What does it take to make your money back?
Do you know what it takes to make your money back in your MLM enterprise?
Last night this lady named Lisa was spamming Facebook about a new MLM company called “Efusjon”.
When I commented that I didn’t like the company she wrote back to me that Send Out Cards wasn’t good enough for her. She wasn’t making enough money. So she had gone and joined this new company. (She’s working multiple companies at once which I also disagree with.)
Efusjon looks interesting. They make an “acai energy drink”. So instead of juice they combine acai to make energy drinks. That’s a good idea. It’s a good market and it’s a new twist to the acai juice idea.
Unfortunately in my opinion Lisa hasn’t thought things through. When you look at a company you have to look at the compensation plan. One of the main things your prospect wants to know is:
1. What does it take to get their intial investment back?
2. What does it take to get their monthly order of product for free?
The problem with Efusjon is both of these. You purchase your first order of product (4 cases) and a distributor option for $150. Then every month you purchase 4 cases of product for $120 a month.
Here’s the problem. You only make 4.25% commissions on your $120 a month orders. That works out to be about $5 per order. To make your money back you need to sell approximately 30 orders of product.
MOST people aren’t going to sell 30. Less than 5% of people will probably do 30 sales. 20% of people will probably do a few sales but they won’t make enough money to pay for their investment. So 95% of people in this company won’t make enough money to pay for their monthly autoship. That means the attrition rate is going to be really high. Most people will probably cancel their autoship within 3 months.
When you look at your MLM company you need to make sure you can help your people make their money back right away. Even if they just get the product for free that’s enough reason for a lot of people to stick with it. Your attrition rate in your organization will be much lower and because these people continue to work the business they’ll have the opportunity to grow and maybe one day find a leader that makes them a lot of money.
Efusjon gets around this by telling people it’s a 3 x 15 matrix (they call community overlap.) So the idea is you’d have overlap and you’d get rich… Of course it never works out this way… It only works out like this for the first few people. I don’t want to take the attention away from the point of this post.
Do you know what it takes to help your people make their money back?
The more people you can help to make their money back the better! The easier it is to make their money back the better! The more successful you will be!
- Ben Fitts
PS. Maybe Efusjon will work out. I like the idea for the product I just think their compensation plan is bogus.
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Hi Ben, You make so many good points.
By the way, up front, I do not believe in multiple streams of income either. Been there, done that, it turned out being multiple streams of confusion and OUTGO.
Knowing how much volume required to make your money back is very important. 4.25% return is incredibly low and yet there are companies offering less and massive numbers are jumping on the bandwagon.
Unfortunately there are so many opportunities on the internet, so much hype of making big money, actually having to do WORK to create that income is often not mentioned. Nor is the fact that building a prosperous Network Marketing business takes time.
But back to your main point, knowing at least your break even point is very important. Mentoring your team in the methods to make that happen is key. There again, though, if they are not willing to make the effort to do the WORK, not even 20 programs will get them there.
~Jennifer
Hi Ben,
Great post. It never ceases to amaze me how many people don’t do their homework before jumping into a network marketing “opportunity.” It’s funny because there seem to be two major extremes, there are those who analyze the details to death and never actually get started, then there are those who jump in blindly. Maybe if people read more blogs like yours (or the one I just started – though I won’t paste a link here because I don’t want to be ‘one of those people’), they’ll eventually get things figured out.
Sadly, I think there are a lot of sharks out there taking advantage of people. Mostly the companies. I mean, who can possibly create income in a system like this without using a massive retail strategy (which I’m sure the company frowns on). There are plenty of good companies, too; it’s just that these sharks give the entire industry a bad name.
Oh, and just to raise a minority voice, I do believe in multiple streams of income… to a point. When done properly, it keeps all of your eggs out of one basket. But when done improperly, your bottom line will surely suffer.
Do you want to create your own destiny, get money back. Read my online review on my website.
Strongs!
Ben-
Just wanted to let you know our attrition rate went public last monday. 1 out of every 16, 6%. This business is sustainable. My upline has over 750 but the number they are more proud of is the hundreds already getting checks in the downline. I encourage you to look in depth to Efusjon and you will see that on the surface this one looks the exact same as all the others but they have found a way for the average person to succeed, 15 out of 16 that is! It’s going to be around for a while
Ruffin,
Efusion JUST launched.
Come back to me one year from now with your attrition rates.
You’ve got a matrix. What’s happening right now is people are getting in early so they are actually seeing a little spillover.
In 3 months, 6 months, a year from now the matrix is going to be so dilluted that the new people won’t be getting the promised spillover and the $120 a month commitment to buy enegry drinks is going to cause people to quit.
I guarantee you. This business is DOOMED.
- Ben Fitts
I think you make a lot of great point. I was in eFusjon until I figured out how bad the comp plan is. Plus the facebook fiasco really made a lot of people sour on the company.
I’m much more excited about http://bigteam.myevolv.biz
It hasn’t even hit pre-launch yet. It’s in the family and friends phase. But it has the backing of Billionaire Trey White. It’s going to be huge. Imagine getting into Monavie before anybody else knew about it. Wow!