The IBO Profitability Challenge Case #1

The case below is submitted by a Q-12 Platinum. The methods this Platinum IBO teaches appear to be very profitable. There is a high amount of retail selling. Fifty-four percent of total sales volume was retailed. The retail mark up generated 29% of the total gross income. The 25% performance bonus on these sales was 31% of gross income. Retail sales generated 61% of total profits allowing the average active IBO to have a net profit of over $8,600. Out of 62 IBOs only 20 were spending some money on the system. This IBOs group averaged abut $11.50 hour in the business.

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Gross Income

Enter the Yearly BV of your group

467,461

x

25.0%

=

$116,865

Enter the BV sold at Retail Price

256,800

x

23.0%

=

$59,064

Enter number of Q-12 Qualifiers

1

x

$10,000

=

$10,000

Special One Time Bonuses Total

5000

x

1

=

$5,000

Leadership Bonus

60059

x

4.0%

=

$2,402

Other Bonus

422653

x

2.0%

=

$8,453

1. Approximate Annual Group Gross Income

$201,785

Total Group Gross Income

$201,785

Total Group Expenses

-

$29,467

3. Group Profit/Loss

=

$172,317

Profit Analysis

3. Group Profit/Loss

# of IBOs

IBO Average Net Profit

Hours / week expended

Profit/hour

Total Downline

$172,317

/

62

=

$2,779

/

=

Active Building IBOs

$172,317

/

20

=

$8,616

/

15

=

11.49

Average

BV Annual

BV Monthly

PV Monthly

Personal BV per Active IBOs

6,406

534

267

Expense Ratio

15%

BV per IBO

2,066

172

86

Expenses

Description

Units per Year

Cost per Unit

# of IBOs Participating

Total Expenses

Amvox

12

X

$21.00

X

8

=

$2,016.00

Business Checking

12

X

$0.00

X

14

=

$0.00

Long Distance Phone calls

60

X

$0.08

X

12

=

$57.60

Starter Kit additions

1

X

$160.00

X

8

=

$1,280.00

Standing Order Tape

52

X

$6.36

X

5

=

$1,653.60

Go Getter Tape

52

X

$6.36

X

5

=

$1,653.60

Book of the Month

12

X

$13.78

X

5

=

$826.80

Recruiting Tapes

2

X

$8.48

X

14

=

$237.44

Promotional CDs

2

X

$10.60

X

14

=

$296.80

Postage for promotion

12

X

$8.00

X

12

=

$1,152.00

Open meeting-Tickets

24

X

$10.00

X

7

=

$1,680.00

Open meeting-mileage

240

X

$0.32

X

7

=

$529.20

Product Sample packs

1

X

$300.00

X

15

=

$4,500.00

Mini Rally-Ticket

3

X

$15.00

X

8

=

$360.00

Mini Rally-Mileage

180

X

$0.32

X

4

=

$230.40

Major Function-Ticket

3

X

$233.00

X

6

=

$4,194.00

Major Function-Hotel

4

X

$0.00

X

6

=

$0.00

Major Function-Mileage

500

X

$0.32

X

4

=

$640.00

Mileage for plan showing

1500

X

$0.32

X

12

=

$5,760.00

Sales Kits

1

X

45

X

20

=

$900.00

Baby sitting

X

X

=

$0.00

Other misc materials

1

X

100

X

15

=

$1,500.00

X

X

=

$0.00

Total Expenses

$29,467.44

The description of this business was copied from a WEB bulletin board.

"The tool issue within my organization:

Several of my key leaders and I participate fully within the traditional system. Our growing downline is encouraged to participate more when they begin to consistently hit certain pin levels. At that point they have more responsibility to train their downline. (Why do I participate in the traditional system at all? I find that I do pick up useful information, which I can pass along. It also keeps me aware of new trends such as the mini CD that came out last year. I can also "network" with some other group leaders.)

Tapes:

I have a list of 20 tapes, which cover key networking topics. 8 steps...8 topics. I have several 10 tape packs that I loan out to new distributors or those who have expressed further interest. These are part of that set of twenty. New distributors who are interested in building a business are strongly encouraged to get these tapes (Either all at once, two sets of 10, or two tapes a week). As a new tape comes out in the traditional system that I believe is worthy I'll suggest it to the group. If it is good enough, I'll replace one of the twenty on the list with the new tape. (I keep the confusion to a minimum by being very selective and I don't limit myself to only tapes from the "system". There are some very good third party vendor MLM tapes that teach basics very well.)

Videos:

I have a list of these similar to the list for tapes but these are available to those interested. I also have a library of tapes made during some seminars or workshops. These are available at about cost.
Seminars: The business building seminars are treated a little differently. I hold more beginner-types meetings than most other directs I know. A couple of my leaders and I will put these on. Our meetings are broken into different areas (Networking, Retail, Products, and Leadership/Open Discussion). My upline emerald does some of these meetings for me. He understands my stance on the business and respects that. I will also have our group get involved in product fairs, artistry workshops, and similar such activities put on by our upline diamond.

Books:

I have a recommended reading list. Typically we will discuss a book at one of our seminars.
Literature: I use e-mail liberally as a teaching tool. I send out e-mails to my group about weekly. My Amvox messages are forwarded to e-mail also, so I will e-mail these as well. Training materials are e-mailed as attachments. Sales aids are also emailed as attachments. People who have trouble printing can get these materials by mail (I charge a small fee to cover expenses.) In my opinion, e-mail is a better way to get out information than via tapes. (I also know people learn three ways audio, visually, and by doing. I try to achieve all three.) I maintain a private website where these types of materials are archived. The site allows for some ongoing discussion. I have links posted for some places on the net to get MLM materials. All of those materials are also available through me. I keep a stock of certain tools just as you do I'm sure. Those of you who are members of "the retailing club" are starting something similar. I don't have a standing order anything. Everything is as you order it. I have created packages of materials since it makes good business sense.


Open Meeting/Introductory Seminars:

I encourage my new people to plug into a local seminar through the system. I instruct people to use these for two purposes, learn how to show the plan to others and to take people as a follow up. We also use home meetings as often as possible.
The future? Perhaps Napster, Netmeeting, MLM Radio, MLM Training via satellite, video conferencing, and etc. I know groups using each of these to a certain extent. I have experimented with a couple of these but for most people these are a bit of a stretch. I may use more of this type stuff in the next couple of years. My goal: Keep it simple, keep it profitable, make it fun, and build others."