Digging Gold: The Unseen Costs of MLM Software That No One Tells You About!

 

Updated on Jun 8th, 2022
11 Mins Read

It was an easy choice for Amelia Caldwell, a Multilevel Marketing (MLM) expert based out of Riviera Beach, Florida. She needed MLM software to better manage her inventory, leads, shipping, and sales for multiple network marketing programs. Luckily, there was a software solution that met all her needs with a fixed monthly price per user. She enrolled in its free trial and was more than happy with the results. The choice was easy; the purchase was made!

Thanks to the powerful MLM software, by the end of the year, Amelia doubled her profits to approx. $50,000. She did so while experiencing low error rates, making analytics-driven informed decisions, and putting in less effort than before. Now, she had more quality time for her family, and more moolah in her bank to fulfil its needs.

However, beneath the glittering figures of earnings, users, reports, conversions, and whatnot, there was an invisible cost Amelia remained oblivious to. She had just lost at least $24,940 in her annual income—or nearly half of her overall realised gains!

Are You Losing Your Earnings? The Costs of MLM Software Solutions That Always Remain Hidden

Today, multilevel marketing is back with a bang. And, with it, there has been a rise in MLM solutions that cater to the wide-ranging needs of business owners and network marketers. We can now become more efficient with standardised solutions that fulfil our specific needs. But at what cost?

For starters, let’s begin with the three major payment models that the top multilevel marketing companies are based on.

These MLM payment models include:

1. The Pay-as-you-go Model:

The most widely preferred MLM software payment is inarguably the ‘Pay-As-You-Go Model’. It is a usage-based payment system, wherein the customers get charged ‘per feature’, ‘per user’, ‘per month’, or ‘per annum’. The major reason behind the popularity of such models is that they have a lower barrier to entry in terms of initial capital needs. Also, they offer superior flexibility while scaling up or down in the future.

2. The Freeware Model:

There are certain MLM software solutions that equip marketers with free usage for a limited period or endlessly. Such models either limit the feature(s) usability or the duration of usage. Since these are freeware solutions, marketers are at their own discretion regarding various aspects of the platform, such as security, how the platform uses their data, the platform’s future viability, and so forth.

3. The Fixed Price Model:

Another popular payment model is the one-time, fixed-price payment model. It empowers marketers to minimise their operational expenditure by eliminating recurring costs. Once their MLM solution/platform goes live, all they need to do is reap pure profits! It is while ensuring that they receive constant updates and round-the-clock support, and owning all the features that they initially avail of.

These were the three major payment models that you will come across while purchasing an MLM solution. But, what are their hidden costs?

The Invisible Costs of MLM Software Solutions:

While a good MLM software solution can amplify your earnings by multifold, they may have certain costs that always remain hidden in plain sight. Businesses encounter these costs only when they have delved deep into their customer journey. And, by then, it’s already too late.

Some of their common pitfalls include:

1. The Set-up and Integration Costs:

When you finalize an MLM payment model and solution, the next thing on your mind would be to get it up and running as soon as possible. But, there are certain set-up and integration costs that aren’t revealed by solution providers at the outset. These include the costs of data migration (if any), third-party integrations, customisations, training & support, among others. We must consider all these aspects while calculating the total cost of ownership (TCO) of your selected MLM software solution.

2. MLM System/Platform Ownership

In case of fixed-price platforms, MLM businesses must specifically check if their preferred solution provider extends white-label solutions or immutable ones. The former gives marketers the ability to modify their platform without the consent of their original MLM solution provider. In other words, they have complete ownership of their MLM system. However, for non-white-labeled solutions, marketers do not have this liberty. They cannot change the platform (or add features) until and unless their MLM software vendor allows it. This considerably limits the true potential of their MLM system or platform, especially in the long run when businesses have to swallow the hard pill of migration.

