“Everything is a pyramid – the church, corporations, the military … “

Maybe so, but too often that argument is used by inexperienced networkers to explain the MLM business model when someone asks, “Is this a pyramid?”  Using that answer always seems evasive to us.  It does not answer the real question being posed, which is, “Is this an ILLEGAL pyramid?”

In the church or corporate or military pyramid, there MUST be fewer people at the top.  You can only have one Pope or one Donald or one General, but you need many more Cardinals, upper management, and officers.  At the ‘bottom’, you need many many more priests or ministers, office employees, privates and foot soldiers.

The real question should be “Are all these people receiving fair pay for their efforts?”  If the going rate for a good CEO is $200000 per annum, and the company is paying that much, it’s legitimate.  If upper management is receiving a fair $60000 per year and if an unskilled labourer is earning minimum wage, that’s legitimate too.

The pay has nothing to do with the pyramid structure.  It has to do with the skills the structure needs, and what it is willing to pay for them.  It also depends on what the provider is willing to accept.  No CEO will be working for $10 an hour and no company will pay a sweeper $200k!

An MLM company will have a pyramid structure simply because of the the way it grows.  There can be only one master distributor who recruits others to join the business.  A common scenario used in presentations is 1, 3, 9, 27, 81, etc.  It has to grow this way, but this is not what makes MLM legal or illegal.

It’s whether each participant is receiving fair value for his/her money and efforts.  When you start your business and send $500 to the company, you should receive $500 worth of stuff – $500 in health products, or $500 in luggage or clothing, or $500 worth of travel, or a $500 phone plus airtime, or … well, you get the picture.  If you receive fair value for your money, that’s legitimate.

If you send $500 to the company, and you receive a $20 kit they call ‘a business’ plus permission to go out and find others to send $500 to the company for a $20 kit they call … well, you get the idea.  That’s NOT legitimate.

If your commissions are being paid out of that $500, you are in an illegal pyramid.

Your commissions should be paid from the difference between the retail and wholesale cost of the health products, clothing, luggage, travel, or phone.  Just like it works in a store downtown!

If the business you are in does not ’sit right’ with you, ask yourself and the company some tough questions like these.  If you don’t like the answers, get out now.

All we have in this industry is our reputations, and we must not tarnish them in shady ‘companies’.

To read more questions to ask about a company, get this free report.

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com

Sandy Botkin warns, “Before jumping into any opportunity, stop and breathe deeply. Let the enthusiasm cool off. Then begin the process of deciding which company to join by finding the answers to a few questions.” For example …

What is the customer retention rate?

• When a company pays 50% of its revenue for commissions, if the customer retention rate on a product is 5%, your net long-term commission is only 2.5%.
  
• But, when the company pays only 10% payout, if the customer retention rate is 80%, your long-term commission rate is 8%.
  
• The customer retention rate is critical. To investigate the retention rate, you can:
• Ask the company if its figures on customer retention rate are available.
• Test the product/services to see if you would use it regularly.
• Ask the company for names of satisfied customers.
• Ask for the names and phone numbers of two or three non-repeat customers. Ask if you can call to find why they didn’t continue to use the product or service.
• Find out what the competition is offering in the same category and compare the prices.
  
• Your product doesn’t have to be the lowest for what it offers, if it offers some value that is not offered elsewhere.
  
• Your product also should be marketed well.

This is an excerpt from an excellent article by Sandy Botkin, well known CPA, attorney, and tax advisor to the self employed. To read the full article, click here.

This is the last tip of this series.  To read Sandy’s first tip, click here.

For more questions to ask of an MLM opportunity, click here and look for Pillar Three.

To download the free ebook Success In Ten Steps and get started right, click here.

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com

Sandy Botkin warns, “Before jumping into any opportunity, stop and breathe deeply. Let the enthusiasm cool off. Then begin the process of deciding which company to join by finding the answers to a few questions.” For example …

What is the compensation plan offered?

• After investigating the quality of the products or services offered by a company, one of the most important considerations is the company’s compensation plan.
  
• Comparing compensation plans from one company to another is difficult. (The Perfect Compensation Plan)
  
• Companies use a myriad of formulas. One way to simplify the process is to ask:
• How difficult is it to make it to the top? (The 10k Question)
• Do you need 5 good lines (active distributors under you) or will 2 lines do?
• What do you get by acquiring customers vs. acquiring distributors?
  
• Customers, not distributors should be the focus of the company.
  
• Thus the compensation plan for selling product/services should be at least as generous as that of bringing in new distributors.
• Are the numbers doable and realistic?
  
• Are you pushed to buy a lot of inventory up front to make a higher commission rate? It’s better to try a small amount of product first, see how you like it, see if other people are interested in buying it before investing in large inventory.
  
• If you are not satisfied with the compensation plan, you or the people you recruit will not stay long with the company.
  
• Even if you stay, you may lose people you have invested time and money in to other companies. (No Pay, No Stay)
  

What other miscellaneous benefits does the company provide?

