The Truth About 100 Percent Commissions

The start of the 100 Percent Commissions game   100 percent commissons

When Empower Network introduced 100 percent commissions I remember thinking how is this possible?

I have a business degree and worked as a CPA for much of my life. I then worked as a Financial Planner. I understand every business needs to be profitable to stay in business.

Paying 100% Commissions brought up so many questions for me. How could anyone survive doing that? It just made no sense to me.

The boys that started Empower Network soon found out they needed funds to employ support staff and run their business. So the model changed a little…. or in some people’s minds a lot.

I explain it on the video below but in essence they introduced a monthly affiliate fee and later some products they do not pay 100% commission on.

Since then many others have copied or done some type of variation of the model.

I share my thoughts in this video.

Affiliates perspective on 100 percent commissions

What do you think on the subject of 100 percent commissions?

As affiliates it is nice to earn a nice slice of the pie but we want the business or person we are selling for to stay in business don’t we?

I guess I have been on the other side of the equation more than I have been selling for someone else. I still think from the main business owner’s position.

Business Owners perspective

In our days owning a Financial Planning practice our planners were forever wanting higher commissions. We knew how much we needed to pay in overheads and it was considerable.

There was always that trade-off for us to pay enough commission to keep good planners but to also keep enough money for our company to stay in business.

Most people that become affiliate marketers or network marketers have come in from being an employee. I am the opposite I have been a business owner so I think a bit differently.

For many of you who visit my blog you have, or are creating, your own products. You will have the same challenges and I encourage you to know your numbers and to make sure you do not give away too much.

Having said that more sales where you retain a lesser percentage could mean more profits for you.

A very simplistic example of  this

You are selling a product online for $50

1. Paying  25% commission

100 sales x $50 = $5000.00   – you pay $1250 commission ——- your keep $3750

2. Paying 50% – more commission more people want to sell for you

1000 sales x $50 = $50,000 – you pay $25,000 in commission and you keep $25,000

Simplistic but you get the message. In this example you would be significantly in front paying

Closing thoughts on 100 percent commissions

 

100 percent commissions — 20 percent commissions—- somewhere in between.  There is a business owner or product creator and there are sellers. Every business needs sales to be in business. It needs to be a model that is acceptable and sustainable for everyone.

Empower Network have not changed the playing field in my mind they have merely adjusted and grown up as business owners.

Over to you… what are your thoughts on this subject?

Have a great day!

SuejPrice.com

 

 

 

 

 

Sue Price

Skype: sueprice

PS

Click here to work with me personally

{ 30 comments… add one }

  • Glenn Shepherd May 10, 2014, 2:03 AM

    Hi Sue,

    It’s really good that you ‘get’ business because there are so many who don’t! The subject of 100% commissions, or selling low-ticket products is one that many, many people don’t grasp because they don’t see the bigger picture.

    I don’t know anything about Empower Network payout structure, but I do know that a lot of Marketers, including mentors of mine, pay out 100% and sometimes even 200% or 300% commissions! But there has to be money to be made elsewhere (i.e., on the back end), otherwise the money will soon run out!

    It’s like when I visit the WSO section on the Warrior Forum, for example, and I see comments from people who don’t get how a seller’s making money by only selling WSOs for something like $5 or $10. They fail to see that the real money is being made from upsells and, for the more long term, having a buyer’s list who can be marketed to again and again using a solid, high-ticket back end.

    The key is having a good strategy, knowing what you’re aiming for in the longer term and knowing your numbers. Trading some quick, upfront cash for getting potentially long-term customers can be a very, very wise investment. After all, we can spend the same amount of money on different forms of advertising and gain nowhere near as many customers for the same amount of investment.

    So yes, I’m a firm believer in the 100% commissions model, however it must be done correctly and be sustainable. I can’t honestly say that I’ve come across anyone who pays out 100% commissions without having a strategy in place to make the profit elsewhere. I’d be interested to know if anyone has actually done that (is that what EN were actually doing for a time?) and how long they were able to keep it up!

    Thanks for sharing your thoughts on this interesting subject, Sue. I hope you’re keeping well and that you have a great weekend ahead.