3. The Recurring Charges:

While fixed-price solutions involve a one-time payment, others have recurring charges that increase incrementally. For instance, one of our large-scale eCommerce vendor secured an MLM system on a cost-per-transaction basis. Initially, the cost was low. However, when the platform’s network scaled, it proportionally increased the transaction fees and, hence, operational expenses. For a single month’s transaction fee, the business could’ve easily bought a white-label solution. But since the solution provider didn’t provide other alternatives, it had to procure a new white-label solution from Global MLM Software.

These recurring charges were also the reason why Amelia Caldwell lost $24,940 in her annual profits without even realising it.

Such maneuvers not only result in additional expenditures for businesses, but they also make them lose sales, transactions, and users due to service disruptions.

4. The Downtime Costs:

Every second your MLM software is down, you are losing out on money! We must also factor this cost while calculating TCO.

For example, if an eCommerce website using an MLM solution faces 4 hours of downtime in a month, it would incur a loss of $20,000 on average. This is because such downtimes have a domino effect that causes issues like order cancellations and refunds (because of delayed deliveries), abandoned shopping carts, frustrated customers & prospects – all leading to financial losses.

5. The Opportunity Costs:

An MLM business always has time-sensitive opportunities that need to be capitalised upon quickly. But what if your current solution doesn’t allow you to do so?

In such cases, you either need to wait for the next billing cycle (to terminate the contract) or get your entire platform redesigned immediately! Both these scenarios result in opportunity costs that might run into thousands of dollars‌. Also, there is no guarantee that your target audience will remain engaged until your new platform and its features go live. All such factors make marketers sit on the tappable opportunities that they could’ve easily realised.

6. Limited Customizability:

When you go with a pay-as-you-go model, you are at the mercy of your MLM software vendor in terms of platform design and functionalities. You cannot change your platform unless you shell out extra bucks. So, if your target audience’s needs change over time, be prepared to either lose them or get your entire platform redesigned (and incur huge costs in the process).

This is not the case with fixed-price models wherein you own all the codes from Day 1 itself. You can then get specific features customized as per changing business requirements without having to rework on the entire solution. Also, most vendors offer white-label solutions that can be rebranded quickly–giving you an edge over competition!

7. The Inadequate Documentation & User Support:

No matter how great an MLM software solution is, it will always have some learning curve associated with it. This is why adequate documentation and user support are critical while selecting any such solution. Unfortunately, these factors often remain hidden until we start using a particular solution regularly. A business may stay unaware of the additional features of a platform that can ‌augment its profits. Because of inadequate documentation, it could use the platform for several years without realizing such gains.

Certain platforms also lack key features like ‘direct data download’ that could save us a lot of time while generating reports. Similarly, if we encounter any bugs while using the system, adequate support must be available to resolve the issue quickly–without incurring additional downtime costs. Such factors needlessly delay our operations and affect our bottom line adversely over time!

Then, which MLM Solution should you consider?

Although this question ultimately depends on your precise needs and preferences, experts always suggest to go with a white-label solution owing to its wide-ranging advantages.

Some of these advantages include:

1. You Own the Data:

With a white-label solution like Global MLM Software, the data belongs to you. This is important because it means that you can control how the data is used and who has access to it. You can also make sure that the data is backed up and secure.

2. You Have Complete Control over the Branding and Look and Feel of the Solution:

With a white-label solution, you can brand the solution as your own. This means that you can add your own logo, color scheme, and other branding elements. You can also customise the look and feel of the solution to match your company's website.

3. You Can Add Your Own Unique Features and Functionality to the Solution:

A white-label solution enables you to add your own unique features and functionalities. This means that you can make the solution more powerful and valuable to your customers.

4. The Solution Is Hosted on Your Own Servers, So You Have Complete Control over Security and Availability:

A white-label solution is usually hosted on your own servers. This means that you have complete control over its security and availability.

5. Support and Maintenance:

When you purchase a white-label solution, you also get round-the-clock support and maintenance from the original developer. This means that you can resolve any query as and when you need it.

To wrap it up…

If you are serious about your MLM business, consider opting for a single-payment, white-label, customisable MLM software solution. It will help you drive superior results by minimising your costs, increasing your flexibility, and boosting your return on investment significantly. Godspeed!

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