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?
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Great article! I could not have said it better myself. Those who become a part of an MLM company need to know that “do a little - earn a little; do a lot - earn a lot.” What other type of business will pay you what you are worth? MLM is all input=output. Again, great article!
This article is so right on! We say we want paid fairly without “caps” for work well done. That is exactly what happens in a good MLM! The choice is whether to be productive or not to be. Thank you for perspective!
I have seen it happen over and over again, the people who are the most productive are the ones who earn the money. The ones who sit there and do nothing, earn nothing. No matter when we join the company.
Anything in life takes time to make money. MLM is the only business that allows you to make money based on your efforts. I make more money than some of my upline because I work the system. If you are willing to work MLM business you can make unlimited income, what J-O-B can you find that promises that?
Awesome article. With MLM, you can write your own paycheck, but you got to work and learn and learn and learn.
Can anyone honestly show me a business where the people at the top don’t make more than at the bottom. I think this is more ethical than anything because with MLM you can actually make more than the person who introduced you to the business. This a great industry to be a part of for sure!
Great presentation! If for some reason anyone does not understand this, it is only because they have a closed mind. Keep up the great work. I will be sending many people to this site.
Great presentation! This information is very much needed. Keep up the great work. I will be sending many prospects to this site.
I love the fact that I can out produce and earn more than the person who introduced me to the industry. Another great article.
Excellent article. I know first hand, networking is indeed networking, not “NOTworking” People have bypassed their upline team members just by doing thier own due diligence.
I have seen it in my own team.
How well you express these ideas. Lets make sure as many as possible get the chance to read them. Thank you.
Another excellent presentation of the facts about MLM. Tim makes it seem so simple and natural, which of course it is. What a great tool to have at our fingertips to send the doubters to. Thanks again, Tim.
Wow, I can’t wait for teh next guy who asks: “is this an MLM?” Can I copy/paste your info if it is word for word? I would love to forward this info to a few people. Thanks, caleb
I have seen people that I bring in make more money than me! I just love when that happens!
Well put and very graphically so! Truth is MLM offers people a chance to get out of the box - if only they’d firstly think out of their box and then take steps to climb out of it. MLM - unusually - offers them a ladder to do that and folks will even steady the ladder for them. If only they’d take the necessary steps.
At last, an authority to answer this question that doesn’t sound like me trying to convince them! Thank you Tim
I so believe in this industry and the compensation plan, should be in every organization. You get paid on your effort. No effort, no pay. Lots of effort, lots of pay!
Tell that to someone digging a ditch!
Real wake up call; chances are the ‘friends’ who are telling you not to join an MLM company ARE NOT part of the .0001% real wealthy individuals who I would listen to.
Very clear and easy to understand. Thank you Tim for making such a big difference for the MLM community.
Concise, no-nonsense explanations I dare ANYONE to refute.
Really opens peoples eyes to how the system really works.
I think the difference is that when you go for a job interview at a corporation, no-one offers you or leads you to believe that you will earn the salary of the CEO within months. You know what you are in for and that you will have to put in some hard work if you ever want to be CEO. At many MLM companies they “sell” you the concept of “being wealthy” - nothing else really - many times without being transparent about how close to saturation the company is and how far removed you will be from the big earners.
Oh, Tim, this is GOLD! And to think you used to practice communicating to a stuffed bear! You’re definitely one of my MLM Angels.
Madelein
Regarding your comment that MLM companies sell a concept without letting the worker know how close to saturation the company is: Do non-MLM companies tell new workers at their interview how close to downsizing they are, and that they would be first to go when it happens. When you find the utopia we are all looking for: post it here. Thanks
Thanks for the pure common sense that the only fair system on planet Earth to be successful & wealthy is through MLM. I love this industry & will do my best to uphold its image through your mentorship. Thanks a trillion Tim & God Bless…
Tim,
Another great educational article! Unfortunately, I can see by reading a post above that some people still don’t understand that the “myth” of saturatation is just that, a myth! Amway has never saturated! When was the last time someone was asked to go to an Amway meeting? You are correct when you say that training is the answer to everything in MLM!
Dave Thompson
Nashville, TN
This tells it all! Great analysis of the compensation systems.