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  1. #1
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    ROI - the acronym for RETURN ON INVESTMENT.

    Do you know what your ROI is for your Online business?

    Do you know what your ROI is from you cash expenditures and IF YOU INCLUDE YOUR TIME valued say at minimum wage, at $10 per hour and so on.

    Do you know what and when whatever you are doing is PROFITABLE or NOT?

    One of the main reasons I prefer MLM type deals is that the ROI once you get past a certain level ASTRONOMICALLY dwarfs all other
    business models.

    Here's an example: If I join a MLM program that costs $5 per month and I get $2 per month for everyone I personally refer and $2 on level 2 then if I personally refer 3 people I make $6 less my $5 cost for a $1 profit on my cash.

    This $1 figure is a 20% RETURN on my cash. If the 3 people I refer each get 3 people so they can be profitable and make 20% on their cash I make an extra extra $18. Now I make $24 less my $5 for a $19 profit - 19 divided by 5 is 3.80.

    What the 3.80 means is I have a 380% return on my monthly CASH investment. What investment, business etc are you getting a 380% cash on cash return from with only 9 customers?

    At some point in any MLM or network, the product whatever it is becomes irrelevant.
    What matters is just the network. You can throw the product away if you want. It dosen't matter because your ROI is positive.

    It's a huge point overlooked point about MLM and how they are structured. Most MLM pay palns are structured upside down. Just find the ones that are set up so you can get a positive ROI from referring say 10 or more people and you can make money hand over foot.

    Now, I DO think the product matters from a
    business perspective in that IF the product has real value, you will get more referrals
    and the network will offer increased value for being a member.

    So I paid the $60 to join It Pays To Learn when they offered it as an option to increase my return. Month one I made $485,
    month 2, I made $610. On my total $60 investment I have made so far $1095 and 1825% ROI. And I have another 10 months to go for my $60.

    Build Referrals is just started the $5 per month part of their program...so far I have made $160 the first month for my $5 - a 3200% ROI. And it's recurring I will make about the same or more every month as more people get a clue. And this dosen't count the over $2,500 I have made on their other stuff for a $40 total investment.

    Now Isagenix is another ballgame in terms of
    deals - It takes an Investment of $146 to get in the game. You get a big weight loss kit for the money. So, if you need to lose weight you use it or part of it, or you can throw it away. Who cares which? The company cares that you buy the product and build them a network so they can sell more products into the network. If you use the product great, if not there is nothing they can do about it.

    Now to GET any ROI at all from Isagenix you have to refer 2 people into the network. For this you will get $20 which lowers your costs to $126. When your two referrals get their 2 so they can begin making money you make $62.50 which lowers your cost to $63.50. When those 2 get 2 your cost is now $1. When those 2 get their 2 you make another $62.50. Now you have made $61.50 or a 42.12% ROI from making 16 total sales of which you MUST make 2.

    When you get to this point in the network, ANY 2 new sales generates you a check for $62.50 and the amount you make starts to double for each successive 2 sales.

    These sales can be new or re-orders. And you can choose to re-order or not as you see fit.

    And since the matrix is a 2xinfinity matrix everyone above you must eventually put people in your group. Some people will put in dozens even 100's because there is a provision of the plan that pays a matching bonus on the earnings of every one you personally sponsor.

    If you get in early in the game you simply cannot help but make money. You just have to get your 2 people and teach them to do the same. Who cares what they do with the product. It's the system of the network that matters.

    That's why MLM is 'da kind.' If you understand it in this way you can be successful to the max.

    What matters is what does it cost and how many referrals or sales must I make to be profitable. The key is how much on both accounts and what percentage ROI does this give me.

    Hopefully you will see the light.

  2. #2
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    The fact is Fred that I pulled in by myself 1373.00 from affiliate programs in March for the total costs of just hosting fees. No MLM involved. Not one penny was spent on PPC advertising or SE listings. Pretty lousy return is my spending so many unproductive hours on all these boards rather than jumping on these sites and making them into true selling machines for savvy shoppers.

    [ 04-28-2002: Message edited by: EcomCity.com ]

  3. #3
    ABW Ambassador webmarm's Avatar
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    LOL, I was just thinking of your ROI chorus this morning as I dragged myself out of bed to wake the kids after one more all too late night at the coding.

    "Self", I said to myself,"Remember what Fred always says about ROI. You're killing yours with these late nights!"

