subject: Do You Like Losing Money In Your Mlm Business? [print this page] You arrived at the decision to start your MLM business so you could make money and achieve your dreams. At least that is generally the reason people get into into multi level marketing. Regrettably, I encounter too many network marketers who appear to be okay turning a loss month after month, because they are swept up in the emotional hoopla of the opportunity.
Let me speak candidly with you today, if I may. I know marketers who spend several hundred dollars to join an opportunity, then they spend an additional one hundred dollars or more per month for the autoship and the back office access. Whenever they get a check it is twenty or thirty dollars. So month after month the pattern continues, with them making their MLM company money, while their personal MLM business goes into the red.
Among the first things any network marketer should to be strongly evaluating prior to joining any multi level marketing opportunity is the production necessary to make their business profitable. So let me us a hypothetical illustration to help exemplify this point. John is looking at joining XYZ Company. The initial sign up cost for XYZ Company and the purchase of a starter kit is $500. To get bonuses and overrides, John is required to get on autoship for $75 per month and he also has a $25 per month fee for his internet site and marketing tools. This means that should John choose to join XYZ Company as an MLM business, he will incur a first year expense of $1,700 and an ongoing yearly expense of $1,200. John won't be realizing a profit until he has generated at least that level of income.
Now let's take this a step further and consider how John will earn his money. We'll assume that John receives $100 for each personal referral who joins his team at the $500 level and he also makes $5 in retail profit with each retail sale he makes. This means that John has to personally recruit no less than 17 people to his business in the first year just to break even or he has to have 340 retail sales in the first year. Remember this is just to break even. Also consider into account that we have not figured in costs like postage, business cards, phone charges, etc...
Now at first glance you may think this sounds easy. In principle it should be; however, the reality of multi level marketing is that the average network marketer recruits 2-3 people in their entire time in an MLM business. Sadly this is among the biggest reasons for a high drop out rate in our industry.
If you are truly considering your MLM business as a way to earn money, then it is imperative that you begin to approach multi level marketing with the mind of a business person. Evaluate the amount of production that is required for you to break even and then get into profitability. Ideally you should be considering business opportunities that will put you into profit with one or two recruits or a handful of sales. This profitability should be obtainable in your first 60-90 days. It is also wise to consider the ongoing costs of your business. It may be wise to consider a lower cost alternative that would allow you to work in a similar market niche with less overhead.
Ultimately you did not start your MLM business to lose money, but instead provide a vehicle for reaching your dreams. Begin treating your business as a business and don't settle for a losses month after month, simply because of emotional hype.
