In MLM, Are the People At the Top Making Most of the Money?
Sometimes people think that in MLM (Network Marketing) only a few people at the top are making most of the money. Is it true?
This is actually true…but it’s no different in other businesses, in other industries, or in other countries!
If you research the traditional executive and owner compensation of most companies, you’ll see that “only a few people at the top make the majority of the money” in every business model.
CEOs of large U.S. companies last year made as much money from JUST ONE DAY on the job as average workers made over THE ENTIRE YEAR. According to an Associated Press survey of 386 Fortune 500 companies in 2006, the executives averaged $10.8 million in total compensation, over 364 times the pay of the average American worker.
The average U.S. worker made $29,544 in 2006. In the same year, the average CEO earned $10,800,000. In every industry “a few people earn most of the money.”
In the 2005 US Census report, almost 70% of US households earn under $25,000, while only 5.8% earn over $150,000. So only 5 percent of all US households earn over $150,000.
But $150,000 is by no means the “top earnings” of the wealthy! According to the World Wealth Report by Merrill Lynch & Co, in the US and Canada there are 30,000 people with investment assets of more than $30 million. Those 30,000 people represent only .0001% (that’s one-hundredth of one percent) of the total population.
Don’t complain about this – be one of them! People who complain that, “The people at the top are making most of the money,” are either justifying why they have failed, or justifying why they have never tried.
The more important thing to understand and focus on is that MLM compensation plans are designed to reward production: do a little – earn a little; do a lot – earn a lot. How else could you possibly compensate people? Do a little – earn a lot? That’s the welfare system.
MLM pays based on performance standards. If you perform to a certain standard, you earn whatever that standard or level pays. How many people will achieve this? However many perform to the standard! An MLM company puts NO RESTRICTIONS on anyone. They don’t say, “We will only allow 10 people to earn the top level of commissions.” They don’t look at the school you attended and decide what you’ll be paid. They don’t look at your salary at your last job and use that as the basis of what they will pay you, as most employers do. An MLM company doesn’t even look at what “experience” you have. Whoever meets the required performance standards enjoys the benefits of that standard. Make sure to read How MLM works.
Another variation to “People at the top make all the money” is “The people who get in at the beginning make money off the people who come in later.”
In what business does this NOT happen?
If you work for a traditional company, didn’t the owners get in before you? Aren’t they earning money off what you do?
MLM (Network Marketing) is very different when you really understand it. There are people in my organization (in my downline) that make more money than me. Isn’t that odd? But it’s the truth! The fact is, it shouldn’t be odd. The truth of the matter is the people who earn more money than me SHOULD! They’re obviously more productive than I am.
You may also be interested to know that one of the largest overriding factors in the legal decision that MLM (Network Marketing) is a legitimate business was that Amway proved to the courts that there were people in their business who made more money than the people who came in BEFORE them. People who join the business in year TWENTY can and do make more money than people who got in during year ONE.
You might be interested in reading: Do most people fail in MLM?
About the Author
Tim’s experience in building his own downline of 56,000 network marketers helped him develop his signature training series. A public relations ambassador for the network marketing industry, Tim has also dedicated his time to debunking the false information spread about the network marketing industry.