FHTM (Fortune High Tech)

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Fortune High-Tech Marketing (FHTM) is a services-based network marketing company that has been hitting Canada for the past couple of years. They have a variety of different “best of breed” (by their words, I’ve heard less flattering reviews of some) services and a few random products that they market to their customers. To me it looks like a confused jumble of random things thrown together – and the members end up paying for a bunch of them for themselves to try and qualify for ranks later… so your monthly could be in the 100s of dollars, only some of which is replacing spending you already do.

Services include their back office software (that’s an EXTRA service for $20/month), Identashield, Nutritionals, Dish Network satellite, Unified Messaging (pushed on members as well), Long Distance (pushed on members), Health Care Card, Easy Web Hosting, Paging, Virtual Internet Provider, as well as magazine subscription sales.

I even found their Fast Start training if you’re interested in knowing more about their hype machine, guilt-based pushy approaches, and some decent other training:
http://fhtmbiz.com/uploads/StartYourTrainingNowDoc.pdf

But what about their compensation plan? They tend to gloss over it in their presentation, and not focus too much in the training – other than to hype some potential results.

Its another Unilevel, with a heavy ranks focus, and a lot of up-front money with tiny residual.

The focus is on recruiting people and helping them get a certain number of customers. You can sponsor any number of people on your level 1.

At the beginning:
– If you sponsor someone, then help them get 3 customers within 6 days, you can get $100.
– You get a monthly 2-20% of the spending your personally enrolled Customers – but only if you have 3 ACTIVE customers
– You get overrides of $5 to start on downline Managers who get their first 3 in 60 days on levels 2-7, and $10 on level 8.
– You get 1/4% of the monthly spending of people on levels 2-7, but only if you have 5 personal active customers, and 2 personally sponsored Managers who have 3 active customers
– You get 5% on level 8 spending, but only if you have 10 personally active customers, and 3 personally sponsored Managers (with 3 active each)

So that’s a lot of focus on helping people do things right away – which encourages fast growth and bonuses. And the residual is tiny. But a strange focus on this exciting level 8. There’s a big push for you to sponsor 3 Managers and get 10 Customers as soon as you can, because without that you don’t qualify for much at all.

They give you nice projections that if you sponsor 3 and have 10 customers, and help them do that, and them do that, etc… then at level 8 you’ll have 6500 members and 65000 customers and 80,000 per month residual! But most of your money and residual would be coming through level 8. And of course noone has ever done that. And if you do 10% of that it won’t be the $8000 they mention, it’ll be far less. Because 10% of sponsoring 3 is getting nobody. And 10% of 10 customers is 1… and no payout. 1% is nothing at all. So they show you the moon, and see how a slice of the moon is amazing. When instead its crushed rock.

So what happens next? Well, you want to keep qualifying for higher ranks, by jumping through hoops and staying qualified for them.

Ranks!

Regional Sales Manager (RSM):
– Residual % adds 1/4% on level 2-7, 1/2% on level 8
– $50 extra bonus on all new qualified managers beyond your 1st RSMs, $10 to the next RSM – breakaway overrides.
– Requires 3 personal Managers, 10 personal customers, minimum 12 Managers in team

So now we see breakaway overrides coming into play – where as you help your people hit a rank, they cut you off from these override bonuses. And they are THE MAJOR source of income up front. So you have to maintain your rank and stay ahead of your people, or they start quickly cutting you off from your bonuses. In many cases you want only a minimum of downline people to do amazingly well, but just below you, and then the rest fall just short.

Executive Sales Manager (ESM):
– Residual % adds 1/4% on level 2-7
– 1/2% on on level 9 and beyond
– $60 extra bonus on all new qualified managers up to your 1st ESMs, $20 to the next ESM, $10 to the next ESM – more breakaway overrides. They’re piling up for the top guys!
– Requires being an RSM, 3 personal Managers, 15 personal customers, 6 total RSMs in at least 2 legs, minimum 90 Managers in your RSM group (between you and the nearest RSM)

This gets a lot more residual potential kicking in, but is a lot of up front and ongoing qualifications. Fall just short and your money goes to ESM above you.

National Sales Manager (NSM):
– Residual % adds 1/2% on level 2-8
– 1% now on level 9 and beyond
– $30 extra bonus on all new qualified managers up to your 1st NSMs, $10 to the next ESM, $5 to the next ESM – more breakaway overrides.
– Requires being an ESM, 3 personal Managers, 15 personal customers, 6 total ESMs in at least 2 legs, minimum 90 Managers in your RSM group (between you and the nearest RSM), 540 in your ESM group

You need to develop a lot of people to very specific levels in specific legs now to qualify for these extra bonuses.

President’s Pool
– all of the above + 1620 Managers in your NSM group
– you get additional overrides on the entire company!

Quick Start – you can also get a matching bonus when one of your personal people gets their bonus for their person getting their first 3 customers. So it is an extra incentive to help people hit that target.

So obviously a HUGE proportion of the payout is paid in bonuses based on managers acquiring new customers… and only a tiny amount is paid in residual income. And the higher you go, the more overrides you get, and the deeper in your team. But to qualify for the next level you have to raise people higher, which cuts off some of the more lucrative overrides on their team because they’re a higher rank now. So you’re getting a smaller and smaller piece of bigger and bigger action. But if people come and pass your rank, your income can be cut in half overnight. Try being excited when your best leg leader gets promoted to the rank above you! Fake smiles all around!

The verdict?

There are people at the highest ranks making a LOT of money with this company, from the overrides as new managers are recruited and recruit new customers. They’re making a little residual too. New people CAN make money fairly quickly, but with no hope of getting any real residual for a long long time. So a lot of people get in, buy the hype, recruit a lot early, buy a lot of services for themselves… and then hit a wall when they struggle to advance past the 2nd or 3rd rank. Most of their people never make the 2nd one, and quit soon. And then they get discouraged and quit as well – dissatisfied with the services they’re getting. So a lot of people come in, then a lot of people quit. But the big leaders stay in business making tons of overrides on the remnants and the new growth. I know a lot of people who got in, and 6 months later quit – even ones that made money early, because its just a sales job… there’s no real residual. And I know a handful of big leaders still in and pumping up their next generation of excited people who will make the big leaders a lot of money in the next wave, and the next wave… before they ultimately get sick of it and join a new company themselves because of the lack of residual.

At the end of the day, FHTM has way too many “GAME-OVER” clauses as per the training.  Ranks, low residuals, legs to build, etc…  GWT still the clear winner.

http://ourgwt.com/ourblog/compensation-plan-pitfalls/