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The world has seen multifold growth in the Direct selling industry in the last decade. The direct selling industry is also known as Network Marketing or Multi-level Marketing. Especially in India it’s a billion-dollar industry. So, you are already running your own MLM company or planning to start then this is the perfect article for you.

We will refer MLM for Direct selling or Network marketing or Multi-level marketing in this article.

There are a bunch of factors you should consider before designing your MLM company business plan. And if you are with this industry for more than a year then you can understand how important for MLM company to have good business plan. Let’s discuss the factors that play a major role in designing the MLM business plan.

These are the factors you should consider:

1. Package Amount
2. Product cost
3. Distribution to network
4. GST to be paid
5. Company profit
6. Admin charges

These all factors must be considered on package amount and single package so you will have a bigger and clear picture.

Let’s take an example so you guys can have more clarity

1. Package Amount: 10,000 INR
2. Product cost: 2500 INR
3. Distribution to network: 60% (6000)
4. GST to be paid: 750 INR
5. Company profit: These are the outcome of other parameters
6. Admin charges: 5% of the payout

Here in this example we have considered Indian company and taken digits in Indian Rupee (INR). Now I will explain how and why we have taken these figures.

• Package Amount

The package amount is totally independent factor and must be considered 1st to go ahead. So, if you are not sure about your package amount you can not go ahead with plan designing.

• Product cost

This is the factor that comes after only the package amount. We must keep this in the range of 20% to 30% of the package amount. So I kept this in 25%. You will be confused that how to manage product cost by 25% and show it’s value 200% but don’t worry YAKS Group (www.mlmservices.in) will help you to do that.

• Distribution to Network

This includes the amount of Binary amount, Direct income, Rewards, Royalty and any other type of income you want to provide to your leaders. We advise to keep it in a range of 40% to 60%. Depends on which type of business plan you are going to work amongst binary or matrix or generation.

• GST to be paid

You need to pay GST on your package amount and give the invoice to your network of that amount. We know how to save GST legally while designing your business plan. We can even in slab of 0% GST also. YAKS Group will help you with it.

• Company profit

This is the outcome of the other parameters. So Formula will be
Company profit = Package amount – (Product cost + Distribution to Network + GST)

This profit will be on a single package.

• Admin charge

Amin charge normally lies in range to 5% to 15%. It depends on company priorities and their network. We advise to keep it 5%. We deduct from the admin charge from net income.

So, Try to design your MLM company business plan keeping these factors in mind and still, you are confused you can drop a message here or visit MLMservice – YAKS Group company.

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