    »Glenn«
    Glenn Shepherd recently posted..One Magic Number to Increase ProductivityMy Profile

    • Sue Price May 12, 2014, 3:05 PM

      Hi Glenn

      Thanks for your great comment.

      It has taken me a while to understand that many people online do not understand the fundamentals of business or the bigger picture. Having just said that there are also offline traditional businesses that do not either. Let’s face it anyone can start a business on or offline.

      I agree with you totally that people must have a strategy and plan. The small front end product with up sells works well even in the offline world. When I was working with the organization that promoted Robert Kiyosaki and other speakers we used that model to sell their top end weekends. It worked.

      Yes the guys that started Empower Network were paying 100% when they started with no strategy on how sustainable that could be. I cannot remember exactly how long they were able to keep that up but not long. A matter of months. The structure they have now seems solid and they also employed some very experienced people which is a comfort.

      It is a fascinating subject and I thank you for your insights on it Glenn.

      I did have a lovely weekend thanks and hope you did too.

      Sue

  • Ryan Biddulph May 10, 2014, 9:33 AM

    Hi Sue,

    Find the balance between attracting partners and paying yourself too ;) Also, funding the program. Dole out healthy commissions but keep cash flowing through others channels to find the right mix.

    Thanks for the share!

    RB
    Ryan Biddulph recently posted..7 Travel Pictures from Around the World: Visualization PracticeMy Profile

    • Sue Price May 12, 2014, 3:08 PM

      Hi Ryan

      Well said in a very succinct way. It is all about balance and keeping each side of the partnership happy. Sometimes that is easier said than done but it is doable.

      Thanks for your comment here Ryan.

      Sue

  • Akaahan Terungwa May 11, 2014, 1:27 AM

    Hello Sue,

    The comment of Glenn is classical…sincerly, I cannot think of a better esposition than what he has currently done. There is always a way to get back the dollars given – always. Or, the whole act would amount to an exercise in stupidity!

    Do have a great day, Sue!

    Always,
    Terungwa
    Akaahan Terungwa recently posted..HOW TO DOWNLOAD AND SAVE YOUTUBE VIDEOSMy Profile

    • Sue Price May 12, 2014, 3:11 PM

      Hi Terungwa

      I agree with you Glenn’s comment is an awesome summary of how it works. Yes you are spot on you can always recover the dollars paid out.

      Thanks for your comment Terungwa and have a successful week ahead.

      Sue

  • Adrienne
    Twitter:
    May 14, 2014, 7:39 AM

    Hey Sue,

    I always wondered about the 100% commission structure myself. The red warning lights would start going off in my head because there has to be something else to that.

    Although Empower is an online company for the most part as you said you still have to pay the people who run it because no one can do this alone. Then you also have hosting as well so there is a lot of costs still involved. Someone made the comment on my blog the other day that wouldn’t it be nice if everyone helped everyone for free. I replied yeah, in a perfect world where no one had to eat. I love people but I can’t live off love alone, no one can.

    I think you explained this well and although I did come from an employee mindset I know how companies are run because there were many times I ended up having to do the accounting part too. I think until you’ve done that you don’t appreciate where or how the money comes in.

    ~Adrienne
    Adrienne recently posted..Content Marketing: Good Versus BadMy Profile

    • Sue Price May 14, 2014, 5:18 PM

      Hi Adrienne

      When the boys started Empower they were very naive about business. They do say that freely now.

      I never knew you did the accounting in some of your roles before. So of course you understand. Probably a good thing you did that given you now have your own business.

      I laughed when I read what someone said on you blog about everyone helping everyone for free. I wonder does someone give this person food for free. I hope who ever said it is not going to attempt running a business, that is a bit of a scary thought.

      Thanks for your comment here Adrienne. I hope your week is going well.

      Sue

  • sherman smith May 14, 2014, 9:55 AM

    Hey Sue,

    I think over all people who become affiliates and reps have to realize how a business is going to say in business if it’s paying 100% commission. Yes a lot of reps and affiliate come in with an employee mindset and want to get the highest pay possible.

