MLM vs. Direct Sales: How Would You Rather Get Paid?
If you are in MLM and haven’t seen Mike Dillard’s famous (or in some MLM circles, infamous) Coffee House Letter yet, you should definitely take a look. You may not agree with it all, but Mike definitely makes some valid points.
The Coffee House Letter has drawn some controversy from MLM loyalists. I read one blog post yesterday from someone who was incensed over Mike’s letter. His main argument was that MLM is stronger than ever, and the key to building a strong downline is in building relationships with your team.
I don’t think anyone can or would argue this point about building strong relationships, and it wasn’t the focus of Mike Dillard’s letter. Rather, it was the concept of residual income versus getting paid first (or GPT, as in Getting Paid Today).
I have been in both business models, so I think I can speak on this with some level of expertise.
During my MLM experience, it took us months to build a downline where we were receiving a decent residual income each month. And truth be told, over half of that income came from one consultant.
One month, this consultant just disappeared, apparently moving to another opportunity. This was exactly the scenario that Mike Dillard painted in his Coffee House Letter, and it was devastating to our team.
We are currently involved in a Direct Sales opportunity where the commission structure is much like that of the mortgage and real estate industries. Our main commission flow each month is from the direct sales of our company’s products, and we get paid UP FRONT for these sales.
There is also a one-level residual income built into this commission structure, giving us both direct and residual income each month.
The best part of this commission structure is that we get paid today, not waiting for residual income to build up. And we don’t worry about someone leaving our organization for another opportunity. If someone does leave (and this doesn’t happen often), we have already received the commission on his main product purchase(s) to gain entry into the program. If we lose the residual income from this person, it will sting but not be a major hit on our monthly income.
There are merits to both the MLM and Direct Sales business structures, but having experienced both and given today’s unstable economy, I would much rather get paid upfront, today rather than wait for residual income to build.
What do you think?
To your success!
Bob Clarke
November 11, 2008; Cresskill, NJ
MLM Success: Make the Effort to Attend a Live Event
I’ve heard it stated that those people who attend their MLM or direct sales company’s live events have a significantly higher chance at succeeding than those that don’t attend.
Why would this be true?
I just returned from the Second Live Marketing Event in Dallas, Texas sponsored by Carbon Copy PRO Marketing. I’ve already reviewed the event in a recent post, but today I’d like to get more into the mindset of attending live events.
What do you get at a Live Event that you can’t get sitting behind your computer?
- Informational trainings and company updates
- The ability to put faces to names of those you have become familiar with in your company
- The chance to form friendships and brainstorm with people in your company
- Many times there will be promotional discounts on company materials
- Time away from the drudgery of every day life and, usually a renewed drive to work your business.
These are all great advantages to attending a live event, but I’m not sure they can explain why people who attend these events go on to success at higher rates than those that do not.
I believe that it is not the attendance at the Live Event per se that subsequently drives a person’s success in their business, but rather something far more basic.
I believe it has more to do with a person’s mindset and drive.
This is a person who understands the importance of self improvement, education, and training in building their business empire.
This is a person who understands that no man (or woman) is an island, that we need to work with others to really make our business thrive.
This is a person who does not hesitate to spend money to advance their business.
For all the above reasons, I believe it is not the attendance at the live event that makes the difference between successful and unsuccessful home business owners.
It is the intent and willingness, the mindset if you will, of the person to take their business to the next level by attending an event that really matters.
The event might be fantastic, with exceptional training and full of “golden nuggets” of information to take home, like the Carbon Copy PRO Marketing Event I just attended.
Or the live event might be lacking in substance, a little boring even….. it matters little.
What truly matters is the EFFORT you took to attend.
This is what distinguishes those that succeed and those that don’t in the MLM and Direct Sales business arena.
Free MLM Home Business Opportunities?
My parents always told me that nothing is for free. Nothing comes without a price.
How right they were, especially when talking about MLM home business opportunties.
This blog is about TRUTHS, so here’s one for you:
THERE’S NO SUCH THING AS A FREE LUNCH!
How does this relate to Network Marketing and MLM? Plenty.
I hear from those “interested” in starting a home business all the time….
When will I start making money. I need to make XX dollars in a month right away. Oh, and by the way, I have no money to start and advertise.
Well, here’s what I have to say to that — PLAY THE LOTTERY OR SELL A KIDNEY.
Nothing is for free in Network Marketing.
What people don’t understand is that in just about every opportunity I have ever researched, there is a baseline entry price, the lowest price you can pay to get into the business, but to make the REAL money, you need to “buy up”.
In other words, you need to put down more money to get to a higher compensation level so that you can get the higher payouts when you make a sale.
This is how the BIG MONEY is made in MLM and direct sales.
So, sure you can start your business with as little as $100 in some companies, but you won’t make much money at that level. What they don’t tell you is that you need to shell out another $1000-2000 to get to the next compensation level.
And that’s fair — but people act surprised.
It takes money to make money. Or something as valuable as money.
Take the case of free leads in advertising. Is there such a thing?
Well, it’s true you can get free leads by putting up videos on YouTube, writing Squidoo lenses or HubPages, or authoring articles. But unless you know what you’re doing, you won’t get many leads.
Why? Because you need to have the training to do these things well. How do you get the proper training?
Not the training you get on YouTube. I’m talking about learning from people who have had real success using these Web 2.0 marketing methods.
You get that kind of training with money. Nothing free about that.
Rosemary and I learned how to generate our own FREE LEADS by training with the brilliant Dennis Karganilla and Jimmy Davis of MLM Goldmine. I mean, these guys could make your head spin with their knowledge of Web 2.0.
We payed out money gladly, because we knew that it would pay for itself several times over. And it will.
But the point I’m making is that it costs money to get the training we wanted to become really proficient at generating our own free leads.
Nothing is for free.
Don’t expect it, and you won’t be disappointed.
This is the truth.
Until next time,
Dr. Bob Clarke
September 25, 2008; Cresskill, NJ
LIVE COMMENTS
Latest on Thu, 03:08: Mary.. let me know my error... let's discuss!
: I think, that you commit an error. Let's discuss. Write to me in PM, we will communicate.
: Sweet blog. I never know what I am going to come across next. I think you should do more posting as you have some pretty [...]
: Hey doc, right on! Need more people like you on the planet
: I was just introduced to your site through CCPro Forum. My initial question - how should one define "TRUTH"? (I love word-studies and that's a [...]
-
"