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I still get this question now and then from those with doubt who are not in the MLM telecommunications industry. Sometimes this issue is manipulated by individuals to recruit someone from another company, but often there is just simply a misunderstanding of the MLM telecommunications industry. This article is intended to shed some light on residuals in telecommunications network marketing.

BACKGROUND

Years upon years ago in my younger days, I joined my first network marketing company--Excel Telecommunications. The money was amazing. There were individuals in their 20s driving Ferraris and Porsches! The company went bankrupt not because of the structure, but because of shoddy corporate leadership that changed hands many times and unethical practices of many distributors that bled the company to death. Bonus money was huge! Residual was lacking because the long distance industry didn't pay much. A friend of mine who was a top 150 income earner in Excel had, at most, a $400 customer residual income. That is with over 3,000+ representatives! This is probably where the current myth about no residual in MLM telecommunications stems from.

However, if the residual income was so shoddy, which has been a common argument, then why were there so many individuals making large incomes? What is missing in this equation? If we simply base income on the long distance residual aspect, we are missing a very large detail.

Simply put, upfront bonuses were paid in order to make up for the lack of residual income in the commission plan. The theory was: pay upfront bonuses while the residual income builds up. For example, in Excel, as an Executive Senior Director, when you sponsored somebody at $399, you'd get a whopping upfront bonus of $425. So basically, that $425 made up for the yearlong residual income, all up front!

So, why wasn’t all this bonus money considered a residual?

In addition, when your distributors recruited others and they got two customer points, you were paid. There were those who built a large organization who were making huge incomes from the bonus income. Isn't that residual as well?

TODAY

Back in the old days, perhaps it was true that residual income from customers was shoddy, but not anymore! Today, with the advent of new technologies and alliances, there is certainly a residual income created in MLM telecommunications.

For example, Lightyear Wireless has a relatively high payout on their $49 web system with up to a $24 monthly payout including overrides. As a Vice President, a person could be making $11when an individual pays his/her wireless store dues. On a $49 monthly fee, that is an amazing payout considering most nutritionals (including shipping) are around $120-140 for a $5-8 payout (income wise). And, this is only one aspect of residual.

There is also bonus income--income from customers or the 1-4% paid on cellular customers. Lightyear is the only company to pay on actual wireless bills. For a 1-4% payout on a $60 (conservative) bill, you are making $0.60-2.40 per phone, and it is realistic to have multiple phones per representative. So that means you could have the web system + cellular residual + any other extra customers + upfront bonuses. As far as I'm concerned, there is an actual residual.

Not all companies have gone this route. ACN has chosen to go the video phone route and to raise the residual payout on the lower levels, with the older theoretical payout that most of your representatives would be on your lower levels. Although slow to change, this is a great alternative to an older "Excel Style" residual payout where it was 1/4% residual until a representative reached certain levels in their organization.

5Linx has chosen to have a "coded" payout where a person could reach up to $3-4 on their VoIP or digital home phone. The company also has a web system with a lower payout.

So, enough with the, "There is no residual in MLM telecommunications”! The bottom line is that statement is ridiculous!  Look around. Are there people making money in MLM telecommunications companies? Is there success? If there is, then some kind of income is being generated, so the myth of "no residual" in telecommunications should be put to rest!