Have you ever wondered why most MLMers quit too soon?

Here is an example of what many companies teach in their business opportunity presentations. Many of them show you a diagram and tell you all you have to do is sponsor 3 who get 3. Then they show you how on your 7th level you’ll have 2100 people.

The problem is that in reality this is NEVER how it works. It never works out perfectly where you get 3 who each go out and get 3, and then they get 3, etc.I repeat it never works out this way. It usually takes several people before you find just ONE that will work at the business. Because of this most new network marketers (MLMer’s) give up right here:

You see they have been told that all they have to do is get 3 and they’ll be millionaires so most MLMers quit here. Many of them spend a lot of time trying to teach these 3. Many of them stop recruiting and spend all their time trying to work with these 3 and drag them with them. They get discouraged and give up.

Even future leaders can get discouraged. They may go out and sponsor 5 or 10 or more people and get discouraged when it doesn’t work out. Why? Because they’ve been mislead.

In reality it usually takes 20-30 people to find just one leader. The potential leader in the above example might have given up just before he found his next leader!

In reality this is probably a better example of what your organization will look like from a successful MLMer.

You see this person stuck around long enough. They personally sponsored 20 or so people and while only a small percentage (20% or so) did something with their business, they found that one person who was a leader and their business began to really grow. And pretty soon they found another leader. It may not come from someone you personally sponsor. It might be several levels down. If you stick with it and sponsor enough people and train enough people it will happen.

If we began to show examples like this, would we be more successful in MLM?

If we began to show examples like this would we have less people who get angry thinking “we took their money”?

If we were honest like this and showed how much work is required would we sponsor less people but sponsor more qualified people?

What do you think?

- Ben Fitts

Popularity: 51% [?]

This is part 2 of why MLM companies should not charge for web sites…

In the first part I mentioned how someone I was talking to showed me their new company and their company was charging $20 a month for web sites. What’s worse is the web sites were horrible and I would NEVER market that web site as it would only cause you to loose money. Any advertising would be ineffective as the web sites suck. All money spent marketing the web site would be lost.

So some of our readers commented back and I’d like to take this opportunity to address their comments:

Cheryl Gonzalez Says: May 10th, 2008 at 5:34 pm eBecause they view it as another Profit Center, although some have both a free and a paid site. I don’t believe Company sites are very effective though…maybe helpful for signing people up, but they can’t be found in the search engines. I don’t think Companies realize this.

Hi Cheryl,

Is it ok for companies to create a profit center around charging their distributors for web sites?

I once was involved in a telecommunications and Internet based MLM. Keep in mind it was an Internet based MLM so you’d think they’d have some cutting edge web sites right? After all they SOLD web sites to other businesses.

However:

1. The web sites were crap

2. They charged their distributors for web sites!

Afterwards I figured out at $24.95 for web sites times 200,000 distributors the main reason they were doing this was because they were making almost $5 Million a month off the websites. Even if they were paying out 50% profits to their distributors they were making 2.5 million a month in profit off their own distributors.

You’re also 100% right. The company web site might get listed once in the search engines, but all the self replicated web sites for the distributors won’t get listed.

Anyone with a unique web site will have a better chance of getting listed in Google even if it is only a 1 page web site!

Cheryl also wrote:

Good sponsors will put together a website with their Team and make replicating pages available. I’ve been doing that since the early 90’s and have built dowlines in the thousands. I don’t believe the upline should charge for that either…although most of them will

Good point. I made self replicating lead capture pages for my team and this is one of the things I do is I give them away  free to them.  Then I found people who weren’t on my team and people who were below my paypoint were using them so I added a premium membership.  I even feel bad about that and plan to get rid of those premium memberships at some point soon.

Melody the Watkins Lady Says: May 21st, 2008 at 9:59 am eI’ve thought about this as well and I think there are a couple of good reasons why companies charge for their web sites.

#1. It weeds out the people who aren’t really serious.
#2. It helps cover the cost of maintaining the site.

I always recommend my team members wait until they are already producing an income before they sign up for a site, this way their business is paying for it’s self.

I disagree with Clement’s statement, the site can be extremely effective if you know what to do and how to use it. In fact they are no different than Cheryl’s self replicating sites, neither can be found in the search engines.

For me knowing I don’t need to worry about updating the shopping cart, security issues, payment processing, shipping, hosting etc gives me peace of mind so I can focus on marketing the products and helping my team members.

Unfortunately I have to disagree with your statements.

There is no reason to weed out the serious!  The company should actually do whatever they can to help the “non serious” be successful!  If we could help the average distributor get a few more leads and make a check or two we’d find many of them suddenly become more serious! Why wouldn’t companies want more leads, more customers, and more distributors?  What if companies made better lead capture tools and made them free.

What if it lead to just 10% of those average distributors getting 1 more customer or 1 more distributor.  Do you think that would have a big impact? Do you think they’d be pretty excited to get a paycheck and might put more effort into promoting the company?

