MLM Commission CalculatorThis is a simplified calculator which helps people who participate in multilevel marketing programs estimate their commission payments based upon the size of their downline. Select the commission rates, downline size, average personal sales volume & frequency of payment to quickly calculate your MLM commission checks.
The commission per downstream level will be automatically calculated for each level & the total commissions are shown at the bottom of the calculator. The data shown in the top portion of the calculator matches the frequency you select from the dropdown. The bottom part of the calculator expresses commissions daily, weekly, biweekly, semimonthly, monthly, bimonthly, quarterly, semiannually & annually. This calculator offers granular control of partner size and commission rates by downstream level. We also offer a calculator which automates inputs.
Guide published by Jose Abuyuan on March 1, 2020
No matter what that recruiter is telling you, multilevel marketing (MLM) is far from an easy job. The industry is a minefield of potential scams and toxic working environments. Even finding one that isn't a glorified Ponzi scheme is no guarantee of an easy buck. Market forces and poor business decisions conspire against MLM distributors from day one.
In fact, the chances of succeeding are astronomically low. Only one out of a hundred MLM distributors ever succeed in growing a successful venture.
If you're looking at this page, then you're a step ahead of the need to stay informed before making that commitment. Arming yourself with knowledge is the best way to avoid the common pitfalls of this industry. This and our industry overview guide can help you decide if this is the right side-job for you.
There are four main obstacles to succeeding in an MLM:
These are all endemic to the industry. Less scrupulous businesses also blur the line between the two. This has led to toxic work cultures that focus on gathering downlines over exploring market viability.
Pyramids have been the bane of MLMs since the term was first coined. The reason for this is simple. Many MLM distributors can make money managing commissions from people they recruited. Critics claim this parallels the unscrupulous methods used by pyramids scams.
Making things worse, insidious pyramid schemes rebrand their scams as an MLM business. A few less scrupulous MLMs use similar underhanded methods to force growth. As a rule of thumb, look at their marketing approach. If their material focuses on selling products to customers, then you have a legitimate enterprise.
Marketing wasn't much of an issue during the early days of direct selling. There was plenty of room to expand and a large group of buyers still unreached. And for some of the big MLM brands, this is still the case. For others, the product itself is hard to sell. How many people can afford to buy a new water filter anyway? Why are these fellas still in business?
Today, it is rather difficult to make the “marketing” part happen. The consumer base in small communities is often filled to the brim with competitors. You'd be hard pressed to find enough people to sell to without bumping into other sellers.
The saddest part is that recruitment incentives often plays a role in market saturation. Too often, a new downline you make ends up becoming a new competitor within your local market.
The MLM industry has had a bad rap in more ways than one. Shady MLMs and pyramid schemes foster a cult-like dedication to their brand. Many controversial MLMs are involved in predatory business practices. One of their abuses include saddling impossible sales quotas to distributors.
Even among legitimate direct selling enterprises, a toxic culture can emerge. Overzealous distributors become attached to the prospect of receiving glamorous benefits. This can lead to cutthroat practices such as aggressive recruitment. Downlines might also suffer from this mentality. Uplines might coerce them to buy excess inventory, which could put a strain on their finances.
Even the staunch defenders of the MLM industry admit that the enterprise is not for everyone. You might not have what it takes to be a good salesperson. Neither does everyone have the same risk tolerance for what an MLM business entails. If that's so, then you might be better off doing something else for side income.
Although not without naysayers, the MLM business can still be profitable. With time and a lot of work, you can create a healthy network of affiliates and a stable customer base. The best part is that a legitimate MLM is often much cheaper than most other franchises. Coupled with a low overhead cost, you could still make a fair amount of money on the side if you do things right.
“Running your own business” lies at the core of MLM marketing. However, single proprietorship businesses such as these are no joke. To succeed in the MLM business, you must act like a businessperson. This means making intelligent choices and analyzing each of the risks. This begins long before you sign up for the MLM.
One of the main appeals of MLMs is wholesale discounts. For a single, up front payment, you can get wholesale prices for everyday item you use.
This should be the first thing you do before accepting any MLM offers. Don't let the glib words of a recruiter win you over. Extensive research on any MLM brand name can reveal a lot about their product, their reputation, and their customer reach. Here are a few questions you should ask:
You would be working with these people a lot if you're in it for the long haul. Choose a company to keep. The last thing you need is to be left holding the bag when things go wrong.
Research can also help you identify the telltale signs of a pyramid scam in disguise. This will save you a lot of time and effort in the long run. You'd be a lot more confident pitching a company you personally trust with others. Here are a few other questions to identify a shady MLM or an outright scam:
It helps that you get an MLM company that distributes products you would use yourself. Be your product's biggest fan and get people to like your product in turn.
Whoa there, partner. Don't rush to get everyone you know on board. Rushing into your new enterprise is a recipe for disaster. Most of the crucial mistakes in an MLM horror story emerge from diving into the business too fast. You'll be flying blind.
