Personal MLM Math

May 01, 2021 • written by

❗❗ REPOST FOR INSPIRATION ❗❗ - sabi nung original na nag-post.

This got me thinking…

Saan galing yung pera?

I saw a post about how a service crew earned ₱3,000,000 in one year from an MLM company.

The high-end companies sell their recruitment packages for ₱20k a pop.

The low-end companies sell their starter packs at ₱5k.

Okay.

What MLM do you belong to?

You’ll need 150 new members to reach ₱3,000,000 sales in a high-end company.

You’ll need 600 new members to reach ₱3,000,000 sales in a low-cost company.

We’re just talking about sales.

If you keep 50% of the commission and the company keeps 50% of the commission, you’ll need to double the amount.

Three hundred people need to shell out ₱20,000 for a starter kit.

One thousand two hundred people need to shell out ₱5,000 for a starter kit.

Okay.

Cool.

Let’s do some math since you’re all interested in business.

A decent salesperson has a 1:10 sales ratio.

That means that out of 10 sales meetings, one person will buy.

To close one sale, you need ten sales meetings.

A typical sales meeting is a “let’s have coffee at Starbucks, and I’ll talk about my business” invitation.

Okay.

If you live in Parañaque and you work in Makati, transportation costs ₱200.

Coffee for two people costs ₱300.

That’s ₱500 per meeting if you work part-time.

If you’re a skilled and aggressive salesperson, you can squeeze in four or six meetings a day.

If you’re a hot chick, you can get the other person to pay for the coffee.

I’m a guy, and I’m not good-looking, so I end up paying for the coffee or lunch in my business meetings.

You’ll likely spend ₱2,000 on just transportation to close one sale.

If you work smart, you’ll spend half that amount.

I’m not going to compute the cost of coffee for a business meeting because the number is absurd. Cough! ₱3,000! Cough!

You’re likely to spend close to ₱5,000 to close a ₱5,000 deal.

That’s for low-end companies.

FUN FACT: A beginner salesperson has a 1:20 sales ratio.

I’ve seen guys have their meetings at 711.

They talk about “BIG BUSINESS” with “LOTS OF POTENTIAL INCOME” while chowing down on a 711 hotdog and a Slurpee.

I have nothing against 711 food.

711 hotdogs are my guilty pleasure during my long-distance bike rides.

Totally unrelated.

I digress.

So you sell ₱20,000 MLM business packages.

You spend ₱1,000 to close one deal.

You spend ₱300,000 to close 300 new recruits.

Okay.

Great.

You sold ₱6,000,000 worth of starter packs.

How much of that goes to you?

Many MLM companies say half.

You get ₱3,000,000.

You spend ₱300,000 to earn ₱3,000,000.

Fantastic!

You multiplied your money by ten!

Let’s talk about time.

A call center agent earns ₱150/hour.

You invested ₱45,000 in lost income.

You invested another ₱90,000 in your commute time.

So ₱3,000,000 minus ₱435,000 is ₱2,565,000.

That’s not so bad, all things considered.

You earned double the amount of what a good BPO worker earns in a year.

“Does your job allow you to take home a million pesos a month?” an MLM recruiter asked me once.

You have to slave away for ten hours a day.

At our company, you just need to find and support twelve people!

Here’s the thing.

There’s something called attrition rate.

The attrition rate eats up 90% of all new practitioners in any field.

95-99% of people quit after two years.

This statistic seems to be constant in many competitive fields.

Out of 300-12000 people who buy from you, 90% of them are going to quit.

You can look up statistics.

Check DTI statistics for businesses.

Check your friends in HR.

Ask your friends in martial arts how many white belts become instructors.

Check with your friends who work in sales.

A lot of Filipinos are agreeable.

Many Filipinos will blame themselves.

Many will say that it’s my fault the business didn’t work out.

There are a few who will feel that you took advantage of them.

How do you feel about having ₱2.5m in the bank but knowing that 300 people trusted you with ₱20k and you didn’t deliver the “passive income” or a decent rate of return?

The bank gives you 1% at least.

You also get to keep your money.

This is just some math and some ideas.

I tend to think while composing on a text editor.

Please forgive me if I misspelled some words.

I just happened to have this train of thought come up during a writing session.

Where does the money come from?

Are you comfortable taking other people’s money?

Is there a better way to earn ₱3,000,000 without promising other people wealth and prosperity?

Let me know your thoughts.

I am praying for your success. God bless!

If you made it this far, you should introduce yourself.