My name is Steve Mommaerts. I am the vice president of sales and marketing for Multisoft Corporation for the past 14 years. My team and I have helped literally thousands of entrepreneurs like yourself start their own direct sales company over that time with countless going on to become very large success stories. It is this experience I would like to share with you in my blog series to help you realize your dreams of becoming your own boss and running a successful direct sales company. Allow my experience to be your guide to success.
I often get the same questions from the people I consult with on their new business. They always ask, what is the best compensation plan to use for my company or what is the best plan on the market. Many people think there is a straightforward answer and will argue it I either a binary plan or unilevel. Other people will say matrix because it is more fair. Here is how I would like to address this complex question. The best plans are those which are built around the cost and selling price of the product which allows for the max amount of earning potential for the members and allow the company to earn a fair profit so they can continue to grow and expand the business far into the future. You are probably asking yourself, “what does that actually mean?” Let me explain in a little more detail for you.
Any product or service a company is going to sell through their company will have a hardline cost of goods or service to acquire that product to sell. This figure can vary depending on the ingredients in the products, serving sizes, cost to ship and many other variables. The selling price is how much you will be able to sell the product for at wholesale since this is the amount your members will pay for the product. The retail price does not come into play because that money collected is paid directly to the person who sold the product so it does not factor into the profit to the company. This gross profit is where you can start to decide which style of plan makes the most sense taking into account if the product is a one time purchase or has recurring purchases. Some products don’t lend themselves enough profit always fit into a certain style of plan. One I determine which styles of plan will work for the pricing model of the product, there can be multiples, Your MLM Consultant should spend time with you and the ownership understanding the compensation plan, how it rewards, recognizes and incentives distributors and what you feel confident in presenting to your distributors and customers. The location of the customer base also comes into consideration because different regions of the world tend to favor different plans. More on that shortly. I would not expect the owner of a company to try and present a recycling matrix style plan if they were not familiar with this plan and never participated in a plan similar. If you are not 100% confident your plan will make money for your members, they won’t be either.
I mentioned geographic region earlier in the style of plan I help a new company design. I know that in the Asia region a majority of potential distributors want to work with a binary plan because it allows them the fastest way to grow their team and earn commissions. They prefer this style of plan because they are very good and building a pair of powerful sales teams. It would be hard to convince a person starting a company in Malaysia that they should only use a unilevel plan when their members will be the most excited for a binary. In North America, most people understand how a unilevel functions and that is easy for them to understand. You always need to consider where you main customer base will be derived from.
There are many companies who are very successful that do not have the plan with 20 ways to earn and a series of complex bonuses. What they have are focused owners who have given their members a fair compensation plan that allows them to earn lucrative commissions based on their sales and team building efforts. There will always be a new company with the ‘next best’ bonus in the history of direct sales. Whether your new business wants to build through a binary, unilevel, matrix or hybrid of any of those, I will be happy to help you evaluate your product cost structure, your current marketplace, and profit goals to design a compensation plan to give you continued growth and generous payouts to your members.
Please share this article with others that can benefit from the information. I would love to hear from you and schedule a personal phone call or face to face meeting in one of our Asia based offices. Please contact me through email: [email protected] today and let me help build your plan and path to success.
Cheers for now,
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