Yes, most top network marketers will agree that you must have a solid, credible and well established company with many millionaires, you must have a great range of products supported by top scientists and doctors, and you must have good leadership and support system!

What if you have all of the above and you are working on a complicated compensation plan that you find it hard to understand and explain to your friends? What if you know your compensation plan pays much less than what other companies are paying. There are compensation plans that pay less than 35% and there are compensation plans that pay more than 50%.

More importantly is the breakages and blockages found in the compensation plan that makes it a great challenge for the newbies to earn a decent part-time income and burned up many experienced network marketers!

So why do companies shoot themselves in the foot? I can only think of three reasons: ignorance, plain stupidity or pure greed! Some companies have executives who have never done network marketing themselves and don’t understand how a network marketer think and feels. Some companies have weak management who are not doing the right things and are not staying competitive with a compensation plan that pays close to what the leading network marketing companies are paying. Some companies have management who are greedy and will want to squeeze as much money as possible from the distributors and want a bigger piece of the cake!

So what is a good compensation plan? Here are the benchmarks:

1. It must be simple to understand and explain to your prospects, if you find it hard to understand and explain, how are you going to do the business? This business is about duplication!

2. It must pay close to what the leading network marketing companies are paying and usually it is more than 50% payout and here we are not talking about up to 50%, we are talking about full payout which means the company ensures full payout and do not keep what is not paid out to the distributors.

3. It must be balanced and ensure the part-timers can earn a decent part-time income and not have the top leaders flashing their $100,000 a month cheque while thousands are struggling to make their first $1,000 a month cheque! If only a few make lots of money while the rest are struggling and asking “Where is the money?” then it is just like a pyramid scheme where only a few make money and thousands are not making money!

The network marketing industry has been hurt because of front loading and poor compensation plans which cause a very high attrition rate!

The objective of front loading is to reward the leaders with high commission, instead of starting with about $200 worth of products, people are front loaded with products that cost $2,000 or more, that is ten times more! This will ensure the leader’s commission will be ten times more and the company’s profit will be ten times more! The industry has been hurt by greedy leaders who buy tens of thousands of dollars to enjoy higher discounts and commission earnings and later flood the market with their products
at way below wholesale prices.

Imagine yourself trying to sell your product at $130 retail price while others are selling the same product at $50 far below wholesale price of $100! How are you going to make money selling these products? Don’t you think your customers will feel short changed and even cheated when they bought the product from you at $130 and they got to know about others buying it at $50?

I have been in network marketing for over 16 years and one of the objectives of this blog is to warn people about the malpractices of companies and rogue network marketers who misrepresent and give a bad name to the industry. The public must be educated on how to identify a good network marketing company.

And to make matters worse, there are many instances where companies that offers get-rich-quick schemes and money games disguised themselves as network marketing companies! I have written an article, “Get-Rich-Quick Schemes: Caveat Emptor” to warn the public about such companies and it was published in The Business Times on 12 June. I have also posted this article at my blog.

If you are looking for a good network marketing company with a good compensation plan, watch this video, click here. Give me a call at +65 8168 2088 and I will share with you a very attractive compensation plan that attract leaders who are smart enough to recognize a good compensation plan when they see one!