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3/28/2012 1:49:47 PM EST
|"Point Value to Cash Calculation"
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Point value, or PV in most network marketing, usually relates to a monetary value that translates into how much money you will get after purchasing a product from the company. An illustration would look like this:
Let’s say, a product costs $100 and each dollar spent on the product gives you 1 PV:
I get paid on 100 PV for purchasing $100 worth of products and if I am eligible for 10% override, I earn $10 Hence the dollar to PV ratio is $1:1 PV – a dollar to dollar equal comparison.
Sometimes, the same price of a product will only give you 0.5 PV for each $1 spent.
I get paid on 50PV for purchasing $100 in this scenario. If I am eligible for 10% override, I earn only $5 hence the dollar to PV ratio now is $2:1 PV – you don’t get as much as 1:1 because you have to spend more to earn more points.
Certain companies might give away promotions for products and offer $1:1.1 PV so if you buy $100, you get paid on $110 value. At 10%, I earn $11 – more commission from the company on the product for less spent buying it.
Downline Building Strategies
If I need to generate large volume for my group this month, I would ask my Downlines to focus more on selling or moving products that give a higher point value. That way, everyone spends less but earns more.
Products on promotions usually give a higher PV ratio. Other products that are outsourced (acquired from outside companies) usually give either a smaller PV or the same PV but a smaller business volume because they have to pay to the outsourced company as well. These products pay the distributor less but give more variety on the business catalog.
Starting a New Company
Giving a high dollar to PV ratio usually encourages the distributors since they get paid more for the same effort. If I were to focus on moving high ticket items (like water filters, air treatment systems or expensive cookware) I would offer a higher PV incentive to distributors to move these items and go for the big bucks.
This was taken from Rod T Stinson's eBook "Network Marketing Structure ~ Part I, Point Value to Cash Calculation", Co-Authored by Cheryl D Stephenson
Cheryl D Stephenson
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