Three Types of Direct Sales Compensation Models

Compensation is the payment or profit given to someone in exchange for a work or sales done to a certain company or business. It could be in a form of salary, incentives, commissions or percentage, benefits and so on. In direct sales industry compensation models are set up as single level or multi level compensation. In single-level compensation plan representatives are paid solely on one’s sales while in multi-level compensation plan they earn commission on both their sales and of those they bring into the company. Direct sales business needs the right compensation model in order to work, MLM software companies offer these plans with a suitable MLM software pricing created for specific clients. There are a lot of variations of compensation plans out in the market and each one of them also has its different MLM software pricing depending on the model and the software company that created it. Each of these compensation plans are extracted from different major types of compensation models.

Let’s discuss 3 types of compensation models. First is the Unilevel or single-level plan this is also associated with the so called stair step break away plan, here the recruits or representatives does not grow or advance in position other than as distributors, so basically they just earn according to their performance without any promotion or advancement. However a breakaway plan is still considered unilevel but with the flexibility to encourage and motivate distributors to perform well in order to advance in rank after meeting a certain goal. Next is the grid or matrix plan the representatives here is limited only to a certain number of recruits. There is practically an automatic filling of spots; usually it works well with companies whose products are used personally by the distributors than being sold to other people. Lastly we have the so called binary or multi-level plan the distributor here is allowed to occupy one or more business centers each limited to two down line legs. Compensation here is based on group volume rather than percentage of sales of multiple levels of distributors. Meaning payment is volume driven and not level driven. Sales are being balanced in both legs to qualify for commissions, which in turn are paid at certain points when target levels of group sales are met. Here group cooperation is encouraged it requires team work because payout is on group volume and requires balance in each leg to be eligible for payout.

Choosing the right compensation model and software that has the ideal MLM software pricing offered by different software vendors is an important factor to consider guaranteeing success in the direct sales industry.

Selling in America – Avoiding the Carnage of Direct Marketing

Does this person really think I’m interesting? Does he truly like my work? Does he honestly believe I have a beautiful family?

Having your ego stroked felt good, but now as you lie in bed late at night, a dark feeling creeps into your awareness and the primal instincts that have protected human beings for eons gradually convinces you that you’re under attack. Not by a hungry saber-toothed tiger or velociraptor, but by something much more insidious – one of your own.

Soon, you begin to realize that the person manipulating your ego was vying to achieve a goal, and that his entire persona was nothing more than a meticulously crafted sales presentation – from his fine clothes, to his quick laugh and easy smile. And then that sinking feeling arrives, plummeting you ever deeper into your fears and insecurities – Am I interesting? Am I good at my work? Am I a successful parent?

Typically one can gauge an organization’s priorities by how it utilizes its resources. The same goes for America. By far, the highest paid jobs in America belong to sales professionals, which makes sense since we are participating in a consumer driven economy. America rewards those that keep products and services moving, but as we have recently learned the hard way, lapses in oversight, particularly when it involves sales incentives, can have a crushing effect on society. The benefits of a consumer driven economy are obvious – it’s made America the wealthiest nation on the planet, but the culture of “get rich” seems to have eroded the principles of what America was built upon, and sales professionals are getting the blame.

Is it truly the American way to reward individuals and measure success by one’s ability to push products and services by any means necessary? Utilizing well crafted sales tactics designed to manipulate the human ego, or by outright attacking the fears and insecurities of sensitive and well mannered consumers?

Good marketing organizations know this is not the case, but they are also acutely aware of the fine line between selling the benefits of a product or service and exploiting the egos and insecurities of consumers.

The smooth skills of sales representatives are expected to a degree, but what happens when the pitch comes from a friend?

Blurring the line between family, friendship and building your Multi Level Marketing network.

In the late 1980′s, Tonight Show host Johnny Carson asked his guest, Donald Trump, what he would do if he lost all his fortune. Donald replied “I’d join Amway.” Even though the crowd booed, mainstream America was introduced to the possibility that direct marketing might be a viable way to generate income.

Since then, a barrage of direct marketing programs have been unleashed on society incorporating a variety of products and services. As a result, individuals have been tapping into personal relationships in order to expedite growth and income, which bids the question:

Is Multi Level Marketing a channel for average citizens to gain financial freedom and independence, or an insidious attack poisoning the very fabric that good community is built upon? Are consumer based “relationships” infiltrating the foundation of openness and trust of family and friendship?

