After my review of Bigorilla web hosting, I started thinking about how their commission structure was designed to make the founders money, not the affiliates.
So it makes sense to create your own web hosting MLM, so that you are the founder. And here’s how.
First step is to secure the web hosting for a large number of affiliates. Go to Hostland.com and click on the “Reseller Hosting” link. You can get 5,000 websites for $50 a month. If you want to be generous and offer MySQL databases to your affiliates, that’s an extra $50 a month. We’ll assume we’re going all out and paying $100 per month.
We’ll take one of those 5,000 sites and setup our main MLM page. We’ll also install some scripts that we can offer to our affilites, such as URL rotators, autoresponders, etc. We can get those scripts for free, and modify them as needed (throughout this, I’m assuming you have a partner proficient in PHP coding).
So we have our product we’re going to charge $19.95 a month for. Before we can actually sign up affiliates, we need some software for keeping track of the downlines. We can get this for free, or pay for a more professional version. We’ll splurge and pay $69 a month for MLM Software Pro, and our partner will integrate it with Hostland’s billing software.
Our total cost per month is $169, plus our time.
Let’s assume we have a commission structure like Bigorilla. 15 levels deep, making $1 on your first level, $0.75 on your second, and so on. The first people we recruit pay $19.95 a month, but we get all of that. If we use a 2x force matrix, we’d have two people on the first level, for $39.90. If we can fill out the second level, that’s 4 more people at $18.95 (we give $1 to their sponsors). Our grand total is now $115.70. We need just 3 more people at the third level to break even.
Even when we get down 15 levels, we’re still making $10 per person. By the time we get to 5,000 members, we’re making more than $50,000 a month, and can easily afford to invest in a dedicated server or two to raise the quality of our web hosting. Granted, I doubt we’d get to 5,000 members, but anything past 9 is pure profit.
I’m not entirely serious about this, but looking at the numbers from the founder’s point of view helps to illustrate why the best MLM programs give generous commissions to their members. There’s simply a lot of money to be made by running an MLM opportunity, and it doesn’t make sense to not give your members as much of it as possible. Skimp on them and they’ll leave, and you’ll watch your nice large matrix evaporate from the bottom up.