    Not that I'm cut out for MLM stuff. But I must get some sleep now [img]/infopop/emoticons/icon_biggrin.gif[/img] .

  4. #4
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    Mike...great. That's one node on your network to wealth. But what happens if you can't do anything, you get sick, you can't use your skills to make changes, update stuff etc.

    Now what....If you added a couple of simple MLM deals then you would have 3 nodes on your wealth network.

    The question is not how much you are making now - but how much more can you make doing what you are doing. One man shows are limited
    to the time one man can deal with the show.

    And affiliate marketing is an MLM business -
    the merchant level and the affiliate level and the customer level. But only the merchant has a vested interest in the whole network. The customer doesn't care. he dosen't like it, he finds another deal. The affiliate is caught between a rock and a hard place. If either one - merchant or customer fails he's SOL.

    Now if the affiliate was both an affiliate and customer then the merchant would be certain that the network would be intact and continue.

    And CJ is an MLM deal. MLM stands for Multi-Level Marketing. Multi means more than 1.

    You or any one else can play in the 3 node game - merchant - affiliate - customer. But how do you leverage it up without increasing costs and or running out of 24 hours.

    You solve that problem for me and we can own Bill Gates and Warren Buffet combined.

  5. #5
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    Fred.

    Having done MLM in the past, I can't see the proof in MLM.


    I believe MLM is only legal with a real hard proof product, touch feel, etc.And when I was in the business> My phone bill was high just teaching others, conference calls etc.


    Hmm Affiliate Marketing...just the price of a few domains, hosting, and internet, very few phone calls, and true overhead.

    I have a friend still doing MLM, and phones once in a while with another opportunity to tell me. he tells me hopefully he'll have made $300 or so this month with this one. And he still had to buy product out of it, and not including his phone bill.

    MLM is a big pyramid stucture. Most (not all) are designed to make only a few people great money, the rest are feeders.


    The biggest difference between MLM and affiliate marketing is MLM costs money to run, set up, and in my opinion costly.

    Affiliate Marketing... $8.95 for domain, $15.00 for domain hosting...That's less than $25.00 per month. The rest is your time and elbow grease. That's a low start for your pocket book for a home based business.


    I know there's MLM 's out cheaper than that to join and stuff, but those usually have no products. I would perhaps consider a great product to market if the right one would appear, but so far none I have found would be that benefical to me.


    I also think it depends on the person you are. I'm not good at hard selling, and can't take some one's last $20.00 for a hope and a dream.

    Find me an MLM that pushed product rather than the opportunity.

    I'm not going to share what I made in march but It's way more than anyone I personally know making in MLM, and I know quite a few people from back in the days when I did MLM

    The only MLM that I did well one was All Advantage.


    You said it your self fred, who cares about the product....it's the opportunity. So Give the company your money, and get nothing in return.

    This prespective it what gives MLM a bad name. Push the opportunity first. No one is ever allowed to just be a customer, push push push....Yuck...Glad the days are over.

    I know what my ROI, is and it's worth it.

    Example one site makes $1000 in a month. I work 1hour per week on that site. That's $250 per hour.

    This is my full time job......My justification .If I split it up like a full time job 5 days /week, 8 hours a day, and it works out to $15 or $50 dollars an hour...what is that worth? That $15 or $50 per hour is worth more as a business, rather than a real job in the real world....which to me means more....than a return on the dollar. I'd rather save money, and invest in real estate, and expand my adventures, than worring about the next MLM adventure of the week, or month. Just my two cents.

  6. #6
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    Yep.

    No doubt affiliate marketing can be profitable.

    And also, no doubt you have junk MLM deals out there and that most people couldn't sell water at Walmart prices in the Sahara desert.

    But, with the internet, if the site is set up to sell then it's simply a matter of directing trafficf to it - you really do not have to sell.

    In direct mail, you have the 'packages of words' sell the deal.

    Same on the net. The net makes it possible for people to succeed at making money from sales and MLM.

    I don't mean for everyone to just do MLM, that woould be stupid, but I really think, that OVER time, if you find the RIGHT MLM program and plug it into your affiliate marketing mix and treat it just as you treat
    one of yur best merchants, you will be better off than if you did not do it.

    For example: I pretty much focus on selling eBooks, ink, web-hosting, ebay, cordless phones and kitchen products but I always am testing other products and lead deals.