    But in turn, as you explain it, you want to join a business also for the longevity of it. Once you turn your focus more on how the system is going to sustain the company as well as it pays out to it’s affiliate, then you start to think like a business owner/investor.

    This was definitely something to think about and I believe this post would be great for those that are just getting started with a home business. Thanks for sharing Sue!
    sherman smith recently posted..Are You Not Understanding The SEO JargonMy Profile

    • Sue Price May 14, 2014, 5:22 PM

      Hi Sherman

      I love how you have added to the employee mindset that they want to get the highest pay without thinking of the longevity of the business. That really says it very succinctly.

      I wrote this post as I keep seeing the chatter on social media and I do hope this post gets in from of some newbies.

      Thanks for your comment here Sherman and you have a great week.

      Sue

  • Tamal Anwar May 15, 2014, 12:37 AM

    Hi Sue, I heard about the 100% commission model sometime ago on Warrior Forum. The idea is to offer 100% commission and bring lots of affiliates. Once you have the sales and the buyers, you sell them high ticket items in the backend and make more money online. That’s mainly the secret to this method :D
    Tamal Anwar recently posted..Making Money Online With Video Courses – My Udemy ExperimentMy Profile

    • Sue Price May 15, 2014, 4:54 PM

      Hi Tamil,

      That is one idea behind it for sure but not the only one. In Empower Network they started paying out 100% on everything and this is not sustainable. Most businesses use some form of front end offer to be able to upsell.

      Thanks for your comment Tamal. Have a good day.

      Sue

      • Tamal Anwar May 16, 2014, 6:23 PM

        Now what I think is, they are building a customer base, a name. It’s good to give away money to your affiliates rather than TV/Radio stations. Think if CocaCola would gave me an extra bottle of coke every time I would refer it to a friend, how much happy I would have been! Just my 2 cents :D
        Tamal Anwar recently posted..How to Build a Solid Online Brand to Help You Make Even More Money OnlineMy Profile

        • Sue Price May 19, 2014, 4:58 PM

          Great point Tamal and using your customer base in this way makes perfect sense.

          So I am guessing you are a coke drinker? :-)

          Have a great week.

          Sue

          • Tamal Anwar May 19, 2014, 9:59 PM

            Correct! I love Coke. However if Coke used the technique I suggested then it wouldn’t be that big name because we are used to advertisements. But anyways it’s still worth a shot (free coke!)

            Have a great week too Sue!!
            Tamal Anwar recently posted..I Make Money from Home Already, Now I Am Going For 6 Figures OnlineMy Profile

            • Sue Price May 20, 2014, 6:12 PM

              I have not had a coke for many years Tamal. I used to like it but then found out how much sugar is in it. :-)

              I would love to know what they spend on advertising. It must be huge.
              :-)

  • donna merrill May 15, 2014, 2:18 AM

    Hi Sue,

    Loved the way you explained this business model. I am a fan of longevity! As a product creator, I start with 50% commissions. But as I go along and my business grows with all sorts of products created, 100% commissions would be a good idea for a certain product to get more affiliates into my sales funnel.

    I’m not at that point yet, but from a product creator point of view, I can see the plan.

    I also see the many changes Empower has undergone. When the guys started out, they seemed to come from a MLM point of view..you know..all the hype. But they have gone through so many changes and have some top notch folks on board to their business that it is a successful one. Yes, they have kept their longevity!

    Although I’m not part of Empower, I do know many people that are and have prospered and grown through this company.

    -Donna
    donna merrill recently posted..Persistence For Online SuccessMy Profile

    • Sue Price May 15, 2014, 5:00 PM

      Hi Donna

      That makes sense for you to go that way, start with 50% and then when you can maybe do something at 100% as you say to bring in more affiliates.

      Oh yes there have been many changes at Empower Network. Yes they came from a total MLM view and had zero clue about running a business. They started thinking they would not need staff. It is amazing they stayed around but thankfully they were prepared to listen and learn.

      I know you are for longevity and I wish there were more people like it. It seems there are so many people who are more for a quick dollar these days. They will learn over time I am sure.

      Thanks for your comment Donna. Hope your week is going well.

