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Guide on network marketing information.

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Knowing Your Marketing Plan

If you are seeking others to join your sales network, be fully familiar with your company's marketing plan, so you can convincingly present the business opportunity. First, study the descriptive material offered by your company, and review additional materials prepared by your sponsor or others working with you in marketing the product line. Know what the commissions and bonuses are on sales by you and others in your sales network, and know if your company has purchase volumes, minimum requirements, breakaway bonuses, or other special payment incentives.

Then work out some scenarios to show what you and your sales group are likely to make, given certain assumptions about your success in recruiting new active distributors and the amount of product moved by each distributor. Sometimes your sales group leader or sponsor may already have developed some projections, but you may have to work out these scenarios yourself.

Due to current postal regulations and various state laws, companies are not permitted to create extended projections, since the authorities have ruled it is misleading to suggest hypothetical earnings. Companies can only show the basic structure of the plan and how these might translate into earnings for a few representative levels. Or they may publish the average earnings of an average distributor. However, if you are dynamic and promote the product line successfully, you will make much more than the conservative estimates and projections now used by MLM companies to comply with the laws.

So think about the possibilities, and write out or review these projections to gain a firmer sense of how you will make money with your product and how much you can make. To avoid any legal problems, don't mail these extended projections to prospective recruits. But you can use them to go over the program with people on a one-on-one basis. Still, be sure to emphasize that any projections are only hypothetical, not necessarily what any particular person will earn.

Some key points to know about your marketing plan include the following:

• What is the commission for direct sales? What are the commissions, bonuses, or overrides at each level?
• What kind of purchase volumes or minimums are necessary each month to get a bonus? to remain an active distributor?
• How many first-line distributors are necessary to get a commission from your group's efforts? (Some companies may require a certain number of people at your first level or require you to recruit one new person a month, sometimes up to a certain number or group size for you to get these performance bonuses.)
• How large must your organization be before you qualify for extra commissions or leadership bonuses?
How much volume must your sales organizations do before the company pays out extra commissions or leadership bonuses?
• How much commission money is the company paying out to its sales force, assuming it pays out commissions to active distributors on all levels?

You may be able to find some of these answers from company literature or from your group leader or sponsor. If not, try to work out the answers yourself. Some answers may not be that easy to find, since some marketing plans are extremely complex and hard to decipher, so you may need a computer to understand what is being paid out to whom. But do what you can to get the full picture.

This way, you not only can give a more knowledgeable, convincing presentation, but you have a better idea of what to do to achieve a certain income goal. (For example, to make $5,000 a month, you realize you need about three hundred distributors in your sales group doing a volume of about $100 a month each.) Also, you better understand how to work with your organization because you know how the payouts for sales are distributed.

Since companies distribute the percentages paid out in commissions and bonuses in very different ways, these differences suggest different ways to proceed. For example, if you are marketing products for a company with a simple 7 percent down five levels plan, the earnings picture is relatively straightforward, and the earnings potential of each distributor for you is about the same. But if your company offers 1 percent on the first level, 55 percent on the second level, and 12 percent, 6 percent, and 5 percent respectively on the third, fourth, and fifth levels, as one company has, this encourages distributors to put new recruits under their first-level sign-ups.

It is also important to understand the marketing plan fully, so you can field questions like: How does the company make money? If the company seems to be paying out too much, people tend to get suspicious, and the company may be on shaky ground eventually, too.

Remember, when a company with a network or MLM sales program is new, it will only be paying out about 25 percent of its compensation plan, since its first distributors are only starting to build their organizations. But as the company grows and its distributor ranks fill out, it starts to pay out more—probably 50 percent by the end of its first six months to a year, and then perhaps 75 to 80 percent or so after that. Since most distributor networks do not fill out completely, the company will generally never make full payouts.

In any event, the company's marketing plan should be realistic, and you should be able to show others how this is so. So work out the percentages to indicate how much your company pays under various conditions, or get this information from your group leader or sponsor. Normally, companies pay out about 55 to 60 percent to their sales force, and if the company appears to be paying any more or less, you should be able to explain this.

Finally, be able to answer questions about how the company's marketing plan complies with local and federal laws that affect multi-level marketing. You want to be able to assure people knowledgeably that the plan is reasonable and legitimate.

 

 

 

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TITLE: Network Marketing

Network Marketing Category: Network Marketing

Shopping Mall: Network Marketing

Network Marketing Topics: Network Marketing