Twenty Are Needed, Four Are Essential

I enjoy writing articles in areas that interest me. These fall into four categories, Health, Computers, Education, and Travel. I am currently looking for a day-job in Software Engineering as well as creating other streams of income. Since many of the opportunities for maintaining our best health are with the products of network marketing companies, this article covers that topic. If in network marketing interests you, keep reading. If you are a techie and more interested in Computers, I promise that the next article will be more technical. For now, techies please go to the Computers tab.

Binary Compensation System

Binary enables you to work more closely with those whom you have brought in.

In network marketing, most “experts” say that you need at least twenty people in your organization to start making money and creating a revenue stream. Due to the various structures that different direct sales marketing organizations use, you  either work with those you bring into your organization or compete against them for new prospects.

The traditional method was the “wide” approach,where you have to get the twenty people yourself and put them directly under you. In the nineties, the binary system was developed. Depending on the set-up, you needed to get two to four people directly reporting to you and then you would help them build their businesses to bring in the 20+ people you need to succeed. I believe that the binary method promotes better cooperation between team members. In order to succeed, you must help those you bring into the organisation to succeed also. In a good plan, you receive not only the commission for sales under you, but also a bonus for the sales of those you bring into the organization. A compensation method that encourages people to help each other is the best compensation mechanism possible.

The best compensation plan is no good unless there is also a good product to go along with the plan. Looking back over the history of direct sales organizations, each year produces at most one to two new companies who are still in existence at least 10 years later. Many die out the first year, and unless there is a good line of products, most do not survive for the ten years. Check out the product lines. What is the research showing the quality of the products? If they are associated with health, are scientists standing behind the products or are they sponsored by marketing experts? Are the products so good that customers are willing to buy them without involvement in the networking portion of the business? Too often, at least the ones I have seen, if the founders are marketers they are interested in making the big bucks and promoting just the opportunities to “make a fortune.” Be aware of the opportunities and see if your gut tells you it really is a good opportunity. One gauge is how long the company has been in business and if it has grown each year since its founding? Another is based on the company’s products, do the products actually deliver what they promise. Again, check your research. There are various places you can check for quality and customer satisfaction. Ask the person who is telling you about the opportunity about both the products and the compensation plan.

The company with whom I work is in the health industry. It uses direct marketing because of the cost of bringing products to market in the more traditional manner. I also teach Business Marketing. In the traditional marketing methods, bringing a product to market usually includes prices that include 70-95% of the cost of the goods going to middle-men or final resellers. A good example are soft drinks. A manufacturer will receive about $0.02 for the syrup to create one soda fountain drink. How much do you pay for one at a restaurant. The rest of the cost goes to that middle-man or restaurant where you purchased the drink. This is an incentive to developers of new products to use direct sales to allow them to sell their products to the consumer for far less than the product would cost going through traditional channels.

Once you look at the binary system, then ask how fair it is to people who come in later. Some of the original binary systems did not put a limit on each of the binary cells. This would cause the original distributors to receive most of the compensation no matter how well a new distributor does. To me, it is far fairer to have a maximum earning on each binary cell. People would then be provided methods to acquire more binary cells, to allow them to continue to grow their business. In this method, the people who do the work, earn the money. Just being in a good place will allow you to earn a comfortable living. To grow more, you will have to continue to do the work.

In conclusion, the best network marketing opportunities are with a company that has a fair compensation plan and a fantastic product line. There are such companies out there. Write me, and I would be happy to share any information I may have.

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One Response to Twenty Are Needed, Four Are Essential

  1. Thank you, I have just been looking for information about this subject for ages and yours is the greatest I’ve discovered till now. But, what about the conclusion? Are you sure about the source?

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