How To Make Money In MLM: Do The Math
Topics: mlm, network marketing, recruiting, downline, make money in mlm, mlm training, mlm trainer
MLM, or network marketing, is still one of the best business opportunities available, hands down. Someone with very little money and education can generate a 6 or even +7-figure income, if they know what they’re doing. Unfortunately, most have no clue and buy into the hype of quickly making Millions by simply recruiting 3 who find 3. These numbers simply don’t work that way.
So, let’s make sure we’re on the same page together.
I’ll start with the bad news.
Statistically, you have a 99% chance of failing to make money in MLM and network marketing. Less than 2% ever earn more than an average of $110 per year, while shelling out thousands of dollars in credit card debt on product samples, fliers, CD’s, DVD’s, company web sites, traveling to conferences, etc.
Only the top 1% ever earn enough to actually quit their jobs and survive. And, while everybody gets excited talking about how they’re going to be making 7 and 8-figure incomes, only the top .8% ever reach these levels (yes, that’s point eight percent).
By law, MLM companies have to disclose this information to you now, but these numbers don’t change much from one MLM company to the next.
Despite these odds, making 6-figures your first year is, actually, very realistic.
While there are many components to successfully marketing your business, you must first step back and look at the simple mathematics of building a downline that will create the level of income you desire in a realistic timeframe to see if it’s even feasible for you based on your marketing abilities.
Let’s say you believe you can beat the odds. After all, everyone knows statistics can easily be manipulated to prove anything. Besides, you’re not going to allow yourself to fail.
Good for you!
Then, let’s run the numbers.
Most people would like to retire with at least $1 Million annual income. So, we’ll use $1 Million to keep things simple and conservative. If you want, say, $2 Million, then just double everything here.
Many MLM companies like to say you can retire in about 5 years of working hard. I agree …if you know what you’re doing and are in the top .8% (that’s point eight).
The math gets a little sticky here because products and services vary widely from one MLM company to the next, as well as the pricing, pay plans, bonuses, etc. However, using a “loose” industry average, each person typically earns from around $15 to $40 in monthly residual income from each distributor in their downline. You may plug in a number that you think fits your pay plan best.
For our example, we’ll just use $40 per month because it’s on the high end (to try to make things look good).
So, for each distributor in your downline, we’ll say you will earn an average of $40 per month, every month, forever and ever (even though this is never reality, but we’re being super optimistic).
To earn $1 Million a year, you must have about 2085 distributors in your downline. (Of course, if you want $2 Million, go ahead and double it, and so forth.)
If you want to retire in 5 years, you must recruit around 417 new people per year, or about 8 new people per week.
You must recruit 1 new person a day, every single day, (and 2 on Saturdays) for the next 5 years, 365 days a year, with no vacation, no time off, no breaks, nadda.
And, that’s assuming 100% of the people that come in never drop out (considering the “real” average drop-out rate is somewhere around 50%, this is completely impossible …but, remember, we’re being super optimistic here).
Even if 100% of every person you talked to signed up (which will never happen) and paid in full, and ordered every month, forever and ever, and never quit…
….is it even possible to recruit 1 new person every single day using “warm-marketing” techniques of talking to people in person or dragging them to your home parties or hotel meetings?
Plus, realistically, you’ll probably have to talk to at least 10 people to get 1 person to say yes and sign up… every single day for the next 5 years.
Not to mention, since the average drop-out rate is around 50%, for every 1 that drops out, you’ll have to recruit 2.
Therefore, you must give a presentation to at least 20 new people …every single DAY… for the next 5 years to barely hit your minimum goal of $1 Million annual income.
Is this even possible? In 10 years? 20…?
Even on the ’super optimistic’ high end?
Now, you’re probably sharp enough to think, “But, wait a minute, Mike. What about my downline recruiting? Won’t I come across some superstars with those numbers?
Good thinking, and, yes, you might get lucky to find a real superstar. However, there’s only one in about 1250 people, statistically. So, you’re going to have to recruit 1250 people before you get lucky to find your superstar.
‘Hope’ and ‘might’ and ‘luck’ are not sound ways to create a business model and base the rest of your financial life (and retirement).
You need to make sure that the business model you’re working is something you can actually do and leverage a skilled mentor or trainer who can teach you how to put the numbers in your favor.
Doing the math when joining an MLM company will help you get a clearer perspective on exactly how many people you need to bring in to achieve your goal. Then, you can set your sights on a game plan to reach that goal in a realistic time.
Most never do this, and, probably nobody in your MLM company has illustrated this to you before now.
Nevertheless, lots of people are making great incomes using this business model. If you’re not, you need to find someone in this industry who can train you how to put these numbers in your favor.
Here’s to your success… in numbers.
Mike Lewitz is a certified International Marketer who teaches marketing to an international organization of over 6000 entrepreneurs, including people in MLM and Network Marketing.
