This free online MLM Income Calculator will forecast your monthly multi-level marketing income based on your associate recruitment and sales volume projections -- through up to 10 levels.
And be sure to view the summary when you're done to see how many new associates will need to be recruited each month to compensate for the drop out rate.
Before we use the MLM Income calculator, you would be wise to take a minute to consider some important points that you won't hear from the sales person who's trying to sell you on the idea of joining.
No matter how hard others try to convince you otherwise, joining a MLM company means that you are a commissioned sales person, not a business owner. Business owners have the ability to make company decisions, commissioned sales people do not. And one of the decisions you won't have a say in, is whether or not the MLM company decides to go out of business.
Imagine spending months or years to build an MLM organization and a respectable income, only get a notice from the company owner stating they've decided to go out of business. It happens all the time.
Like any other business, you can expect to put in many hours of work before you see any profits. It takes the average business two years of long hours and hard work before they start seeing profits, and another year or two before the owners can claim they're making more money working for themselves than they could working for someone else.
If you decide to become a commissioned sales person for a MLM company, be sure to keep track of every hour of time you spend learning and working on building your commission check. Also keep track of every expense you incur along the way. Expenses to track include expenditures for things such as sales kits, marketing material, demo products, advertising, long distance calls, gas and wear and tear on your automobile, and so on.
Why keep track of all the time and expense? Because you won't be able to claim you've made a profit until your cumulative commission checks total up to more than what it cost you to build the commission checks. And that includes an amount for what your time is worth (you could have earned a wage with those hours).
What causes the average, otherwise shy person to suddenly think they can be a wealth-generating salesman? Because someone showed them "the math." I'm sure you've heard it. All you have to do is find 5 people to join, and those 5 will find five, and those five will get five, and 6 months later you will have 20,000 people working for you, and you'll be earning $10,000 per month. Really?
Here's the reality. Using the 80/20 formula, in order to sign up 5 people you will need to start with a list of 125 prospects. Why? Because of the 125 prospects only 20% (25) will agree to hear your sales presentation. And of those 25 only 5 (20%) will join. But wait, did you know the average MLM associate quits after just 4 months? That means that you will need to recruit 5 new people (another 125 prospects) every 4 months just to keep from going backwards. And guess what, this applies to your entire organization! (The MLM Income Calculator will alert you to 80/20 numbers when you click the "Show Summary" button.)
Don't get me wrong. I'm not trying to discourage you or tell you it can't be done. I just want you to know what the MLMs sales-presentation isn't going to tell you. The truth is, all sales-presentations are manipulative and misleading, because they exaggerate and emphasize the positive aspects of buying, while downplaying and ignoring the negative. My mission is to alert you to what the sales-presentations aren't telling you (the negative) so that hopefully you can make more informed decisions.
The minute you approach a friend or family member with a business proposition, an element of trust is lost that may never be reclaimed. It's a no win situation. Your friend or family member will always feel guilty for either turning you down, or for not working as hard as you think they should be. Sure, your friend or family member might beat the odds and actually end up thanking you for showing them the opportunity. But do you really want to take the chance they won't?
In my experience, what separates happy, successful people from unhappy, not-so-successful people, is successful people tend to choose to pursue a work they are truly and genuinely passionate about -- irrespective of what that work might pay. They don't need to be told to study, or practice, or work harder. They do all those things on their own because there's nothing else they would rather do!
One of the primary problems with MLM opportunities, is that you end up with an organization full of people that constantly need to be motivated ... because selling your product is not what they've dreamed about doing with their lives. In other words, they didn't choose to be part of your organization because they were truly and genuinely passionate about selling your product. The only reason they chose to sign up, other than perhaps not being able to say "no" to pressure, was for the money. Unfortunately, they quickly learn (usually within 4 months) that it's going to take a lot of unenjoyable time and effort before they see any significant amount of money.
The next time you are being presented an income opportunity, I encourage you to ask yourself this question. If money were no object, would I agree to volunteer to perform this work full time, free of charge? If the answer is "yes," it's worth further investigation. If the answer is no, I suggest you keep looking.
With that, let's use the MLM Income calculator to estimate your monthly income based on your recruiting and sales projections. Please be realistic, conservative, and most importantly, be honest with yourself.
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Average monthly sales volume per associate: The total monthly sales volume of all associates in an MLM organization, divided by the number of associates. Typically average sales volume runs between $45 and $65 per month per associate.
Auto Fill: This is optional, but if you would like the MLM income calculator to fill the # Assoc. column for you, enter the percentage you feel others in your organization will duplicate your efforts (probably only about 20%), enter the number of associates you will personally recruit, enter the number of levels to fill (max of 10), and then click the Auto Fill button. Please note that this feature will stop filling levels once the number of associates exceeds 1 million. It actually should stop long before that, but I set it to 1 million to cater to the pipe dreamers.
Level column: If you personally sponsor an associate into your organization, that person will be in your first level. If that new person then sponsors an associate into the organization, the newest person is said to be on your second level, an so on. The first line of the MLM Income Calculator is you. Each subsequent level represents those brought into your organization by a person in the level just above them.
Comm. % column: Your commission percentage for each level of your organization. Leave levels blank that are not applicable to your MLM structure. The MLM Income Calculator multiplies the decimal equivalent of your commission percentage by the sales volume in the corresponding level in order to calculator your income for each level.
# of Assoc. column: The number of associates/partners you plan to have on each level. Keep in mind that the average person will quit after 4-months, so you will need to continually motivate your organization to never stop recruiting. Clicking the "Show Summary" button at the bottom of the MLM Income Calculator will translate what the drop-out rate might mean to your organization.
Monthly Volume: The first line (you) is where you can enter your own monthly sales volume. The numbers in the remaining levels in the Monthly Volume column are the calculated sales volume totals for each level, based on the number of associates and the average sales volume per associate. The fields in this column are automatically recalculated as you make changes to input fields.
Monthly Income column: The numbers in the Monthly Income, column are the calculated income totals for each level, based on the commission percentage and the total sales volume for the corresponding level. The fields in this column are automatically recalculated as you make changes to input fields. Please note that the MLM Income Calculator will stop calculating once your monthly income is over $100,000 per month. Anything even remotely close to that is completely unrealistic.