Most MLM companies rent their software. But they can never tweak it to fit their business model, and the distributor base suffers.

Let me give you a story on that. I was consulting for a network marketing company out in Utah.  They had a binary compensation plan, in other words a 2-legged plan - one left, one right. Real simple, right?

But the software they leased could not be changed from left to right, to reflect the binary. They tried.

They Had To Pay The Programmers To Come Back In & Reprogram It!

You would think that was a simple, simple, simple fix. But it couldn’t be fixed over a 6 month period.

Here’s what happened. Let’s say you already have your strong leg going well. Now you go into your back office and put all your new sign-ups on your weak leg.

And you’re building, building. You have ads running on the internet. People are joining you and your business is growing. And you think they’re going on your weak leg.

All of a sudden, you find out they are all going on your strong leg. And in a binary, you only get paid based on your weak leg production. So this is a real problem.

Now You Have To Fight With The Company To Move Your People!

And what was so amazing about that process that I witnessed was, the company went out and hired more and more and more customer service people to handle the paperwork to move these new reps. And then they started charging the distributors $10 each to move the people that the company messed up on in the first place. 

Finally, they got so overrun with people wanting to change these positions back over to their weak leg where they should have been in the first place … that they finally said, “We are not switching anybody anymore!” They couldn’t handle all the influx of people needing that done.

Now that’s a perfect example of buying your software and not being able to tweak it at all.

And when you rent the software, you better read the fine print, because you don’t own the database.

You Do Not Own The Database!

About a year and a half ago, I saw a downline genealogy for sale on the internet. I happen to know the owners of the company. I called them up and said “Hey! What’s going on? My gosh, your company is doing good, isn’t it?”

“Yeah. Company is doing great. But we couldn’t afford to buy the software, so we leased it. And part of the lease deal is, the software company owns the database.”

And this software company thought it would be great to make an extra $100,000. So they put the genealogy for sale on the internet and sold it to 10 companies for $10,000 apiece. So they made a quick $100,000 selling the genealogy. And right in the Policies and Procedures, it said that the software company owned the genealogy. It was right there, right in black and white. How would you like to build your business and then have your organization for sale on the internet?

So before you build big with some company, ask them who owns their software. If they don’t own it, then you could lose everything in a heartbeat.

The big reason they rent it is because it costs them about $2 million to buy it. They can rent it for about $10,000 a month. Most companies don’t have the 2 million dollars to spend up front. 

But the other thing is, if you really truly, understand your business and it functions, doesn’t it make more sense to have someone program your specific software? Then you can work with them.

You Want a Company That Has Built Their Software From The Ground Up! 

When the company has built it and owns it, the distributor base is protected.

Instead, these guys get the idea to start a network marketing company, and 10 minutes later, they are in business. So they call the software companies and find out it’s 2, 3, 4 million dollars to buy the software program, but you can rent it for 4, 5, 10 grand a month and you’re in business!

Now they know this is a tough business, and there’s a very real chance they won’t even be around 2 years. Taking on a $2 million obligation doesn’t make sense to them. $10,000 a month is definitely the way to go. Problem is, you’ve sold your soul to the devil.

An Evil Secret

Another thing that software companies will do is - and this is a very well kept secret - they will be in partners with that MLM company. So there is a downline organization, a leg being built by the MLM company for the software company.

That creates a retirement income for the software company on the bacsk of the distributors.  How hard is it for the owners of the MLM company to move all their orphan distributors  underneath the software company and build them a nice check? That’s a very, very, very tightly kept secret,

It’s just one more reason you need to build your future with a company that owns its own software.

We Appreciate You
Michael & Linda Dlouhy
Call 1-352-799-8779 (anytime)
Get my FREE ebook: Success In 10 Steps
“Be A Mentor With A Servant’s Heart!”

Our afternoon Leaders call yesterday was full of powerful information about why you need to read your company Policies & Procedures.

In 27 years in network marketing, we’ve learned the #1 feature you must have in place for success:

Company management experience with integrity.

People ask me all the time, “How do I know if my company has integrity?”

The answer is simple: read your company Policies & Procedures. If you can’t find them on the website, it’s a big red flag. Some companies say you can’t read them until after you join. Big red flag.

Why are they ashamed of their P&Ps? Why don’t they want you to read them? The P&Ps are YOUR contract to be in business with them. Every time any distributor ever gets a termination letter, it says, “You have violated the Policies & Procedures.” They never say you violated “Terms & Conditions.” It’s always “Policies & Procedures.”

So you REALLY REALLY need to download and listen to this audio file. You’ll get full detail on the deviltry that companies put into their P&Ps, so you know exactly what to look for and how to protect yourself.

We do a training called the 5 Pillars for Success. These are the pillars that YOU as an MLM distributor need to have in place for success. It’s not what a network marketing company needs. It’s you, the distributor, and that is an important difference to understand.

The top company in the network marketing industry does $10 BILLION in sales every year. Company #2 does 1 Billion a year. And what’s amazing is, Company #1 pays only about 10% of the commission that Company #2 pays!

Company #1 is very profitable. But, aside from the old-timers, the distributors are not profitable at all.

Do They Even Know How To Spell MLM?

So company management experience with integrity is Pillar #1. Has that CEO or management team ever built a network marketing organization?