You can learn more about Mike Lewitz and how to grow your MLM business: www.mlmultrasecrets.com
Previous Articles Highlighter:
Commodities Trading Software - Use Specialized Software To Practice Commodities Trading (1)
Visit his website www.Trading-Masters.com and download his FREE Trading Report and learn some amazing Trading tips for FREE. His tips would save you thousands and make you better at trading!
Moldy Fabric Cleaning Methods Revealed (2)
It is important that you also purchase a vacuum cleaner that has a HEPA filter in it in order to accommodate a mold free home. If you use this vacuum and its brush attachments to gather up all of the mold and its consequential spores, the filter will prevent these spores from being re-released.
Choosing The Right Pet (3)
The pet adoption process might have a great deal of influence on the type of pet that is approved for adoption. Some animal control agencies have certain requirements that must be met in order for the adoption to be approved.
How To Find Good Stocks That Will Survive 2008 Market Crash (4)
This ratio is critical during recession as the interest rate will increase substantially that time. Although Federal Reserve maintains the interest rate recently, there is no guarantee it will be the same in 2008.
Getting The Best Dental Billing Software (5)
This feature can actually help a patient in cutting down his investment, if the health issue is not that critical or can be postponed until he gets a cover for that risk as well.
Playing Tennis To Make New Friends (6)
Making new friends at a tennis center is a very easy thing to do. Every tennis game is bound to have spectators and that crowd of people might have someone in it that enjoys playing the game of tennis just as much as the people that are out on the court.
How To Play Bingo Games Online (7)
What this means of course, is that you have virtually no learning curve when you play online! Let's face it, having to figure out how to play a game with complicated graphics and innumerable buttons to press can be rather stressful.
Real Estate For Your New Home (8)
The city is convenient, but it has its crowds and problems. The country is beautiful and relaxing, but it's far away from the city's conveniences. Luckily, there are the suburbs.
Why Some Internet Marketers Never Get Ahead (9)
However, those who always look for the quick dollar will ultimately shoot themselves in the foot, as it results in short term cash, and it never builds any long-term wealth.
Ensuring Safety While Shopping Online (10)
It is important that you know every detail and every charge that you have to pay for your product purchase less you be surprised upon getting an unexpected tall bill.
Newer Articles Highlighter:
Some Of The Reasons Some Car Lovers Join A Collectors Car Club (1)
A person who knows everything in the organization and about it will more then likely have more then one type of awesome car. They might have a few different ones that they drive everyday just to give more examples to the newer car club members.
Be Wise Like An Owl In Choosing Your Breakthrough Directions (2)
During the day when all the other birds are busy competing with one another, owls enjoy a nice snooze. As a result, owls always eat well. I want you to be wise in the same way by picking the right time and place to pursue your breakthroughs.
Online Forex - The Unlimited Possibilities Of Online Forex (3)
Money has evolved through many different stages in the past. From the first silver traded as to the first uses of paper invoices and receipts, the journey of exchange modes has been a long one.
Futures Trading Commodities Charts - 4 Different Kinds Of Futures Trading Commodities Charts Used (4)
It can therefore be called a time series plot as well. When we are talking about futures commodity graphs, the y axis would represent price changes and the x axis would represent the time intervals on which the changes are noted.
Corporate Outings Increase Morale (5)
The latter is perhaps the most complicated factor to measure and maintain as so many unforeseeable influences can cause extreme unpredictability in any given employee's level of job satisfaction. When considering your corporation's level of team orientation, keep in mind that hundreds of studies have been performed which all conclusively show that a company's level of team cohesiveness is directly related to the performance of a company.
Tour The Spas Of Germany (6)
Bavaria possesses some of the best spas in Europe and it is well worth hiring a car and visiting some of them. Treatments such as pine forest mud baths, deep breathing salt chambers and milk and honey baths ensure you will be feeling and looking your best by the end of your stay.
Get Your Car To Run That Extra Mile (7)
At least, ask if someone wants to share a ride if you are just headed one place and then back. Remember, how you drive your car, and how its fluids, old parts, and tires are disposed of all affect the environment.
Stock Trading Software -Using The Right Stock Trading Software Can Transform Your Trading Experience (8)
However it is vital that you monitor the activity from time to time since it is your money at stake. Abhishek has an uncanny insight into Trading! Visit his website www.Trading-Masters.com and download his FREE Trading Report and learn some amazing Trading tips for FREE.
How To Get The Most Out Of Your Blog Post (9)
Blogs have become very popular throughout the last few years and the number of blogs that are published on the Internet each year continues to increase at a quick rate of speed.
Online Savings Provided By Credit Cards (10)
Some of those bargains that people find online are online savings offered through the point earning portals for credit card offers that are much better than the ones that they currently have in their wallets.