What is the second key area on selecting an online business?

In my previous post on Nov 9th,  I outlined the 5 keys to consider and research before selecting an online business.  On Nov 10th I discussed the first key.   This will be part three of a 6 part series.

The second key area to consider is Compensation Plan:

1.         Is money made at the front end/back end?

  • Front end compensation plans are those that offer money quickly based on customer initial purchase.  Products that are used but not used up fit into the front end plans.
  • Back end compensation plans are those that help you build a list of long term purchasers.  Products that are used up [foods, vitamins etc] or have a re-occurring monthly fee are examples of back end compensation plans.

2.         How long will it take to start earning money? And how much can I earn?

  • The time depends on the time you have to devote to your business and other aspects such as training, support that will be discussed in later articles.
  • The amount of money you can earn can be computed by considering how many leads you need to have to make sales.  The calculation formula does vary from company to company, but it is worth checking this detail.
  • For example if  there is a $200 commission on a $500 item you would have to sell 5 of these to gross $1000.
  • If you earn 15% on all you sell over your ceiling amount:  If your ceiling amount is you buy $100 per month and sell at least $200 more to earn a commission and you sell $700.  You would earn 15% of $400 or $60.00.

3.         Whether earnings are at the front end or back end, what are the requirements to earn money.

a.         Do you have to do something to qualify for compensation?

  • Some companies require you to purchase a specific amount before you can earn any money based on your sales.
  • Others require a certain amount of sales each month before you start making any money.
  • Others require both – a specific purchase and a certain amount of sales.

b.        Is compensation made by percent of sales or flat fee for specific product?

Some beginners do not research this carefully only to find that “if they had purchased a few dollars more or had one more sale” they could have made money.  They missed the mark and forfeited money.

Don’t let this happen to you!  Make sure that you understand the compensation plan and that it is one that works with your goals and investment ability.