90% Pay Out! Not As Good As It Seems!

Many programs proudly announce that they have a high percentage payout to members and clearly this is something dear to all our hearts. The greater the percentage of received funds distributed the greater will be the income of the members.

It is worth looking at the full effects of this situation on all members rather than thinking of the benefit as something we can all enjoy in full.

A simple business basic is the fact that every business has certain operating costs that must be met from their total income. For an online business there is the cost of domain names and hosting, help desk support, administration and possibly programming and promotional costs.

There is no disputing the fact that to have 90% of the funds available for distribution is a fairly satisfactory situation and would seem to offer significant benefits to participants.

I would like now to consider a hypothetical case so that we can see just how good this 90% payout really is.

I will assume a program costing $50 per month with a membership of 1 million people. The structure of the matrix is not really significant in the calculations I will do as we are applying some business basics and looking in general terms at how the money can be distributed.

I will also assume that there is a scale of incomes with some members earning relatively good incomes and members lower in the matrix earning lesser amounts.

Total funds available to distribute amounts to $45 million.

The table below shows how far down matrix this money can be spread assuming 1% of members are earning a good income and income levels progressively reduce for each next group.

 Members  Monthly income Total

10,000  $4000  $40,000,000
1,666  $3000  $  4,998,000
1  $2000  $         2,000

As you can see the total that is available will reach 11,667 members at just a reasonable level of income. This means that, in this case, 98.83% of the members will receive no income at all

It does not matter how you structure the matrix or what other figures you use there will always be the vast bulk of members earning much less than an acceptable income.

Learn how to apply some business basics and save yourself from joining the doomed programmes in the first place.