Is there such thing as MLM Residual Income? Personally, I’d answer that question as “yes and no.” But before we get too deep into that, let’s talk about residual income. Personally, I define residual income as Make money that keeps coming in month-after-month, and year-after-year, for something you did one time.
For instance, an author writes a book and gets it published. Each time the book sells she gets a small royalty. If the book continues to sell, year after year, the author will continue to get royalties. But once the book STOPS selling, no more royalties will come in. Does that make sense? Another example is insurance agents. They earn residual income when they sell an insurance policy. They earn an up-front commission and will also earn a residual income when the person renews the policy each year.
Residual Income Definition
Residual income is the amount of income that an individual has after all personal debts, including the mortgage, have been paid. This calculation is usually made on a monthly basis, after the monthly bills and debts are paid. Source
How does residual income work in network marketing? Hypothetically, you could build a large sales organization and earn commissions and overrides off your entire sale organization, based upon it sales volume. Assuming no one quits, and people continue to order the products, your MLM Residual Income would remain constant. Of course, this is a hypothetical example.
Hypotheticals are possibly situations, statements or questions about something imaginary rather than something real. Hypotheticals could deal with the concept of “what if?”‘. Grammatically, the term might be a noun formed from an adjective, and the word might be pluralized because it refers to the members of a class of hypothetical things.
In the real world, it isn’t that simple. The biggest reason your chances of earning a constant and stable MLM Residual Income is unlikely is because of attrition. In this industry, nearly half the distributors quit each year. That means that your organization would gradually get smaller, each month. Eventually, your “organization” would get very small, and so would your bonus check. The only way to keep your bonus check growing is to keep sponsoring new distributors.
Most top earners have to keep building their business forever, because of attrition. If they stop building their organization, they will stop making money. On a side note, please know that attrition is normal in any industry. Car Salesmen, Insurance Agents, and Real Estate Agents all have a high percentage of attrition. It’s simply inevitable in the sales profession.
So, if you want to earn a large MLM Residual Income, you really have two choices. Your first key to success is to always sponsor new people. That doesn’t mean you have to work your business “full-time” forever. Instead, it just means that you need to keep sharing your business with prospects. This will help offset the turnover. Please realize that insurance companies constantly recruit new agents. And car dealerships constantly recruit new sales personnel.
Your other option is to team up with a Top Tier MLM Company. A Top Tier MLM Software Company pays you a large up-front commission. This means you earn as much of a new recruit up front, compared to what might take three years to make off the same person in a traditional MLM Company. Since most distributors quit within a year, I think it’s a good alternative to traditional MLM (Multi-Level Marketing)
All things considered, I still think that owning a MLM business is a wise move. Even with the turnover and attrition, you will still earn a nice residual income each month. However, to create long-term residual income, you must continue to sponsor new distributors each month. Or you can forget about MLM Residual Income and join a Top Tier MLM Traning Company.
On a side note, I would love to hear from you. What do you think about MLM Residual Income? What type of success have you experienced? Please share your story or testimonial with the rest of our online community. Thanks.
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