4.13.2007

MLM Compensation and Perks

Network to Freedom:
"When doing due diligence on an MLM company one of the key areas is evaluation of their compensation plan. First, compare the target company plan to industry. For example, it would not be proper accounting to consider “wholesale discounts” as part of commission expense. Therefore, any comparison to industry would have to include wholesale discounts as a deduction from Gross (Retail) Sales. Why? Because no serious person doing the business would buy at retail (making Gross Sales a meaningless figure)."

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