Obviously, your cost of goods is calculated as your acquisition or manufacturing cost. The more frequent question involves pricing. Most MLM experts agree that you must have adequate margins to pay commissions and to make a profit. Different products and services carry different profit margins. In addition, smaller margins may be satisfactory with high-priced products because there is still room for profit. Most MLM companies are likely to pay total commissions equal to between 30 and 45 percent of price sold to distributors for resale, or prices for which consumers buy directly from the company. A typical company will try to achieve a minimum 5-7 times markup to allow for commissions, overhead and profit. Typical mark up for resale by distributors is 25% of their purchase price. A good place to visit this issue is at the Starting and Running the Successful MLM Company Conference, offered by www.mlmlegal.com, where experts discuss margins, pricing, profit, proformas, and more for executives of startup and existing network marketing companies.
MLMLegal.com has launched the Innovation Campaign for its February 2014 MLM Startup Conference. Read how to get your two free tickets by clicking HERE!
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Our next Starting and Running the Successful MLM Company Conference takes place February 27th & 28th, 2014 in Las Vegas. Call 503-226-6600 or 800-231-2162 to register.