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Top Network Marketing Companies Use a Two Tier Pay System
The top network marketing companies in today’s market are using an entirely different pay structure now than used in years past – a two tier system.
In a nutshell the old way of doing business – multi-level-marketing companies are slowly becoming extinct with anything more than three levels of pay.
How it Worked in Years Past
MLM companies established a pay system that was based on a huge volume of people selling a little bit of product and as your team grew you were able to increase your income over a long period of time through lots of people.
What’s Different Today
Now, though, with the two tier system, the whole concept has changed and is now named network marketing. This means you still have a team to work with so you are not simply selling as an independent direct marketer. But the largest share of the commission goes directly to the person who makes the sale and a much smaller part goes to the team leader.
Now that it’s done this way you wonder why it was ever done differently but if you think about it when you are selling soap or any other lower priced item then volume to the company comes by the ingenious concept of an army of individuals selling a little each with overrides going to the team leaders.
Choosing Your Product – High Priced High Profit versus Low Priced Low Profit
When you choose a product to market either as a direct marketer, network marketer or multi-level marketer you have two choices:
1-Choose a product that requires a huge sales volume due to a low price point and therefore a low profit margin – this type product is easier to sell but requires a lot of volume.
OR
2-Choose a high quality product with high profit margins so you can afford to market and build your business – this type product may be a harder sell but you don’t need the huge volume just to make a profit.
Either way the product itself must be of very high value and high quality and ideally has some name recognition (although it may not if it’s a new product).
All the top network marketing companies are using this two- tier system now where you are paid well for your individual sales and your team leader receives an over ride, much like in the insurance industry.
This really is the only fair way to compensate those who are making the sales and therefore those who deserve it. I was a financial advisor in years past, and this same system was used in that industry as well.
Be Sure to Think Through Your Marketing System
Either way – whether network marketing (the preferred system for many) OR MLM, you will definitely need a marketing system in place because both require large numbers of leads and prospects.
With an online system in place these potential buyers / business owners will be funneled through a process to weed out the buyers and serious business builders from the tire kickers.
Your Team
The marketing team leader must provide methodologies and / or training for generating leads as this will be your primary responsibility. Today it is no longer just rah-rah go out and get them, but rather providing functioning systems with proven results.
You simply cannot expect to build your business just on word of mouth, phone calls and offline strategies.
Now, while the internet does afford you the opportunity to build a huge business that is systematic and automated, it also still requires the personal touch of a live, encouraging person – that would be you. And, of course, that’s much of what you get paid for!
