Behind the Commissions, the MLM Parent Company
New MLM business opportunities are starting every day. With so much competition they have to garner people's attention, and one way to do this is by offering 100% commissions. Needless to say there are many options to choose from when looking for an MLM business opportunity and the attractiveness of 100% commissions will attract many people. The question becomes will it get those same people in trouble down the road?
In order to protect yourself, your time and your hard earned money, before you sign up with the new MLM business opportunity, you must do your homework. You must understand what the is behind the 100% commissions and you have to understand what other substance the MLM business opportunity has.
Standard Business Practice
For any successful company they must make a profit. That is not something that is debatable. Make money, and you survive. Loss money and when the money runs out, the doors of your company will close. Based on this all companies need to have a profit and positive cash flow.
This money is used to run the company. That is an obvious fact, but we stated it this way because many people lose sight of that when they are enticed with 100 percent commissions. The idea of receiving 100% of the revenue generated from a sale does not provide anything for the parent company itself. So the question then becomes, what does the company use to run the day to day operations?
There are very few single product companies that have success long term. This are even less MLM companies that survive long term based on just one product alone. It bears to reason that a company can have huge success when they launch a product, but to sustain their success and market share, they must bring new products to market over time.
This can be even more powerful when an MLM company launches a product that is brand new and revolutionary. Regardless of the product, it will only last for a finite amount of time. With any product that is in high demand, competition will eventually creep in and create similar products to share the market place. There will even be imitators will not want to compete with you, but simply steal away customers for short term gains by creating copies of your products, albeit it is illegal, but by the time the dust settles in the courtroom, the damage is done as your customers are confused about what is the legit product and what is the knock-off. Last but not least there can even be a case made that some products will only be relevant for a certain period of time.
Regardless of what will change on the product or introduction of new products, what does this have to do with 100 percent commissions in MLM?
The simple fact is this; if there is no money being paid to the company there cannot any way to fund product development. In addition to lacking product development, there is nothing for market research indicating to the MLM company how their product is being received, what additional items their customers would like, and where growth potential is for the company.
What this will mean for an individual in a MLM business opportunity is that once the product life runs out, so will your business. Regardless of the size of the size of your business, you will have to rebuild it with another company starting from ground zero.
MLM Membership Fees
As already discussed, a parent MLM company needs to have a positive cash flow to run the company. If the compensation plan is structured such that the distributors are receiving 100% commissions, the money that is needed to keep the company in business has to come from its distributor base.
These fees can be collected in many creative ways, everything from monthly activation fees to processing fees on your commission checks. The bottom line is that you the distributor will have to pay the fees if you want to continue in the MLM opportunity.
This may not be a terrible thing to have to do. After all you are making money and living the lifestyle that you want to, so what if you have to pay some small fees, that's the price you pay right? Where it becomes a problem is when the fees start to climb and your cheques get substantially smaller because more and more is being taken. Make sure to completely understand what, if any, fees you will have to pay in your MLM business opportunity. This applies to any MLM opportunity, not just those promoting 100% commissions.
Right MLM Opportunity for You
After all the sizzle and videos, after all the presentations the MLM business has to be right for you. You are the one that will have to invest your money to get started, and you are the one that will have to build your MLM business. Doing your homework is vital to protecting yourself.
Look at the entire MLM business opportunity, not just at the tag line of 100% commissions. There has to be much more than 100% commissions to make it a viable business opportunity and it is up to you to ask questions. Ask about the company's history, the products, and what expansion the MLM opportunity is experiencing. These simple questions on these three items will show you much more of the MLM company behind the opportunity that you are looking to get started with.
*Examples in these materials are not to be interpreted as a promise or guarantee of earnings. Earning potential is entirely dependant on the person using the products, ideas, techniques and efforts put forth on Engineered Lifestyles. For our full earnings disclaimer click here.
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