    So assume I have time to deal with 15 items or sites to promote. Since I test everything and you don't get promoted past month one if you don't make sales or a profit, I usually have about 7 regular affiliate deals working and 3 MLM deals and 5 more on test - ususally 2 MLM and 3 regular.

    If you find an MLM that is profitable, it ususally will continue to pay and you just have to keep it in the mix for the income to grow.

    I make money from abut 10 online MLM type deals and get some type of check every month.
    As long as they pay more than it cost to spin their banners and I have to payout and I can leverage what they are selling (like Click'n Promote), I stay in.

    Look at it like this (and I got this idea from a guy who makes well over $500k per year in Amway of all places). He said once you get past square 1 (profitable), look at it as if it's a sotck you bought that you will keep for 20 years. Then do whatever it takes to get it to grow at the rate greater than inflation. In his case he tries to get one person per month to join and buy just one product from him every month. He sells those Amway gift cards by the bushel basket.
    I tried doing Amway his way - made some sales but people always quit because they hate to sell or they figure the return is not worth it. So Amway wasn't an MLM for me.
    Mainly because you can't leverage the sales thru low cost marketing. But I found a few that make money and grow every month.

    MLM is no different from any other business or merchant you try - if it makes a profit you keep it. If it dosen't find something that does. The problem is people think because they failed at one MLM deal, it's the fault of MLM. WRONG. Failure is always YOUR fault. Mostly because when you fail you QUIT TRYING.

    Life is about successes and failures. To get paid millions in baseball you have to succeed just 3 out of 10 times as a hitter.
    Ditto in life. But you will never succeed if you don't get in the game and keep hacking away.

  7. #7
    ABW Adviser Panel Dynamoo's Avatar
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    Fred's right about one thing, when you factor in the cost of the amount of time spent on.

    MLM is *not* the answer though, and although schemes vary they all tend to exhibit the following characteristics:

    <UL TYPE=SQUARE><LI>There are a small number of people at the "top" of the scheme.
    <LI>In order to generate income, more and more people must be recruited.
    <LI>Commission passes "up" the scheme to the recruiters.
    <LI>Mathematically speaking, this can be visualised as a pyramid.
    <LI>Some/many/most of these schemes do *not* actually generate any income into the scheme, or the income is minimal.
    <LI>Where a scheme does not generate significant income, what tends to happen is the the early members make all the money, while late joiners lose out.[/list]

    Look at it another way. If an MLM scheme does not sell to anyone outside the MLM scheme, then it is a "closed system". Therefore, if someone makes money in the system, it's at the expense of someone else.

    Surely though, if you keep growing the MLM scheme the money will keep flowing? Well, this is true but in order to keep the returns up to expected levels, the growth must be EXPONENTIAL - i.e. if one person needs to recruit 10 people to make a return, then those 10 have to recruit 100 between them, who then have to recruit 1000 etc, as the table below shows:

    Level---New-------------Total members
    0-------1---------------1
    1-------10--------------11
    2-------100-------------111
    3-------1,000-----------1,111
    4-------10,000----------11,111
    5-------100,000---------111,111
    6-------1,000,000-------1,111,111
    7-------10,000,000------11,111,111
    8-------100,000,000-----111,111,111
    9-------1,000,000,000---1,111,111,111
    10------10,000,000,000--11,111,111,111

    The problem is that after stage 9 you actually run out of people on the planet to recruit. You reach one million people by step 6.

    If you take a more "gentle" recruitment level, with just 4 recruitments needed to make a return, the structure looks like this:

    Level---New-------------Total members
    0-------1---------------1
    1-------4---------------5
    2-------16--------------21
    3-------64--------------85
    4-------256-------------341
    5-------1,024-----------1,365
    6-------4,096-----------5,461
    7-------16,384----------21,845
    8-------65,536----------87,381
    9-------262,144---------349,525
    10------1,048,576-------1,398,101
    11------4,194,304-------5,592,405
    12------16,777,216------22,369,621
    13------67,108,864------89,478,485
    14------268,435,456-----357,913,941
    15------1,073,741,824---1,431,655,765
    16------4,294,967,296---5,726,623,061

    Here you run out of people after step 15. By step 10 you need over a million people.

    MLM schemes tend to collapse when they run out of people and the movement of money dries up.

    So for any scheme you've got to boil it down to the simple business processes at work. Don't be confused by the prospect of riches if the fundamental business idea is unsound. For any enterprise to work you have to bring at least the same amount of money INTO the enterprise as you are expecting to pay out.