• Does the company offer non-cash rewards?
• Some companies provide distributors with the equivalent of franchises without a franchise fee.
  
• They not only provide marketing materials but also management information, tax information and even an accounting system.
  
• Find out what is contained in both the distributor or upgrade kits. Many times the upgrade package may be a much better deal even though it is more exclusive.

This is an excerpt from an excellent article by Sandy Botkin, well known CPA, attorney, and tax advisor to the self employed. To read the full article, click here.

To read Sandy’s next tip in the series, click here.

For more questions to ask of an MLM opportunity, click here and look for Pillar Four.

To download the free ebook Success In Ten Steps and get started right, click here.

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com

Sandy Botkin warns, “Before jumping into any opportunity, stop and breathe deeply. Let the enthusiasm cool off. Then begin the process of deciding which company to join by finding the answers to a few questions.” For example …

How good are the marketing materials?

• All companies have marketing materials. Some are better than others. The better the materials, the easier it will be to acquire customers and distributors.
  
• They should have multi-colored, glossy, up-scale brochures which contain two elements …
• First, the brochures should stress benefits offered to the customer, explaining why the products/services are right for the buyer.
• Second, they should convince the customer through concrete evidence that the company is stable, offers low risk to distributors, and has a history of good management.
• It is, therefore, important to have some third party credibility such as double blind studies or newspaper articles extolling the virtues of the company.

This is an excerpt from an excellent article by Sandy Botkin, well known CPA, attorney, and tax advisor to the self employed. To read the full article, click here.

For Sandy’s next tip in the series, click here.

For more questions to ask of an MLM opportunity, click here and look for Pillar One.

To download the free ebook Success In Ten Steps and get started right, click here.

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com

Sandy Botkin warns, “Before jumping into any opportunity, stop and breathe deeply. Let the enthusiasm cool off. Then begin the process of deciding which company to join by finding the answers to a few questions.” For example …

What kind of training and support do they offer?

• The statement that “The product sells itself” is rarely true.
  
• All companies promise training; few deliver the consistent quality that makes training effective.
  
• Evaluate the training and the support materials. Look for …
• Role playing practice
• Good scripts
• Ways sponsors help you to get new leads
• A variety of quality training audios and videos
  
• Find out about switching to another sponsor if your sponsor leaves the company or doesn’t do training follow-up.

This is an excerpt from an excellent article by Sandy Botkin, well known CPA, attorney, and tax advisor to the self employed. To read the full article, click here.

For Sandy’s next tip in the series, click here.

For more questions to ask of an MLM opportunity, click here and look for Pillar Five.

To download the free ebook Success In Ten Steps and get started right, click here.

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com

Here is a collection of tips for writing good headlines:

“Cashvertising” by Drew Eric Whitman is a virtual blueprint for persuading the consumer mind.  It’s fast, fun, and a must-read for businesses in all industries.”  (Review by Roger Dawson, author of  ‘Secrets Of Power Negotiating’.)

Here is Whitman’s list of The Life-Force 8:

Human beings are biologically programmed with the following eight desires to which you should appeal:

1. Survival, enjoyment of lfe, life extension.
2. Enjoyment of food and beverages.
3. Freedom from fear, pain, and danger.
4. Sexual companionship.
5. Comfortable living conditions.
6. To be superior, winning, keeping up with the Joneses.
7. Care and protection of loved ones.
8. Social approval.

And here is his list of The Nine Learned (Secondary) Wants:

1. To be informed.
2. Curiosity.
3. Cleanliness of body and surronundings.
4. Efficiency.
5. Convenience.
6. Dependability/Quality.
7. Expression of beauty and style.
8. Economy/Profit
9. Bargains.

We got this advice from our friend Arlene, who has been successful in advertising (and jingle writing!) for years.

Offer a promise, benefit, or reward that reflects a want, need, or desire of your target market.

An ad should contain:

1. An attention grabber.
2. A benefit, promise or reward.
3. A call to action.

e.g.

1. Hey!
2. Wanna Lose Weight Easily?
3. Click here.

Here is an excellent short article from The Urbach Letter called “Are Headlines Important?” It contains great advice from Maxwell Sackheim, the inventor of the book-of-the-month-club, and David Ogilvy, one of the greatest ad men ever.  Sackheim says, “The slickest writing, the finest paper, printing and artwork can’t make a good idea out of a bad one or an attractive offer out of a poor one.”  Ogilvy tells us, “Five times as many people read the headline as read the body copy of your advertisement. It may be the only chance you get to make a statement.”

Here are lists of emotional words, hypnotic words, and Great Headlines.

Jay Abraham’s list of The 100 Greatest Headlines Ever Writtten.

Ad Age’s list of The Top 100 Advertising Campaigns of The Century.

We love this fun program, highly recommended to us by Tom ‘Big Al’ Schreiter, called “Headline Creator Pro.” Tom uses it for all his campaigns, and his nephews use it to mock their teachers!  Just answer five simple questions, and the program produces dozens of ideas for you.

