization. The system will continue to track through each qualifying manager in your organization. For each manager it runs into, it begins paying out commission on Total Group Volume from each leg, from manager to manager through four managers' entire organizations. This goes very deep down the leg of your organization and can conceivably extend 100, 200, 300, or more levels deep!

Executive Director Status
When you have five directors in your organization, you should be automatically moved to executive director status. The system now tracks through each leg through five directors, paying out commissions on the Total Group Volume sales for all Associates, Supervisors, Managers, and Directors down through five generations of directors.

National Director Status
In a good network marketing organization, you achieve a National Director status when your organization has attained at least five first generation Executive Directors. At this point you are being paid commission on every person in every level, throughout the entire width and depth of your organizational structure through five generations of Executive Directors and a percentage commission through the entire organization of the sixth Executive Director!

Think of the possibilities!

 

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