    If you're merely selling stuff to each other within your own enterprise, then it will fail and you will most likely lose all your money.

    [ 04-29-2002: Message edited by: Dynamoo ]

  8. #8
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    The point is without " a true product...it's illegal. A page of referral lists and club, is not truely a legal MLM... Example a few years a go the "cookie cutter" this is not in my opinion a legal MLM.


    I was more talking about a true legal hand in product MLM.....Your monthly costs are more expensive.


    Most MLM's can be described...as if your wishing in one hand and listening to bull**** in the other....which is going to fill up first?


    As far as time spent....isn't it the same time you spend putting up an affiliate link as it is a MLM referal link on the web site?


    Yes you may make more, but you may also loose credibility as well, depending on the MLM you chose. if you signed up 100 people and they never made any money off the deal, and no actual product in hand, don't you think those 10 will be a bit P***ed. Once bitten twice shy.

    One thing about MLM which is a nice...is Life time customers, if they stay with the program, or keep buying. But these customers are few and far between. There are some affiliate programs out there that do...Vision Direct is one of them. No cost, just repeat business.


    MLM could work, if you took all the sharks out the water, and pushed life time customers just to buy rather than sell. JUst my two cents worth.

  9. #9
    ABW Adviser Panel Dynamoo's Avatar
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    Of course your right Canfree - some MLM schemes *do* work because they're actually selling a real product to real people.

    Again, it's not the MLM that's the issue, it's the business model, but most people get excited by the "make money fast" stuff.

  10. #10
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    Dynamoo...very correct. I believe it is the product verses the 'scheme'. I was always anti-MLM...I could earn $10,000 a month, just by stuffing envelopes, etc. There is a guy that I worked with that paid $500 just to sell a companies products...products that weren't even that great. I've heard stories like that over and over, and stayed far away from MLM. I had signed up with Cognigen a long time ago, but never did anything with them. Perhaps to just see where they would go. Over time, they started adding products that both me and my clients could use...I've turned a profit since Day 3. I couldn't be happier with the services, and I haven't heard one complaint from my customers that have signed up for Cognigen products. I look at it similar to affiliate marketing. I sell a product and make a commission. Plus it's residual income...very few affiliate programs offer that as a bonus. To me, its all about the product and the company, just as if I were a sales agent for that company. It's not about earning $10,000 a month by placing ads in newspapers, and paying to have to do it.

  11. #11
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    I do agree, I just wanted people to realize that there is problems with MLM. As I stated in the email that the idea is good, and if the products are good, it can work, but there's few mlm's that are like this.

    The switch of money of some of the online MLM's that market such as the cookie cutter, I don't believe in. No real product, and just a switch of money.

    And I'm sorry to say I won't market these scheme's on any website, I coulnd't sleep at night thinking I suckered some one desperate to make some "quick money" and never do.


    Heck since Cyber Rebate...what's too good to be true usually is, and I didn't sleep for nights after Cyber Rebate crashed, just thinking on how many home's finiancial problems, divorce, and other stuff, happened because I promoted them. I just refuse to promote something for the sake of making a few extra dollars per month.


    THMEDIA- that's a real MLM. Glad you found one with a real product/service....Not many to be found.

  12. #12
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    Canfree, trust me when I say that I watched them and their model for a long time to see. They are probably the only MLM I would get involved in, and mostly because the compliment our current services...and their services that I have used are great. I won't promote it if I don't use it or tried it myself.

  13. #13
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    What he said!

    I,ve been paid by Cognigen every month for 3.5 years

    Never done the MLM thing BUT it is there if choose to do it.

  14. #14
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>The net makes it possible for people to succeed at making money from sales and MLM.

    I don't mean for everyone to just do MLM, that woould be stupid, but I really think, that OVER time, if you find the RIGHT MLM program and plug it into your affiliate marketing mix and treat it just as you treat
    one of yur best merchants, you will be better off than if you did not do it.

    <HR></BLOCKQUOTE>

    I agree. I got joined a Co. in Jan (with a real and valuable product) and have treated it just as I would any other merchant/product and have made profits since day 1, without even attempting to recruit anyone into the program. All money I'm making is on sales of the product.

    Prof. is right on with this one, but also there are sooooo many loser MLM schemes and scams, just be careful and find one with a real product you can sell.

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