The cost of “gaining independence and fulfilling your financial dreams” through direct marketing is often at the risk of losing what is of the highest value to most Americans – the love and respect of family and friends. Not because they disapprove of what you are doing, but because you’ve somehow tainted a personal, trusting relationship – a relationship that may have taken years to build – by reducing them into a consumer.

The claim “word of mouth is the best advertising there is”, which is at the cornerstone of direct marketing, should contain the caveat “unbiased word of mouth”. If someone has something to gain from personally promoting a product or service, it is no longer “word of mouth”, it is simply deceptive advertising. Unless, of course, the salesperson acknowledges the fact that he is benefiting from the sale and perhaps can even offer the same benefits to you. Which leads us back to this – if Multi Level Marketing is presented in an open and honest way that respects and honors the personal relationships it relies upon for its success, does it have the potential of providing significant benefits and rewards for all participants as a viable marketing and income solution? Since my personal experience with direct marketing is limited, I don’t know this to be the case, but I suspect there is a chance it may be true.

Whether they are aware of it or not, most MLM’s operate with some degree of deception. If you want to test this, simply ask a direct marketer (preferably one that has approached you) how much profit he is making. There are many reasons why he may not want to answer, but the fact remains, if someone is trying to enlist your talents, time and effort as a partner into his enterprise he should be prepared to answer all of your questions and concerns to the best of his ability. There are many legitimate “honest” answers to why someone isn’t performing well at the moment in any business, if that indeed is the case.

Hard Selling (see its definition below) has given the sales and marketing industry a bad rap, even as highly targeted and relevant search tools like Google are forcing unscrupulous sellers to clean up their act or be forced into oblivion. While it’s imperative that professional marketers continue to keep the faith and resist the temptation into deceptive advertising, it’s even more critical that the potential carnage of sullied relationships within American communities resulting from unadvised multi marketers be minimized through education, the practice of moral principle and some degree of private regulation.

Hard Selling: (Business Directory.com) “Applying psychological pressure (by appealing to someone’s fears, greed, or vanity) to persuade the prospect to make a quick purchase decision. This approach is justified on the ground that most people are lazy and will postpone making a decision-even if it were in their best interest to make the commitment. This practice is, however, reviled when its sole purpose is the salesperson’s gain at the customer’s detriment.”

Basic Elements in Measuring E-Mini Market Strength

There are very few e-mini trading sources that don’t, at some point, emphasize the importance of trading with the trend. This article is no different; I highly recommend focusing on trading with the trend. However, not all trends are created equal and every trend begins to falter and finally reverse. Obviously, the best time to be trading the trend is when it is peaking and not when it is declining and strength.

But how do you know when and e-mini trend is especially strong and when it is entering a weak phase?

Interestingly enough, I generally show a high level of disdain for indicators and oscillators as primary tools for entering and exiting e-mini trades. On the other hand, indicators and oscillators are especially useful in developing an understanding of the underlying strength of a trend. As a trend lengthens, I tend to look to my indicators to see if there are any divergences in trend indications and price movement. For example, if the price has been rising in a trend and been confirmed throughout the course of the trend but began to show divergence (divergence would be an oscillator moving in a direction opposite the price movement, in this case) I start to become suspicious about the strength of the trend. While divergence signals may not point to the exact bar where the trend will in end, it should put any competent trader on notice that the trend is weakening.

When divergences begin to develop, there are two possible outcomes; the trend will resume in direction and strength or the trend will continue to falter and decay. Of course, repeated divergences in succession and on different indicators or oscillators would certainly put me on notice that the possibility for a trend change could be in the offing.

Additionally, I think it is important to keep an eye on volume during a trend. When I see a marked change in volume, especially with an increase in volume, my suspicions become even more pronounced.

A simple observation of the price action as the trend progresses can also yield significant clues as to the strength of a trend. Usually the end of a trend is marked by ragged price action and deeper retracements. You will often see the divergence of price action and an indicator as the price action becomes more ragged. A trend line will emphasize the weakening price movement, especially when the retracements stop at closer and closer intervals to the trend line, or temporarily violate the trend line.

As you can see, there is no single factor that I use in determining the strength of a trend line. I use a constellation of factors that relate similar information to determine the underlying strength of a market trend.

In summary, we have had a very brief look at market strength and trends and identified some factors that may indicate the weakening of a trend. Those factors are divergent indications, volume fluctuations, and erratic price action. Once the directional movement has slowed it may form a channel or reverse direction. Only observation will give you, as the trader, the proper information on which to act. Don’t trust any one indication of a weakening trend, but look for concerted indications of a change in price direction.