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MLM Residual Income - What a Joke!
The MLM Residual Income Component
As a new MLM Distributor starts to burn out on the initial drive and unlimited list of prospects that has earned them the $300 or more a month for their initial months, the plan must recognize that nobody is an MLM Sponsoring machine and the plan must start to transition to the MLM Residual Income Component.
So just what is MLM Residual Income? Well we believe after years of watching the industry it is actually a little different than most think. The concept that MLM residual income is from getting involved with a single MLM Company, working hard, then having a team big enough to earn you a paycheck for the rest of your life and you do not need to do anything, is a bit of a lie.
We say MLM Residual Income is a Bit of a Lie due to the fact that not unlike normal business, MLM Companies go out of business for all kinds of reasons. Just like your local restaurant, or flower shop that doesn’t make it a year before disappearing, MLM Companies are not magic, they are just business and therefore succumb to the same fate just as often as Non-MLM Businesses. When this happens, your residual income by the definition above is gone.
All is not lost though! For you to have earned MLM residual Income in the first place you would have learned the skills required to build and care for a team. If you have done it right, that team will actually be fiercely loyal to you. So should you be in the unfortunate situation that your MLM Company goes bankrupt, it should be very easy to Transition your team to a new MLM Company. Of course taking a team you have built for a long time with you means you will likely end up one of “those people” written about due to how amazingly fast you built your team to make big money in the new MLM company!
It should take no time at all to get back to the level of income you had, or even more in the new MLM. So it is still a bit like MLM residual income, just not in the way we often imagine it. BIG WARNING!!! Do not take this as advice that switching perfectly good MLM companies for whatever reason you justify yourself is a good thing and leads to the same “MLM Residual Income”. Switching from an MLM Company that has not gone bankrupt is the fastest way to lose all your friends, and your reputation.
The other part of the MLM Residual Income is a Lie concept stems from the fact that any MLM Compensation Plan that allows somebody to build a team once and earn forever without any ongoing effort or maintaining an active number of personals will certainly fail long term. This is for a number of reasons the biggest being the term, “Speed of the Leader”. Should your leadership all go into retirement, then the MLM Members will desire to do the same thing. Sadly the timing of retirement gets shorter and shorter as the members get newer and newer until eventually nobody is doing any work, the company stagnates and eventually just by attrition of people moving, dying, going broke or whatever, your MLM Company is over. Forcing constant activity by way of your commission plan is critical, though unpopular with the normal MLM Junky.
If your MLM Compensation can be promoted as just get in and do nothing and you will get rich, then you are doomed from day 1. Do some work, gain some skills, do an hour a day of work long term and we can all get rich together, the MLM Junkies hate it, and good riddance, you will be a healthy happy MLM Company with this approach.
Now that we understand MLM Residual Income, let’s get back to how it fits into your MLM Compensation Plan design.
Transitioning to the MLM Residual Income Component in your MLM Compensation plan can get a little tricky if you are using the above mentioned method of having all first month order volume avoid the tree in order to do an Initial Income Component. Internetnextstep.com Consulting Ltd. always advises at worst a split scenario where you put some volume into the tree for the upline and use some volume for an Initial Income Component. This tends to make the transition to The MLM Residual Income Component much smoother.
We have seen many MLM Compensation Plans get this wrong and see MLM Members go from 1st month incomes of $500, $1000, $2000 or more to a second month income of $150 or less! This is an MLM member belief destroyer.
The MLM Residual Income Component is generated in the straight MLM Matrix Commissions, or straight MLM Binary Commissions, or straight MLM Unilevel commissions. It can be helpful to have your front line in an MLM Matrix or MLM Unilevel a little higher than the levels below to once again smooth out this transition.
In an MLM Binary Compensation plan, you can help ensure this transition by being careful your “Binary Cycle” can be accomplished by 3 members joining at the “Value Pack” level being the point value needed to trigger cycle or step number 1, and ensuring you do not go to small on your monthly commitment.
The Residual Income Component should build and grow based on ranks so the member is always chasing the next rank to increase their income.
Somewhere around your Middle or Upper Middle rank, you would then start to introduce the Generational or Infinity component.
INS can certainly help to design any MLM compensation plan compensation plan should you need help with yours. We have a generous Share in the risk plan on MLM commission plan design available to all our MLM Software clients.
Contact us today to learn more about INS MLM Software or our other MLM related services or request pricing by Clicking Here.
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