Top 4 Tips To Quickly Evaluate Compensation Plans So You Can Live Your Dreams Even Faster

When speaking to groups of people, I’ve often commented on how tragic it is, that there exists no school or class you can attend, to find out what to look for & what to stay away from in a home business opportunity.   

This checklist is meant to change that for you, so you can avoid wasting many months, & even years building your dreams with the wrong vehicle.

Tip 1:  Skip the percentages & find out what the commissions are in REAL dollar amounts.  

Unfortunately, companies like to explain their commission payout rates in terms that no normal human being can understand.

They speak in terms of product volume, commission percentage per level, ambassador bonuses, etc.   

I believe this is one of the reasons I struggled to make money in network marketing for 5 years.   

I thought all the ‘what if’ scenarios & big percentages sounded appealing without know what what any of it meant to my bank account.

There is one question you must ask that cuts through ALL of the Gibberish, fast.

How much money, per customer/distributor do I earn on on a monthly basis for those who stay active on my team?

When someone says… Oh… well you earn 7% of their product volume.

You  want to ask them, “In dollars —>  What does that mean?”

Once you have this number, you can then do some calculating as to what is going to have to happen to bring in your desired monthly income.

Without this number, you are making all your decisions based on hype, smoke & mirrors.

For example, if the compensation plan pays $4.00 monthly residual income and your goal is $10,000 a month, 

… you can instantly see that you’ll have to build a team of 2,500 people to hit your goal.

Boiling down the comp plan to an actual – per person dollar amount – allows you to see, in reality, what is going to have to happen for your dreams to become reality.

It also allows you to compare apples to apples without all the B.S. that companies sometimes try to throw at you in comp plans that are harder to understand than the US Tax code.  🙂

Tip 2:  Find out if there are any quotas in the comp plan.  

I don’t about you you, but I got into this business to be free.

I imagine that’s why most people decide to start a home business.   

That’s why, it really ruffles my feathers, when I see companies put all sorts of ongoing production requirements on their reps, so they can qualify for commissions that they brought to the company.

For example.

One of my friends, a top leaders in the profession, built a $15,000 income in a very well-known and respected network marketing company. 

Little did he know, that in their policies & procedures, ongoing monthly personal enrollments were required to collect your full residual income check.   

He called me, one day, absolutely beside himself, because the company had sent him a check for $250.

They reasoned, that because he hadn’t produced his required monthly enrollments, they had the right to cap his check at the $250 amount.

Trust me.

If you’re going to invest your precious time building a passive income from home, you wanna know about these sorts of requirements before you build a big team.

Fortunately, there are companies out there who still believe in freedom and choose not to handcuff their reps with these types of shenanigans.

Tip 3:  Find out how realistic it is for you to hit your income goals, even if no one else produces.  

One of the shocking realities I eventually woke up to, in my home based business, was that hypothetical growth charts, shared in most network marketing presentations, were just not gonna happen.

You know, when they tell you that all you need is 2, who get 2, who get 2… and in 12 months, you’ll be making $40,000 a month?

Yeah right.

There’s this little thing called the Pareto principle – also known as the 80/20 rule, which says that typically (for whatever reason),

…20% of the people are gonna do 80% of the work.

On the flip side, 80% of the people are not going to do anything.

If that’s true, (after 10 years in home business I can say that in my experience, it is)…

You do not want to be in comp plan that requires everyone to produce in order for you to hit your income goals.

I highly recommend working in compensation structures that allow you to hit your income goals even if nobody else produces.

Funny thing about this particular point.

When started using this one idea in my business, I began to have more duplication than EVER before.

Probably because because my team could see that their income, really was in their hands, so they went to work and made it happen.

In any case, I made more money than ever and so did my team.

Tip 4:  Be sure your compensation plan allows for higher value – higher commissions sales.  

Now, this can be an extension to tip #3 but not necessarily.

I was in a comp plan that satisfied tip #3 and did NOT have higher value – higher commissions sales.

However, if your plan includes this feature, it will likely satisfy Tip 3 and 4 at the same time.

Because of the reality that lots of people will not take the business as seriously as you.

AND, because, unfortunately, many people will choose not to finish what they started and drop out…

It’s imperative that you make sure you’re getting paid well for your efforts now, versus hoping & praying that the countless hours you may spend with a new team members, might pay out over the next 2-3 years as they stay active on your auto-ship.   

There was a groundbreaking report written on this exact topic several years ago, (I can get you a copy if you like),

… that really exposed this idea for what it is.

The safe path to home business wealth.

If you’re banking on $2 – $6 residuals, to add up over time, you’re gambling with your future and gambling in a BIG way for too many reasons to list here.

Not only that, but I’ve found that when a team member comes on board, and actually invests more than $40 or $50 to get started, they are a lot more likely to take their business seriously & stick around for the long haul.

These are the types of people you want to work with & invest your time in, trust me.

The truth is, higher value, higher commissions product sales are better for everyone involved.

Nowadays, the most progressive compensation plans have a combination of strong monthly residuals AND high value / high commission 1 time sales.   

Like T. Harv Eker says in his book “Secrets Of The Millionaire Mind”,

… “Wealthy people say, I’ll have both.”

In other words, we can have our cake and eat it too.

🙂

So, to recap….

Here are the 4 top tips to quickly evaluating MLM compensation plans & cutting through all the B.S.

• Tip 1:  Skip the percentages & find out what the commissions are in REAL dollar amounts.

• Tip 2:  Find out if there are any quotas in the comp plan.

• Tip 3:  Find out how realistic it is for you to hit your income goals, even if no one else produces.

• Tip 4:  Be sure your compensation plan allows for higher value – higher commissions sales.   

Do you have other experiences or insights relating to network marketing compensation plans?  Would love to hear below.