So, I was talking shop with a woman at the gym the other day. We were sweating on the treadmill, each yucking it up over Ellen, and we started chatting it up about kids, the weather, and then the conversation turned to what we did for work. As it turns out, we both work for network marketing companies. Out of respect for this woman, I will not divulge the name of her company, but I will illustrate some pretty basic (yet astounding) examples of how the power of geometric progression can either work FOR you, or very much AGAINST you.

So, for those of you that are unfamiliar with network marketing, you are paid on a combination of leadership and volume. The higher the amount of people on your “team” and the greater the amount of product that flows through, the more money you make. It differs from Corporate America in the sense that the money you make in Corporate America is very much a linear income (you clock in and out each day for a set salary regardless of how much you work and your pay only marginally increases with yearly raises). Network marketing, when done right, puts the power of leverage to work for you and you get paid on a little bit of your work and a lot of your team’s work. It is a beautiful thing if you can be open-minded enough to explore it.

Now, after conversing with this woman for a while about how long she had been doing what she was doing (not that long), why it was attractive to her (she got laid off and didn’t want that to ever happen again), and why she picked Company X (she thought of it as girl-bonding-time and liked the idea of earning a free trip someday), my wheels started turning. We had an interesting, and certainly revealing, conversation about compensation plans. Having gone to the best high school around and after working at the #1 college for entrepreneurship for 12 years, I like to think I know a thing or two about both math and business opportunities. I certainly left that conversation realizing that “I ain’t no dummy!”

Granted, this post is probably geared more towards those who are involved in the growing trend of network marketing — but all of you corporate folks should sit up and take notice because most of you are probably not earning the kind of money you deserve to be earning. You might like to know that there is a really viable vehicle out there that can set you free! So after speaking to Woman A about Company X, I started doing some math in my head and I was ASTOUNDED with the results. My advice to all of you is to research the company and really delve into the compensation plan before you start contacting your friends and family, because a lot of you out there are getting screwed, to put it bluntly.

Let’s look at a very simple exercise in multiplication to see if the power of geometric progression is working FOR you or AGAINST you in your home-based business! Here is how I can confidently make these statements:

  • For the sake of argument and easy math, let’s take a basic network marketing structure, using multiples of 4 for simplicity.  So, you find 4 people, and they each find 4 people, and we will replicate that 6 levels deep. One cannot argue that the deeper you go, the greater the number of people on each level, right?
  • We will use the very round total of $10,000 a year as the amount of volume that the people on your team are producing.
  • I am using Nu Skin’s actual compensation plan, which pays 6 levels deep – against a theoretical “decreasing” compensation plan which also pays 6 levels deep (this comp plan pays you LESS the deeper you go).
  • It should be said that no organization duplicates into perfect multiples of 4, but it should give you a rough idea as to how much money people from other companies are leaving on the table.
  • It should also be noted that most other companies do NOT pay 6 levels deep. That’s just a fact (and an unfortunate one because that is where most of the money is).
  • One final note: Nu Skin’s compensation plan is a willable asset — yes, I can pass my business on to my children, long after I am done actually working. Does your Company X or corporation do that?

Take a look at these diagrams and be prepared to be BLOWN AWAY!

Nuskin compensation plan


Or you can download the full comparison here: Download SalaryComparison2011

As you can see, upon closer inspection, the people from Company X are literally leaving MILLIONS OF DOLLARS on the table each year!! I don’t care how many free trips a company is willing to offer (and Nu Skin offers plenty of handsome all-expenses paid trips!) — I would much prefer the cold hard cash! For all that extra money, the Nu Skin teams will be able to buy their very own tropical island paradises and get away whenever they want to! My advice: stop falling for gimmicks and start maximizing your income! If any of this has made sense to you and caught your attention, I am here to give you additional information.

Here’s to your success, regardless of where you choose to hang your professional hat!