The industry is partly to blame for this. Most marketing frames MLM as a quick way to make big bucks. In truth, the big bucks come only with dedicated work and smart decisions. These are not something you can expect within the first month. Neither can you get it through relentless recruiting.
Too often, people join an MLM without any thought of long-term planning. You may be your own boss, but you're also your main employee. You become a salesperson, accountant, and branch manager all in one. Before you join, you must be prepared to take on these roles. Most important of all, you must factor all this in your time.
Many MLM distributors fail to consider the importance of market research. Take care to analyze your market. Before you sign up, you should first decide whether the products are easy to market to your community. Some products resist saturation and have a ready market. People are always going to need makeup and new clothes.
Location also matters; isolated communities have fewer shopping options, but cities have a larger customer base.
Use the demographics of your locale to your marketing advantage. Chances are, this is a lot easier than selling to the greater crowd. Your target market should already want to buy your product. They just need you to be there.
The same is said when you're looking for other distributors. You should select a potential recruit based on how well you think they can perform. Are they persuasive sellers? Are they willing learners?
Always remember: Quality beats quantity in the long game.
Many people today have a low opinion of MLMs. They're all the same, so the cliché goes. Break expectations and the mold by framing your business as something different. Ask yourself what solution your franchise provides, what and its products offer your customers. How would you want your franchise to be known?
Be honest with what you're selling. Know what the product is and what you're offering. Do not fall into the same dishonest fanaticism that other MLM distributors stoop to.
Education and guidance are your biggest allies in long-term MLM success. Learn from those within and outside the industry. Newcomers to MLM have a greater chance of success by learning tried and true methods from established distributors.
You don't have to look far to get training, though. Many of these techniques are available from your training materials. Other tips can be found in other MLM communities. A good upline would often be your first and best mentor in the business.
The Internet is littered with horror stories of people entering an MLM only to leave as abysmal failures. These include tales of destroyed relationships, crippled finances, and days of constant stress. These have become common that the MLM community has acknowledged their constant presence.
Most MLM disasters revolve around people committing critical mistakes in their business. Distributors try too hard using wrong techniques. They obsess over their business to the detriment of their finances. They are also motivated on expansion and fail to develop the teams below them.
When you become an entrepreneur, you take on the risks and challenges of marketing your business. Being your own boss means you should be your own employee. Wouldn't you want to take care of your needs? Focus on developing a healthy work–life balance. Make time for self-care. Don't give up all your free time.
If you're still starting out, do not be in a hurry to ditch your original job. Chances are, you're only making residual income for the first few months. Do not consider doing MLM full time until the income you make surpasses your current job.
While developing your MLM network is important, it should not take precedence over the things that matter. No job or business is worth sacrificing your health and family life.
Too often, MLM distributors end up marketing to anyone within their radius. Following this approach will make you seem annoying and unpleasant to be around. This is not what you want. Try too hard, and you might find yourself annoying your friends and family. By pushing your business too hard, you end up alienating the people who trust you the most.
Be persistent, not pushy. Nobody appreciates the one guy who pushes a product or opportunity in their faces. Accept when family members and friends say no (or, for that matter, never). It's not the end of the world. The sooner you acknowledge the reality of rejection, the better you will handle it moving forward.
Excess inventory is another frequent issue encountered by MLM sellers. Not a few sellers overestimate the number of products they sell and overstock. This can lead to trouble offloading the inventory, especially if sales don't match demand. Pressure selling from less scrupulous companies or uplines can exacerbate the problem.
Never overstock on inventory. Take in only as much inventory as you can realistically expect to sell. Avoid restocking until most of your inventory is close to selling out. Reconsider an MLM that demands a minimum inventory.
All successful business people use the interplay of supply and demand to their advantage. Always have a little more demand and your products will sell well. No sane business owner would insist on overstocking. This is an important lesson that you should also impart to your downlines.
You can expand your market reach by tapping into social media. The days when you had to rely solely on gatherings and going door-to-door are over. Be where your customers are looking and set up shop online.
Mentorship is a key component of MLM. This, sadly, is lost among many eager distributors. They often leave downlines to their own devices. Most problems associated with MLMs hail from these so-called orphans. This approach to recruitment quantity is a recipe for disaster. If you suspect that your upline is too focused on recruitment, reconsider signing under them.
Remember, MLM is all about cultivating a network that works for you. You gain as much from your downlines as you do from your own efforts. Once you're in a robust position, your network is your greatest asset. Each of these prospective distributors need guidance to build their own business. Pay it forward by mentoring them in turn.
So you've generated a fair amount of side income through MLM or other means. What now? If you're not paying off debts, you can invest it toward retirement. Now that's earning without effort!
Jose Abuyuan is a web content writer, fictionist, and digital artist hailing from Las Piñas City. He is a graduate of Communication and Media Studies at San Beda College Alabang, who took his internship in the weekly news magazine the Philippines Graphic. He has authored works professionally for over a decade.
