For a direct selling business to be profitable, it must have healthy gross margins. While margins can be calculated in several ways, at Sylvina Consulting we like to use what we call the “multiplier.” The multiplier is a ratio calculated as the suggested retail price of an item divided by the landed cost of the…
Should You Have A Hero Product?
A hero product is a product that is responsible for a large percentage of a company’s transactions or sales. A prospective client asked me recently: “Should we have a hero product?” My first answer was, “Yes, you should.” But then, I thought about it some more and changed my answer to, “Maybe.” You see, having…
Compensation Plans: Structure Matters
In compensation plans, there are positions of achievement we call titles or ranks. To qualify for them, independent representatives meet volume and structure requirements. Both are measurements of organizational performance. A volume requirement is a measurement of volume from (a) an individual independent representative, (b) a group of independent representatives within one’s downline, or (b)…
How Much Is A Distributorship Worth?
A business is an asset with a revenue stream which can be purchased or sold. Businesses can be valued in a number of ways. One way to value a business is to use SDE (seller’s discretionary earnings). SDE includes the net profit of the business plus any personal income, discretionary income, one-time expenses, and owner…
5 Ways To Get More Customers
There was a time when network marketing companies sold most of their products to their independent representatives for their personal use, and this was not a problem. Back then, companies didn’t worry about having customers who were not representatives. Network marketing companies focused 99% of their attention on selling products or services to their representatives. …
The Best New Year’s Resolutions
As each new year approaches, there is societal pressure to make one or more New Year’s resolutions. Perhaps you have felt it, or maybe someone has asked you what yours are. As direct selling, referral marketing, and compensation plan consultants, we feel the pressure to make resolutions, too. Most Popular New Year’s Resolutions According to…
Why Is Recruiting Like Panning For Gold?
Have you ever panned for gold? To us, recruiting is a lot like panning for gold. Everything looks like mud until you look closer. While most of your pan’s contents are mud, there may be little bits of gold in there, too. Don’t Prejudge It isn’t wise to make judgments about people when you first…
When Should You Pay In Products?
Wouldn’t it be great if you could pay your independent representatives in product instead of money? The good news is that there are times when product is the right form of compensation. Principles First One of the guiding principles of multilevel compensation is to keep within your compensation plan as large a portion of product…
3 Behaviors We Want From Our Reps
The average life of a direct selling or referral marketing representative with your company is short, unfortunately. Before it ends, we want to see two behaviors and after, we want to see one. Why Are Average Direct Selling Lives Short? By design, most direct selling and referral marketing opportunities are priced very affordably. We want…
Compliance Is Necessary
Compliance is never a favored topic. However, in the direct selling industry, it is a necessary one. When the public is provided with a product that is intended to be distributed and may attract high visibility, there needs to be company ownership. In fact, regulation states and legal action sets precedent that the company does…
The Rules of Recognition
As a direct selling company or a referral marketing company, one of your primary goals should be to attract and retain your independent sales representatives. Distributors and consultants are not employees who report to work each day with regular contact with their supervisors. They are independent contractors who are operating their own businesses. This means…
Why FTC Decisions On Vemma and Herbalife Matter To You
If your direct selling company has a multilevel compensation plan, it is in your best interest to be aware of the recent FTC actions against Vemma (August 2015) and Herbalife (July 2016) because your company and your compensation plan may have some of the same problems. Watch this video now to learn why these FTC actions…