      Sue

  • Monika Sharma May 16, 2014, 5:04 PM

    Hi Sue, Thanks to you for proving such a wonderful & lovely post About “100 Percent Commissions” ! This is Best post to learn something more unique for “Percent Commissions” So Thanks to You.
    Monika Sharma recently posted..Constructive Link Building Through Clients (Except Guest Post)My Profile

    • Sue Price May 19, 2014, 4:56 PM

      Hi Monkia

      Thanks for visiting my blog and for your feedback. I appreciate it.

      Sue

  • Arleen May 17, 2014, 8:31 AM

    I sold real estate for years and what I learned is that when you are working for a commission, people become greedy. For example a customer calls in and asks for you and the person answering the phone says you are not in, can they help you. Most people want answers and help immediately. I saw more cat fights then I care to mention. When I started my business I decided no one would be on a commission. I didn’t want someone to say to my customer, I can’t help you because…… is not in. Since I am not selling online the many are, my situation is different

    • Sue Price May 19, 2014, 5:03 PM

      Hi Arleen

      Oh yes people can become greedy when they are working for commission. It was the same in the Financial Planning industry when I was in that. I mediated many a disagreement between our planners. I think it is a little different in an online sense as we answer our own phone and have our little businesses and commission is the only way really affiliates can be remunerated. I hear you though.

      Thanks for your comment Arleen.

      Sue

  • Sylviane Nuccio May 20, 2014, 12:30 AM

    Hi Sue,

    I’m not able to listen to the video right now, but I can’t not imagine how anyone could pay 100% commission. This has to mean that they get zero for themselves, doesn’t it?

    On the other hand, the more you pay out in commission the more people will want to sell your product and in the end the more money you will make, if you reserve some of the money for yourself, that is :)

    Thank you for explaining all that so well, and will listen in to the video later today.
    Sylviane Nuccio recently posted..Subconscious Writing How It Can Help You Write Better And FasterMy Profile

    • Sue Price May 20, 2014, 6:15 PM

      Hi Sylviane

      No matter how much people sell for you if you take zero percentage it will still be zero you make. But if you charge an affiliate fee then it works. If you get time to read the other comments here there is light shed on it and some great ideas.

      Thanks for your comment Sylviane.

      Sue

  • Barbara Charles May 21, 2014, 10:49 AM

    Hi Sue,

    As I started reading this, all I could think of was yes so true. How was it possible. If Empower Network has grown that is awesome and as business owners we always want to grow. Learning those lessons make our business viable and survivable which is a great thing. I’ve never understood all of this so thanks for explaining it to us. Great post.
    Barbara
    Barbara Charles recently posted..13 Ways To Engage Twitter FollowersMy Profile

    • Sue Price May 21, 2014, 4:10 PM

      Hi Barbara

      It has been an interesting journey watching firstly Empower Network and then the others who have followed and tried to copy the model. Yes I agree we all need to learn and to grew. Business is about finding what works and what does not work and making adjustments as you know.

      Thanks for your comment here Barbara

      Sue

  • Pankaj June 21, 2014, 2:01 AM

    I always tried to work on CPA but never get positive results. Thanks for this info on 100% commission truths. This is amazing how you explained everything with the help of video and this article.
    Pankaj recently posted..Z Launcher APK for Android Download, Nokia’s Z LauncherMy Profile

    • Sue Price June 21, 2014, 4:35 PM

      Hi Pankaj

      Being a CPA is good but not for everyone. :-)

      I am glad you found my explanation helpful.

      Thanks for your comment here Pankaj.

      Sue

  • Jason July 7, 2014, 11:23 AM

    Hi Sue,
    The word residual has the word dual as in 2.
    I somewhat agree still for residual income it is very hard to get 100 percent commissions. An affiliate is just that an affiliate.
    Jason recently posted..Kim Kardashian Trades In Hamptons’ Bad Cell Reception For NYC!My Profile

    • Sue Price July 9, 2014, 10:38 AM

      Hi Jason

      Wow I have never realized that about the word residual – but of course it contains “dual”. Yes I agree an affiliate is just that but there are definitely better deals with some.

      Thanks for your comment Jason.

      Sue

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