Welcome
to our complimentary MLM Friends Platinum Club Advanced Thinking
MLM Tips Sheets.
Tip
Sheet One: How to Calculate Residual Income
The
most important asset that we Network Marketers have is each
other. We need each other to build the Teams necessary to generate
the revenue from which our income is paid.
Assuming
that the product costs are $100 per month, every distributor
in your growing downline pays $100 to receive their beneficial
product.
In this example, we'll assume that the commission breaks down
is as follows:
Level
1: 5% or $5
Level
2: 25% or $25
Level
3: 10% or $10
Level
4: 3% or $3
Level
5: 6% or $6
Level
6: 9% or $9
Level
7: 12% or $12
Now
let's assume that you sponsor three people personally, and then
showed those people how to do the same. Let's assume that each
of the three people you enrolled also enrolled three people
of their own, who in turn enrolled three people, all the way
through your 7 levels.
If
this happens then you can see the amount of revenue and income
generated would be as follows (assuming you meet any other commission
criteria):
You-
(figures exclude your contribution)
Level
1: 3 people, $5 each = $15 = cumulative income $15 (revenue
$300)
Level
2: 9 people, $25 each = $225 = cumulative income $240 (revenue
$1,200)
Level
3: 27 people, $10 each = $270 = cumulative income $510 (revenue
$3,900)
Level
4: 81 people, $3 each = $243 = cumulative income $753 (revenue
$12,000)
Level
5: 243 people, $6 each = $1,458 = cumulative income $2,211
(revenue $36,300)
Level
6: 729 people, $9 each = $6,561 = cumulative income $8772
(revenue $109,200)
Level
7: 2,187 people, $12 each = $26,244 = cumulative income $35016
(revenue $1200)
Total
in organization: 3,279, Total monthly income = $35,016, (revenue
$327,900)
OK
then.
You
want to earn $500 a month, so based on this Compensation Plan
you would need to have a downline of 39 people who each spend
$100 on product EVERY MONTH.
Your
Group would generate $3,900 revenue and you would be paid a
commission of $510 or 12.8%.
Now
you want to earn $2,000 a month, so based on this Compensation
Plan you would need to have a downline of 606 people who
each spend $100 on product EVERY MONTH. Your Group would generate
$60,600 revenue and you would be paid a commission of $2,211
or 3.6%.
Lastly,
you want to earn the big money $35,000 a month, so again
based on this Compensation Plan you would need to have
a downline of 3,279 people who each spend $100 on product EVERY
MONTH. Your Group would generate $327,900 revenue and you would
be paid a commission of $35,016 or 10.6%.
The
BIG Questions
The
key questions you need to ask yourself now are:
Which
product could satisfy each of my Downline over the long term
e.g. cost, benefits, performance?
How
soon would it take me to build this Organisation?
What's
in it for my downline apart from the product e.g. how soon
could they earn a similar amount?
What
would it take for all of these 3,279 people to see value in
joining?
How
can I quickly develop such a Team?
What
would 3,279 people need to think like to join my Downline?
Now
clearly, if you want to earn $2,000 a month, it wouldn't be
unreasonable to expect the 606 people in your downline to benefit
in the same way, would it?
In
which case, you would need to consider how to develop a Team
of 606 people x 606 people, which = 367,236 people in total.
Mmm?
Food
for thought?
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