It isn’t just the 1% growth you’re company would have but the 10% of distributors who get more interested.  What if you could energize 10% of your worst distributors and make them more effective?  Don’t you think that would be worth it?

You also said you thought it would cover costs.

Obviously you’re not a technology person.  So let me break it down for you.

Most companies don’t even create their own sites.  They outsource them.  There is a popular company that sells mlm, back office, downline, and accounting software to companies.  They also will create the web sites for the company.

If they did create their own sites from scratch then you have the costs of a few developers and your web hosting.  Even if you’re paying $200k a year for developers, you’re web hosting is probably only a few thousand dollars a month! Let’s say a grand total of $250,000 a year for the company to have their own cutting edge web sites.

Let’s be bold and say you develop your own rocking web sites.  You pay about 400k a year for a staff of developers and designers. That includes a lead developer you pay $100k a year too and several support developers and a designer. You also pay another $240k in web hosting costs at $20k a month.

In the scenario I gave you above where the company is making $5 million a month off selling their web sites to their distributors they spend $640k a year on developing and maintaining their web site.  But their making $60 MILLION selling the web sites to their distributors.  The costs to create and maintain a KICK BUTT web site is minimal.  The company could easily eat the cost of $640,000 right.  If they gave away their web sites for free to all their distributors don’t you think they’d make back that $640,000 in extra sales?

AND I’m talking about a kick butt web site not the junk most companies have.  Most companies have no idea how to market on the internet.  Heck most companies don’t know how to market period.  They BUY the marketing tools from the top distributor teams.

Did you know that?

If you’ve been in a startup company with no tools you’d understand.  I’ve been with a new company from the beginning and I’ve seen it first hand.  All the cutting edge tools we have were almost all purchased from top distributors.  Very few were actually developed by the company internally.

The other thing many of your companies do is outsource the web sites.  So the costs for them are even less!

If you disagree I’d love to hear your opinion! (or maybe you just have questions…) Click on the comments link to the right and let us know!

- Ben

Popularity: 54% [?]

Hi everyone,

It is with great sadness that I write to you today.

Some of you may know that our beloved cat gunther has been sick for about 5 months now.  Just after Christmas we discovered he had congestive heart failure.  He has been under medication at least 3 times a day since then.

After a very long night, this morning at 5:30 AM we decided with the help of our veterinarian it was time to ease his suffering.

We will miss him.

He was a much beloved part of our family.  He usually slept in bed between Jennifer and I.  Often he sat here on my desk or slept between my arms while I worked.  He loved to eat.  He loved to snuggle.  He loved people.  He loved to be boogery to  his sister.  He will be missed.

- Ben

Popularity: 70% [?]

Why do MLM companies still charge for web sites?

A great guy just contacted me about his new MLM venture.  He joined a brand new company and he wants to go really fast.  So he contacts me about doing some consulting.

Well I checked out his web site and I was shocked.

The company is still charging distributors for web sites!

Why on earth would you want to charge distributors for their marketing web sites?

Wouldn’t you want your distributors to have every possible tool available to them to succeed in their business?  In today’s world doesn’t EVERYONE need a web site?  So why would they charge their own distributors $19.95 a month to have a web presence?

I’m sorry but this isn’t a smart business practice.  Sure 99% of your distributors will pay the $19.95 a month but why do you have to do it?  I know it adds a little more profit to the company and a little bit more commission to the distributors but I just don’t get it.

This is one area where MLM companies could really learn from successful affiliate marketers.  Successful companies with massive affiliate sales forces give away tons of tools to help their affiliates.  They give them away FREE.  Just look at Amazon.com.  You can get your own Amazon.com store to focus on a specific niche… FREE.  Needless to say a lot of Amazon.com affiliates have setup their own stores. This helps get Amazon.com a ton of exposure and probably more sales than if they charged for these tools.

Why do MLM companies have to charge for everything?

- Ben Fitts

Popularity: 72% [?]

Hi all,

I just got back from my cruise in the Caribbean and am trying to get caught up.  Sorry I didn’t post last week but my laptop wasn’t being nice to me. LOL.  I had expected to have internet access from the boat.  Oh well.  Thanks for still reading this little blog. I appreciate you

Today I have an interesting story about how blogs can get really good rankings in Google search engine listings.  Even regular web sites can get top rankings with a blog.

I’ve written about this a lot in  Nichework Marketing.  I hope you guys have been paying attention.

In fact in the Nichework Marketing book I wrote: “I insist that you setup a blog“.

I went on to say that I think you should setup a blog even if you have a regular web site.  Why?  Because blogs can be very powerful tools at getting good rankings in the search engines, especially with Google.

Today Jonathan Ledger wrote on his blog about how one of his old sites had lost it’s Google ranking until he started posting to the blog on that web site again.  Then the blog’s rankings went back up and in fact went even higher than they were originally!  For more on the story check out Jonathan’s blog.

Popularity: 72% [?]