Here is an Article For you… Why do MLM Software providers charge Monthly and Per User Fees?... Shouldn’t MLM Software be FREE?
We receive a plethora of calls, ranging from experienced to inexperienced business owners. Experienced owners of tech companies, are aware of technology expenses. Inexperienced owners will often ask why MLM Software companies charge Monthly fees, and often Per Distributor Fees.
In short, your MLM Software provider is your technology partner, responsible for maintaining your online presence, and scaling it, as your company grows. By having monthly fees, and specifically, per distributor fees, that grow as the distributor base grows, the anticipation is that the back-end hardware, platforms and bandwidth can scale with your growth.
Inexperienced companies seem to be generally unaware of these costs, so I have some research, to put things into perspective. For the record, this information has been researched from various sources, including news accounts, corporate filings, and more.
Take a service, seen as free, like Facebook.
- At the Start, Mark Zuckerberg was paying $85/mo for the first few months, back in 2002.
- Schippers estimates that Zuckerberg’s costs increased in the first year, to average about $3,000 per month on hosting.
- A couple years into business and their Hosting Costs were about $60,000.00 per month and growing.
- Then, about $10 million per month by 2006 as the network grew exponentially in that time period.
- ..In 2007, breaking down reports, filings, investor disclosures, etc, they are spending an estimated $1million per month on electricity alone. You see, by this time, they had already shifted into data center leasing, where hosting costs are more complex to state, in that the data center to run the server has costs. In fact, they even took over some Power Plants!
- In 2008, there is mention of earmarking $100million to buy 50,000 servers this year and next.
Yet, still today, in 2017, folks view Facebook as a Free Service, and many can not comprehend the back-end costs and growth, associated with a large user base. You see, as users, we see the internet and sites as free, but as a business, we must understand there are true costs and they grow quickly.
Further, using Facebook as an example, the content delivered is Text and an Image. Nothing Crazy, only Volume.
MLM Software is asked to pull hundreds or thousands of data-points, for EACH Distributor, as Each refresh or access a Back Office, to deliver relevant data. Often times, after pulling those data-points, relevant logic must then occur, applicable to a particular compensation model.
Now, multiply your reps to 100 or 1,000 or 10,000 or more. There is no direct comparison of Facebook to MLM Software. In fact, the resource and logic at work for MLM Software is completely different, and much more intensive, per user, than Facebook.
Yet, from investigating estimates of Facebook's costs associated with a network of users, you are now aware of the importance of insuring the scalability in funds and technology exist.
There are various factors those effects the features of MLM Software which includes version of the software you want to purchase or level of your budget. It means, if your budget states your decisions, you may have difficulties in achieving success from your business. Click to learn more about MLM Software
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