Once you have written your headline, you can use the Headline Analyzer at the Advanced Marketing Institute. The Analyzer rates your headline for empathetic, intellectual, and spiritual impact.  Aim for 80% or better!

Happy Headlines!

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com
Material Connection Disclosure

Sandy Botkin warns, “Before jumping into any opportunity, stop and breathe deeply. Let the enthusiasm cool off. Then begin the process of deciding which company to join by finding the answers to a few questions.” For example …

What kind of sponsor support is offered?

• We can’t overstate the importance of this answer. Not all sponsors are created equal.
  
• The person who takes you to the meeting becomes your sponsor if you sign up under him or her. You are locked into that person for a long time.
  
• To avoid this, don’t sign up immediately. You can wait, shop around, and find a sponsor who is known to provide strong support to his people.
  
• It is not polite for a sponsor to accept you at a meeting if you have been brought there by another sponsor. You will need to get the person’s card and call them after the meeting.
  
• Be careful even if you are signing up only to buy the products at wholesale. You may want to become an active distributor later, and you will be locked into the person you are buying from.
  
• To find the right sponsor, attend several meetings in your area.
• Introduce yourself to numerous successful sponsors.
• Evaluate their reputations. Ask them what they do for their people and how long they have been doing it.
• Some sponsors are like robots, signing up everyone but supporting none; others, more responsible, do mass advertising or marketing and pass warm leads along to their downline.
  
• One of the major benefits of a network marketing company is that you are in business for yourself, not by yourself. To realize this benefit, you must sign up under the right person.

This is an excerpt from an excellent article by Sandy Botkin, well known CPA, attorney, and tax advisor to the self employed. To read the full article, click here.

For Sandy’s next tip in the series, click here.

For more questions to ask of an MLM opportunity, click here and look for Pillar Five.

To learn what Tom ‘Big Al’ Schreiter says about the importance of sponsor support, take his quiz on page 58 of Success In Ten Steps.

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com

Sandy Botkin warns, “Before jumping into any opportunity, stop and breathe deeply. Let the enthusiasm cool off. Then begin the process of deciding which company to join by finding the answers to a few questions.” For example …

Does the company really have momentum?

• Every company will claim that the time to join is now because of the “S” curve, a curve that marks rapid growth times.
  
• Momentum is important because growth magnifies efforts.
  
• If you join during a growth period caused by either the age of the company, or by introducing a new product, or by getting a new patent, this growth can attract new distributors and more sales.
  
• If the company or product is growing at 3% a year, your business growth will mirror the 3%; but if the company or product is growing at 30% a year, then your business growth should also mirror that percent.

This is an excerpt from an excellent article by Sandy Botkin, well known CPA, attorney, and tax advisor to the self employed. To read the full article, click here.

For more questions to ask of an MLM opportunity, click here and look for Pillar Two.

To download the free ebook Success In Ten Steps and get started right, click here.

For Sandy’s next tip in the series, click here.

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com

Sandy Botkin warns, “Before jumping into any opportunity, stop and breathe deeply. Let the enthusiasm cool off. Then begin the process of deciding which company to join by finding the answers to a few questions.” For example …

Will the products sell?

• Before you buy too much inventory – a good guideline is don’t buy more than you can sell or use in a month.
• Do some comparative shopping. Is the price of the products reasonable?
  
• Can customers find just as good a product on the market for less? Usually network marketing companies offer products which are only available through them and which are claimed to be (and may be) better than those offered elsewhere.
• If the products are not unique, are they priced competitively?
• Are the products so desirable that people will continue using them and recommending them even if they stop being distributors? This is an important question, since most companies have a high attrition rate among distributors.
• Will the products sell even if not marketed through network marketing?

This is an excerpt from an excellent article by Sandy Botkin, well known CPA, attorney, and tax advisor to the self employed. To read the full article, click here.

For Sandy’s next tip, click here.

For more questions to ask of an MLM opportunity, click here and look for Pillar Three.

To download the free ebook Success In Ten Steps and get started right, click here.

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com

Michael Dlouhy poses an excellent question that allows us to compare and find the best MLM compensation plans:

How many distributors are required in your business to generate a walk away residual income of $10000 per month?

We first introduced the question in this article “A Question We Should Ask” and recently used it to analyze the Bongo Juice Company and Excel Communications.

In analyzing over three hundred network marketing companies, we have found a huge range of answers to this simple question – all the way from a staggering high of 28000 down to a workable low of 400.  A 70-fold difference in how hard you will have to work to make a dime in this industry!

To learn the answer to the 10k question for YOUR company, please try this 10k Calculator.

How did your company do when you put it to the 10k test?

Please post your results here in the comments section, and we’ll add your info to our growing list.  Please also let us know how we can improve the calculator, which is in the ‘beta’ stage of testing right now.  Thank you!

For a complete manual of dozens of tips for choosing the best MLM company for you, read this free report.

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com