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Personal Account System

Permalink 04/21/04 14:50, by admin, Categories: MLM Software, Members Back Office, Features

Link: http://www.internetnextstep.com/mlm_software.htm

So just what advantages are there for using a Personal Account system for your MLM company? What exactly is a Persnal Account system?


Personal account system is a way of operating your company that is a bit different than traditional software methods.


A personal account is like an online bank account that each of your members gets when they join. Instead of you paying people by pay check every week or every month, you put the funds into their personal account. The member can request a payment any time they like from their members lounge.


Just to keep all members happy, a member can also set their settings to get a check every month or every week if they prefer. There are many options available in our software like allowing the member to ask for a paycheck anytime their account balance exceeds a certain amount (for examplt $100). They can also request that enough to cover their next months autoship be left behind so they don't need to have their credit card billed.


So just what advantages does this type of system have to your members and to your company?


First lets look at the members. Very often members don't like their credit card being billed each month. This system allows them to pay for their autoship out of their earnings. Also, very often members don't like being charged the check fee of $3 or $5 on a very small check. This system allows them to save this fee and amalgamate a few months of earnings in the beginning and get one big check or paypal payment saving themselves fees.


Some features of our advanced software allow you to use Gift Certificates and Inter Member transfers to have your members further capitalize on this personal account system. More on that another day!


Now, lets take a look at the advantages to the company.


First and foremost is the chargebacks that become impossible for a member to do. We all know how much of a pain chargebacks are. The average chargeback costs a company about 1 hour to chase down and defend. Even if you won each and every chargeback battle, you are still losing an hour of an employees time, and often it is an expensive employees time. So lets say you process 1000 orders per month and you have a 1% chargeback rate. This would be 10 chargebacks or 10 hours of wasted labour. Your internal cost of an employee if you are doing 1000 members a month is probably around $50 per hour, so that would cost you $500!! Lets say you are exceptional and only have 1/2 of 1% chargebacks, that is still a $250 loss to your company. Imagine if you did 10,000 shipments a month!


Secondly, the visa discount fee. Usually around 3% if you are a regular offline product driven company, but up to 6% or more if you are online with virtual products. Lets say you do the same 1000 orders and 10% opt for the personal account system of having autoship payed for from that account. If your monthly orders are $70 each, then that is $70 x 3% = $2.10 x 100 = $210!


So as a percentage of sales it is only .3% but that is .3% off your bottom line. If you are 10% profitable, that means on 1000 orders of $70 = $70,000 in sales x 10% profit = $7,000 in profit.


If we now look at you chargeback costs as a percentage of profits we get $500/$7000 = 7% of your profits!
The discount rate savings as a percentage of profits would be $210/7000 = 3%


So buy utilizing the personal account system instead of the regular sending of checks every month system, on chargeback savings and credit card discount rate savings alone, you profits would be 10% higher.


Just think, we haven't even taken into account all the money you would save by not sending out the checks and paying the fees your bank may or may not charge you for the cashing of all the checks. Not to mention how much easier your bank reconciliation would be for your accountant each month.


Go a step further, say 1000 people leave $50 in their accounts waiting for their accounts to get big enough to get a check, that is a $50,000 float you could have in a money market fund earning you a few percent! Even at 2% that would be about $83 a month of money you just generated out of thin air!! If you had 20,000 members who did that same, just imagine how big that number would be! $1666.66 per MONTH!!!!!!


I think you can see, the personal account system can both save you money, and actually Make you Money!


Wait till you see how we can make it even better by introducing Gift Certificates and Inter Member Transfers!



Contact us today to learn more about INS MLM Software or our other MLM related services or request pricing by Clicking Here.

Internetnextstep.com Consulting Ltd.
http://www.internetnextstep.com
Your MLM Software, MLM Consulting, and MLM Commission Plan Design Experts

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