Profit Sharing: Multi-Level Marketing

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Who gets a share of the profits in the normal business world? The recipients will be the owners and the directors of the various distribution businesses, and maybe the salesmen employed by the manufacturer and wholesaler.

Very rarely will the retailer’s sales staff share the profits, however excellent and hardworking they maybe. They will probably earn exactly the same as their colleagues who avoid work whenever possible and whose attitude loses the firm many customers.

in any case how much profit is there to be shared in a normal company? A large proportion of the profit will be spent on advertising, salaries, premises, stockholding, administration, and a hundred other costs. The marketing of a new product can cost millions of pounds in advertising and promotion.

In contrast, an MLM company’s costs on these items will only be a small fraction of a normal company’s outlay. Virtually no advertising is used , and salary costs do not include sales persons as none are employed, so administration is therefore far less.

These savings, plus, of course, the company’s profit on the sales of goods to it’s distributors, based on the sales performance of the organizations developed by each of them. In this way every distributor is paid in direct proportion to his or her efforts.

Reference; Peter Clothier: 2nd Edition

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