A popular load of manure being shoveled on the internet recently is a scheme that promises 100% commissions! Let’s stop right there before the geniuses behind the plan have a chance to mesmerize us even more.
If a product costs $80 to produce and deliver, and it sells for $100, commissions of 20% can be paid. If production and delivery costs can be reduced to $70, that leaves more profit and commissions of 30% can be paid out. If 50% is paid out, the product costs $50 to produce, and so on.
If 100% commissions are paid out, the cost/value of the product must be … let’s see … find the calculator … carry the one … we get … ZERO!
Ask any businessperson if this makes sense in the real world and get ready to be laughed out of the board room.
Network Marketing, MLM, Internet Marketing, Affiliate Marketing are all alternate methods of doing just one thing – to bring goods and services to the end consumer. Commissions are paid from the difference between retail and wholesale. It’s just that simple.
If it doesn’t make sense downtown, you shouldn’t fall for it online.
Too many of us think that anything is possible in the magical world of the internet, and too often we find ourselves left with an empty wallet and a steaming pile of mystical manure.
When you watch the ‘business presentation’ of the 100% commission crooks, you’ll see a lot of money changing hands (in the upward direction) but no product or service moving back down. This is a classic definition of a pyramid, where the value flows in only one direction.
The result is that you have many people collecting (not earning) money in a scheme based on a product or service of zero value. It would be a lot tidier for the organizers if they just got rid of whatever they pretended to sell, but pyramids are more polite when they are disguised.
Not once in the seven minute presentation is a product mentioned – more indication that the ‘earnings’ are coming straight out of the pockets of the participants.
Coincidentally, this quote arrived this morning just as we were writing this article:
The con man works harder and pays more for what he gets out of life than any other person, but he kids himself into believing he is getting something for nothing. Napoleon Hill
If you’re tired of all this malarkey and want to make sense of the industry, start with the free report Big MLM Lies.