Getting Paid - Why Does it Have to Be So Confusing?

by Hamish Hayward

Published on this site: September 12th, 2005 - See more articles from this month

There are many different reasons why people choose to get involved in network marketing. Although it may not be the primary reason for many people, getting paid will be rank high on most people's list.

So it makes sense that, when you are deciding which of the many available network marketing opportunities to get involved in, that part of your evaluation process will consider the payment, or commission scheme in place.

At this point things can get a bit complex. Unsurprisingly, almost every network marketing company in business today will claim to have the best pay plan available. They probably genuinely believe this (and they might be right) and will usually devote several sheets of paper or screens to show this to you in all its glory. Expect to see the word "revolutionary" used at least once.

Some of these schemes can appear a bit complex to say the least. There will almost certainly be a matrix of some kind involved and there will probably be some kind of "ladder of success" where you earn new ranks and titles as you progress in the business.

It can seem a bit daunting, trying to work out how long it will take you to get from Space Cadet to Star Fleet Commander and what it all means in terms of money - but focus on a few simple questions and you can cut through the mumbo-jumbo.

1. What will you get paid for?
2. How much will you get paid?
3. When will you get paid?
4. How will you get paid?

1. What will you get paid for?
   
   Surprisingly enough, this is a (slightly) more important question than "how much?" - for one simple reason. If your main, or only, source of income results from recruiting other people into the business, then there's a very high possibility that you may be involved in a pyramid scheme.
   
   Your main income should arise when you sell a product or service to a customer, not when you recruit someone. There's absolutely nothing wrong with profiting whenever someone who you have introduced to the business makes a sale - but you shouldn't be making significant income just for recruiting them.
   
   You should also check if there is a "qualifying" level of sales that you need to make each month in order to get your commission. It can be very frustrating if, having built a large customer base and a healthy downline team, you miss out on your monthly cheque due to an insufficient amount of personal sales.
   
   
   
2. How much will you get paid?
   
   Having satisfied yourself that you're getting paid for moving a genuine product or service, you can now focus on how much you'll be earning. Obviously you want to make as much as you can - but how much is enough will depend upon the type of product you're going to be marketing.
   
   If you're selling relatively high price items and getting paid for the sale alone, then you will want a fairly high percentage as commission. A minimum of 25% would be reasonable and 50% is not out of the question for some types of product.
   
   If, on the other hand, you're promoting something which will bring you a genuine residual income month after month then you might be happier to settle for a reasonable signup bonus followed by a relatively small percentage of the monthly fee thereafter. If you're confident that you offer a good value product that people will continue to use month after month, year in, year out, then you can accept a much lower percentage of the takings. In the long run you will make more money per customer and you may also find it easier to get customers who have to shell out a relatively small amount of money up front followed by ongoing monthly rental or leasing fees.
   
   When you start in your network marketing business, most of your earnings will be as a result of your own efforts. However, later on, as you build your team, your personal earnings will be outstripped by the income you will make from your team's sales. So you should also make sure that you know how much profit you will be able to make from the efforts of your downline members. What percentage of their sales will you make and how deep (how many levels down) will this be paid out on?
   
   
3. When will you get paid?
   
   You should get paid pretty quickly after the customer has paid the company you're working with. Payment processing on the internet is very rapid and you should be paid once a month, no more than a month in arrears. After all, the idea is to supplement or replace your monthly salary - isn't it?
   
   
4. How will you get paid?
   
   In an ideal world, you should receive your monthly commission directly into your bank account (via PayPal perhaps), paid in your local currency. If this isn't possible, payment in dollars is the next best thing.
   
   Focus on the fundamentals and don't be distracted by the complexities of the pay plan. You'll avoid disappointment and might just find the ideal business for you.

Hamish Hayward - Discover the 6 key criteria you must evaluate to ensure business success. Free e-books, newsletter plus other tools and resources. -
http://www.perfectsystem.co.uk