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A Internetwork Marketing Income PrimerTo make a substantial internetwork marketing income understanding the MLM compensation model is only half of the equation. The key to success is knowing how to capitalize on it regardless of the specific MLM opportunity you get involved in.However the genius of MLM is in the compensation strategy. When Rich DeVos and Jay VanAndel, of Amway, developed the MLM concept they created an opportunity that allows individuals to become Independent Business Owners retailing products and earning income recruiting others to do the same. Your internetwork marketing income will reflect your effectiveness in these two areas. It is probably best if we illustrate how this works. When many hear of Network Marketing (internetwork marketing) they immediately think of the words pyramid scheme. Okay this may be a bit of an overstatement but many make this mental association. Although it is true that there is a pyramidal structure found in this business model this ultimately turns out to be simply semantics or at the very least irrelevant as the pyramid is simply a symbolic representation of reality. Is it not? However it does warrant conversation. It should be noted that pyramid schemes are illegal so what is the difference? MLM is the legitimate business structure utilized by many of the biggest businesses in the world including BeachBody, Gillette, Coca Cola, MCI, Sprint, Xerox, IBM, Texas Instruments, General Motors, General Electric, Toyota etc... The pyramid scheme was an investment scam created to mimic MLM. It was actually MLM organizations that initially petitioned the government to pass laws against the pyramid scheme.
As mentioned you make money in two primary ways. You make money from the retail mark-up from the sales on the products or services your MLM produces. You also earn income by recruiting others to do the same by earning a portion of their retail sales as well. Independent Business Owner (IBO) Let’s say you are IBO “A” and you are brand new to the industry. You are able to bring two new people into the organization and each of them is able to do the same. This is your down-line and your team. Remember that it is your accountability to not only recruit but to train new IBO’s so they can be successful. So now you have shown those you have brought into the organization your methods and they are now teaching them to others. Okay, now just for illustrative purposes I am going to outline a theoretic compensation plan and the financial results you will now have on a team four layers deep. Let’s say you earn a 50% commission on everything you sell. This is usually factored behind the scenes and you would end up receiving 100% of your retail markup. (Hope that made sense) In this example however you then make 50% commission on your own, 25% commission on those you directly brought aboard, 15% on those they did and 10% on the fourth tier below you. For illustrative purposes you each make $500 in sales as you are all about the same skill level, recruit effectiveness is the same, sales effectiveness etc… Okay. So you made $250 off of your $500 worth of sales. But because you worked and trained two people who are also bringing in $500 in sales you now made an extra $300. When you add up your entire down-line’s sales your internetwork marketing income is $1250.00.
You will earn based on your ability to find and recruit others. If you brought more people into the business you would be compensated accordingly positively impacting your network marketing income. You are also compensated based on your ability to sell the products or services your MLM business is retailing. Additionally your compensation is directly impacted by your ability to train those in your down-line to do the same. But this is not what is truly impressive about this model! Imagine now IBOA has top talent IBO “F” within their organization. IBOF is twice as productive in getting team members to work with them and twice as effective as IBOA in sales as well. To keep the examples equal and in order not to exaggerate or make misleading generalizations I am going to add a couple factors here. First I am going to include a little attrition into the mix as it is much more realistic to acknowledge that not everyone who gets involved will stay involved. IBOA has now lost a team member however I have kept IBOA’s team data in tact with the inclusion of IBOH and IBOF’s productivity gain. (See Chart) Again I did not want to exaggerate IBOF’s internetwork marketing income so I included a diminishing recruiting effectiveness into IBOF’s team. IBOF brings four individuals into their down-line, each bringing four on as well. However we lose four due to attrition and each of the remaining only brings two on each. This is because the further down line of IBOF the less IBOF is able to coach and train and something is being lost in the translation. Okay now to hit IBOF one last time I am going to also include lost sales productivity in their down-line as well. (chart explains it all!) Even with all this real-world limitations IBOF’s internetwork marketing income is $4500.
Because IBO F is making more than IBO A two tiers ABOVE. Does this happen in corporate America? This compensation model truly reflects an individual’s performance and their ability to translate their knowledge and skill-set to others. Your internetwork marketing income potential is only limited by your own ability to make retail sales and help others do the same. The problem is that most that get involved with MLM do not know how to do this effectively. To make income in MLM you will need to know how to accomplish this goal. If you were to develop a strategy that was able to help your down-line succeed that would be a powerful thing. Utilizing the technology at your disposal can help you do just that. Understanding how to capitalize on it is your key to success in the MLM business. From Internetwork Marketing Income to MLM Opportunity 
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