MLM calculators - The need for a simulator & its necessity!

MLM calculators - The need for a simulator & its necessity!

Nikhil Ravindran
11 Dec, 2019

“It’s always a fancy decision to burn your instincts and come out with flying colors. It was challenging and hard to calculate the profit margin. We need to join the system by choosing a package, then complex commission calculation, etc.

You never understand how much profit you get by means of compensation, etc.It's not easy to calculate a system in a piece of paper or software unless they provide a simulator."

We always need to consult an expert to analyze the financial side. Well, it’s a hard task to make a decision from such inferences.”

- by a young direct selling entrepreneur.

A normal or a beginner in the direct selling business is always obsessed with this marketing model. But unable to find the best source for initial financial assistance. Even the experienced people in the industry faces difficulty while analyzing business calculations.

Calculations, direct selling business model in its core is full of such complex calculations and it’s an endgame if things go south.

How to find such vital results without consulting any dedicated experts? Are there any such possibilities?

Yes, there are options apart from finding an expert opinion. The best solution is finding free MLM simulators or MLM calculators. Give the inputs, and simulate the required output!

We will see the importance of a simulator. Also, how it helps direct selling entrepreneurs or an organization with its advantages!

MLM Simulator - The need & advantages explained!

As we mentioned above, there are many reasons and challenges that made developers come up with a brilliant idea - MLM calculators!

There exist many compensation plans and they have it’s own unique working rules.

Understanding them all is also a tough call and might need a plan consulting team to get a clear idea! Yet, even after understanding the marketing plan, it’s very much important to know the financial funnel process.

What is this financial drilling funnel process? We will explain in the next section of this article. One must understand such terminologies to know deep about the financial side of a business.

After understanding the plan and its implementation, the next factor one must consider is - "Financial funnel process". The process consists of three stages:

  • Package details/Initial cost
  • Compensation structure
  • Miscellaneous/other expenses
Package details/Initial cost:

The primary concern of every organization will be the initial cost, this introductory detail initializes with the currency which the business operates. The compensations and rest of the money-related factors will be based on the selected currency. Secondly, the joining fee of distributors and finally, the product or service cost.

Secondly, the joining fee of distributors and finally, the product or service cost.

The package details are usually, the organization charges levied from the new distributors as well as the product cost. The financial side of business triggers from this point - the initial step!

Compensation structure:

Compensation is the fuel that keeps the distributors attracted to a business. An organization can decide and set the percentage of different bonus & commission values.

The compensation structure varies from plan to plan. And calculators are effective while making the decision. Apart from setting the compensations, the next factor one can set is compensation capping.

The organization can set a capping value to limit the distribution of business volume. It makes sure the distributor efforts are not limited over a day and it spread out regularly. It brings steadiness in business and it’s best for hard performers!

Miscellaneous expenses:

The final stage of the financial side will be setting the extra expenses of a business. Here the applicable taxes, business charges, admin fees, etc. included for finding a final output!

These three stages are to consider on the financial side and known as the ‘financial funnel process’. The financial side of the direct selling business funneled down to three stages.

An MLM calculator is well developed based on this process. It keeps the business team to have a very good idea about the financial side of the business before starting a product business.

MLM calculators - A proper guideline about it!

Considering the above factors, Epixel has developed a useful tool. Here the visitors need to provide the input and the calculator will simulate the output!

At present, calculators are available for three basic plans - Binary plan, matrix plan, and unilevel plan. We will now learn more about each calculator in detail, and the profit after the initial costs.

Here to find the desired results, we are using MLM calculators developed by Epixel MLM Software developers.

Benefits of using an MLM calculator

We have already discussed the need for having an MLM calculator. But there are other reasons for having one for your initial or later part of the direct selling business.

  • Manual pre-calculations are no more required
  • Business analysis can be perfectly carried out before starting your own business.
  • If you have any dilemma’s about the bonus or compensation calculators, then provide the input. The simulator does the remaining job.
  • Even in the mid-stages of direct selling business, a calculator can use to check the financial side of future
  • If someone likes to switch between the plans then they can use the availability of the simulator and match between the plans.
  • The probabilities of manual calculation errors are minimal.
  • The complexity of adding new bonus adds upon request to the team who developed the calculators.
  • Most of the advanced calculators are free of usage

It’s considered one of the best tools available. We hope you have understood the usage of an MLM calculator for your direct selling business.

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