A thousand questions need answering when you’re launching your new MLM business. Deciding on a software to manage your business should be near the top of that list. Traditional MLM pricing for software can leave your company in the red before it even gains momentum. For many new business owners, the thought of adding extra starter costs doesn’t alleviate the fear of business failure they already carry. When it comes to one of the most popular questions we get asked, “How much does MLM Software cost?” we’ve found a pricing solution that our customer swear by! Watch below as Jerry Reynolds, President of Trinity Software, sheds light on the typical costs that other MLM software providers will hit you with, including all of the startup fees, distributor fees, hosting fees and per-transaction fees.
Top 4 Typical MLM Software Costs:
1. MLM Startup Fees
So, how much does it cost to start an MLM company? Well, there’s a myriad of MLM software costs and fees that your typical software provider will greet you with. The first fee you’ll encounter is a startup fee. An MLM startup fee can run between $15,000 and $50,000 depending on your specific needs. On average, a company will spend $25,000 on this one-time MLM startup fee, just to launch its system. Ouch!
2. MLM Distributor Fees
Typically, MLM companies will be charged with distributor fees – a monthly charge per active user on your system. These MLM distributor fees range from $1 per distributor to up to $5 per distributor. As your company grows and you gain more direct sellers, your monthly distributor fees will skyrocket in kind and blow your monthly budget out of the water.
3. MLM Hosting Fees
A hosting fee is a monthly charge that a software company can charge simply for hosting your system online. This ranges from $500 to $1,000 a month. Of all the MLM software costs the other guy will throw at you each month, the hosting fee will typically not increase. However, it is another monthly charge to consider when shopping for a software system.
4. MLM Transaction Fees
Lastly, with a traditional MLM pricing model, you can expect to pay transaction fees. Software companies may charge you around $2.50 per order placed through your system. Depending on what your profit margin is on your product, transaction fees can quickly eat into your profits.
Traditional MLM Software Costs Suck! You Read That Correctly.
With traditional MLM costs, you need to ask yourself, what is your actual annual growth plan with an MLM system like this? How are you going to support your team and grow your business with a provider that increases their costs as your business grows? Shouldn’t there be a celebration when your business grows, not additional fees that feel more like a penalty for your hard work? What would it do for your business if you used Trinity Software’s Firestorm, a system that eliminates and absorbs your costs, so you are free to grow your business, stress-free?
Contact us today to discuss your software needs and eliminate growth-punishing fees once and for all!
Hi everybody. Welcome back to our video series as we begin discussions on the number one subject to people want to know, how much does it cost? What’s the price? What I thought I’d today as we would have a quick discussion about there’s three or four different pricing models that are standard in the industry. I say standard, that are typical in the industry and what we want to do is talk about what other vendors do and what we do and why we’re different. So, let’s just get started.
Start Up Fees
Typical, the most common is what is called a start-up fee. Now start-up fees sound kind of innocuous but it’s not really when you find out how much it is. Basically, a start-up fee is an amount of money that you’re going to pay basically for nothing. It’s a fee, that’s truly what it is. Typically, these fees run anywhere from $15,000 on the low end to $35,000 to $40,000 on the high end. Sometimes they are as high as $50,000 it depends on what you’re buying what you asked for. So, let’s just get it we’ll just go with the median amount and we’ll say $25,000 as a startup fee.
Now you think that’s a one-time cost, true and that’s all I have to pay ever, well that’s not quite correct. This particular pricing model also includes a per distributor fee and that can range anywhere from a $1 per distributor to $3 to $4 per distributor ok, so let’s go with a median price of $2 per distributor. Now what this means is it for every active person in your system they’re going to charge you $2 so if you have a 100 active people it’s $200. That still doesn’t sound too bad. But if you have a 1000 people now all the sudden it’s $2,000 and if you have 5,000 people now all of a sudden $10,000. This is a monthly charge folks! It’s not a one-time cost, this is every month, so as your company grows, your costs are going to grow exponentially because all of us know this is your monthly cost. This is where you start, you pay your start-up fee but it’s a one-time cost 25,000 and then your monthly cost when you first start is going to be real low because you haven’t got anybody enrolled yet, but once they start enrolling you don’t have to pay the 25,000 again. But now let’s say you grow and had to pay $1,000, then $5,000, $10,000. You can see very quickly your company’s doing really well but your costs are uncapped. They’re not going to stop charging you as you grow.
Cap Your Fees if you buy from Others
There are different features of this type of setup. You can negotiate a cap and if you end up with something like this. You’re not getting this from us but if you should go with a vendor that does this negotiate a cap because there’s no reason they should continue to hammer you for more and more money just because you’re growing, that’s the whole point, right?
We don’t stop here folks there’s also typically there’s a hosting fee. This is also a monthly charge and it can vary anywhere from $500 to $1,000 a month. Typical is around a $1000 so let’s just put that in there too. Now that fee won’t go up unless they have price increase, this is where the danger point is right here. You go from I paid $25,000 to set up and remember $2 is just kind of the average this can be $3 $4 or $5 per distributor depending on what deal you work out then you have $1,000 on top of that. It adds up very quickly.
This is not the end of it either. Some of these companies that have this pricing model will also have the transaction fee. Now what is a transaction fee? For every order processed through the system there will be some fee associated with that. Now everybody doesn’t do this but there are some to do so you need to ask this question because it will be in your contract. Typically, it might be $2.50 an order and the reason they charge this is because this monthly cost only applies to members and distributors. The transaction fee would apply to customer orders. Now, depending on what your profit margin is on an order this could really start cutting into your profit as well as this.
Growth vs Expense
So, you have to take all of this into account and what is your annualized cost going to be? What do you think your growth is going to be over a year? You have to not only look at this $25,000 but you also have to look at what is my projected growth? Well nobody’s going to say that they’re not going to grow. You know you need to plan on growing 1000 to 2000 distributors your first year and then figure that cost and average everything over the course of the year. You’re going to end up paying the Startup fee, distributor fee, the hosting fee, and transaction fee. You may end up paying $5,000 to $6,000 a month. A very expensive model.
So, what is the alternative? I know what you’re all thinking right now, this sucks. So, I agree with you, that’s why we don’t do it. So, let’s get to some other models.