Case
5 (Network Marketer)
Brenda is an MLMer (Network Marketer). Unfortunately she is a "latecomer" to MLM, so it is hard for her to find and recruit new MLMers (necessary for success in MLM). She starts to search for opportunities and information on the Internet. One day she finds MLMer's Survival Guide . After careful reading and discussions with her friends she decides to follow the method proposed in the Guide. She chooses companies that have wide spreads between retail and wholesale prices and maximum commissions to distributors/affiliates. She chooses companies where the total value is at least 15% of the retail price. Then Brenda designs her own payment scheme:
5%-1st level
4%-2nd level
3%-3rd level
2%-4th level.
According to this scheme she receives 1% from each sale plus residual income from commissions.
|
Date |
Event |
Brenda’s Actions |
|
5/20/00 |
AP Settings |
Set up AP settings: 5 levels, type=%, period=1month |
|
5/22/00 |
Announcement of AP |
Brenda announces her AP. |
|
May |
First affiliates |
Brenda registers the first 20 affiliates with IDs from 1 to 20 and Reference ID=0. |
|
June |
The first sales from AP and new affiliates |
Brenda registers 200 new affiliates on the second level (each old affiliate referred 10 new affiliates). Affiliates on the first level generate average sales of $200 each. Brenda pays $200 (20x5%x$200) to the affiliates and has $400 profit. |
|
July |
New affiliates, sales, and payments |
Brenda registers 2,000 new affiliates on the third level (each second-level' affiliate referred 10 new affiliates). Affiliates on the first two levels generate average sales of $100 each. Brenda pays $1900 to the affiliates and has $1,400 profit. |
|
August-September |
New affiliates, sales, and payments |
Brenda registers 10,000 new affiliates on the forth level (each third-level' affiliate referred 5 new affiliates). Old affiliates generate average sales of $40 each. Brenda pays to affiliates $10,360 and has $2,960 profit. |
|
October-December |
New affiliates, sales and payments |
Brenda registers 30,000 new affiliates on the fifth level (each forth-level' affiliate referred 3 new affiliates). Old affiliates generate average sales of $20 each. Brenda pays to affiliates $33,180 and has $3,480 profit. |
|
January-March 2001 |
New sales and payments |
Brenda registers 60,000 new affiliates on the sixth level (each fifth-level' affiliate referred 2 new affiliates). Old affiliates generate average sales of $10 each. Brenda pays to affiliates $58,590 and has $4,740 profit. |
|
April 2001 |
Net's growth stabilizes. New sales and payments |
Affiliates generate average sales of $5 each. Brenda pays to affiliates $71,295 and has $5,370 profit. |
|
May |
Sales and payments |
Affiliates generate average sales of $5 each. Brenda pays to affiliates $71,295 and has $5,370 profit. |