A lot of these network marketing company owners come from a Fortune 500 background. They’ve never driven 4 hours one-way to do an opportunity meeting for 20 people, only 2 show up, do the meeting, do the training, drive home, fall asleep at the wheel, pull into a rest area and sleep for a couple hours so they can get home, get a shower, and go to work that day as a secretary, a nurse, a carpenter, a doctor …

THAT is the truth about MLM that these pretty-boy hotshots will never know. Let me tell you a story.

My good friend Dave Cones came to Florida from Oklahoma, in 2002. We were invited as guests to an opportunity convention, because we were doing some consulting with these people. We sat in the audience. It was a 2-day event. We watched the presentations & watched the people there.

The company - and I can mention their name, for reasons which will soon be obvious - was Heartbar, a publicly-traded network marketing company. They were about 18 months old at the time.

President of the Company - Great, Fabulous Guy!

You couldn’t have found a nicer guy … but he didn’t know anything about MLM. His background was Fortune 500.

So he’s onstage doing a presentation, and he said, “You know, I’ve just so enjoyed travelling the world, travelling across the U.S., going to the meetings, meeting such great, great awesome people. What amazing people that we’ve met!”

“And that’s going to have a big impact on our decision, if we ever decide to do away with the compensation plan and go to direct sales.”

Dave & I looked at each other. We had the same thought: “Whoa! Hard to believe that guy said that from the stage!”

The Reps Must’ve Been on LSD!

When they took a break, Dave & I chatted with some of the reps. We asked what they thought about what the President said about doing away with the compensation plan.

Nobody heard it! 

It was amazing. It was like they were on some euphoria drug. We didn’t talk to one single person who heard him say that!

Something else those reps didn’t know: Heartbar created a product and was selling it to athletes. They didn’t think their reps would ever find out. Of course, the reps did find out. And when they realized their own company was competing against them, they raised a howl.

The “Dear John” Letter Arrives

And right after this ruckus, the company sent out a letter of termination to every single Heartbar rep.

How could they do it? Because a clause in the Heartbar Policies & Procedures said “Company may terminate the status of any distributor at its sole discretion, without cause, by giving 30 days written notice to the distributor.”

And if you were unclear what they meant there, you just had to read down another couple paragraphs. It said, “Termination results in the distributor’s loss of his or her sponsored downline organization.”

So distributors built the organization, built the group volume, & built the product sales. And the company cut the reps out of the profit picture and went direct sales with it.

This is EXACTLY what you can expect with a management team of Fortune 500 guys who never built an MLM downline. They have no understanding, no empathy for you. Their only concern is bottom line profitability.

So if you built their business for them, but it’s in their financial interest to get rid of you - and they can legally do so - you will be history.

Have you read YOUR network marketing company’s Policies & Procedures lately?

We Appreciate You
Michael & Linda Dlouhy
Call 1-352-799-8779 (anytime)
Get my FREE ebook: Success In 10 Steps
Be A Mentor With A Servant’s Heart!”

Watch out for your viperous MLM upline! They can get you good.

You need to make it a point to know who your upline is. I just spoke with a lady last night on a 3-way phone call. She was the first woman in this network marketing company who built so quickly that she went to the top of the payplan in 4 months.

Her upline was envious and jealous. And part of her network marketing strategy was NOT to read the company Policies & Procedures. Bad, bad combination.

Before You Ever Join Any Company, Thoroughly Read Your P & Ps

Before this lady built the program, she did tell the company that her fiance was promoting another MLM company.

But guess what? Her company’s Policies & Procedures state that you cannot make any money from another network marketing company - not even an affiliate program! If you violate this provision, you can be terminated.

And these restrictions apply to everyone living in YOUR household!

Now to me, that sounds like you’re an employee. If you’re an MLM independent contractor, how can they put those kinds of restrictions on you?

Anyway, this lady build to the top of the payplan. She was rocking and rolling. Everything was great. She was about to receive a $7,000 bonus check for reaching the top of the payplan … first woman to ever do it …

… and all of a sudden her website is turned off. Everything is shut down. The company didn’t even send her a letter.

Bad News From the Viperous Upline!

Her upline called and told her she was terminated because her fiance was in another program. She had already told the company they weren’t married and that he was in another program. So it had nothing to do with her or her network marketing strategy, but because they lived in the same household, the company used that lever to get her out of the line of compensation.

The company views 2 people living in the same household as if the two people are the same. And they can do that because it’s in the Policies & Procedures.

Isn’t that amazing?

What are the chances the company would ever find out about this if not for the viperous upline? Because this lady just got terminated, her sponsor inherits her entire organization. It all rolls up.

The Upline Couldn’t Build It Themselves – And Now They Don’t Have To!

I know a number of network marketers who have lost everything, because they never read their Policies & Procedures. Go to your company website right now, and read your P & Ps. You may be astonished at what you find.

FACT: When you joined your company, you checked a box stating that you agreed to abide by each of those P & Ps. But I’ll bet you never actually read them!

Which reminds me of a trap that a lot of network marketing reps fall into. They think, “Well, everybody I know is violating this rule. The company must not care.” Believe me, you can violate any rule you want, so long as you’re not making any money. But once you start to build a significant income, THAT is when it’s worthwhile for your viperous upline - or your company itself - to terminate you for violation of your Policies & Procedures.

What’s in there that YOU don’t know about? Go find them and read them. Now!

We Appreciate You
Michael & Linda Dlouhy
Call 1-352-799-8779 (anytime)
Get my FREE ebook: Success In 10 Steps
“Be A Mentor With A Servant’s Heart!”