Thursday, April 26, 2007

Keller Williams Profit Share Model -

I recently discovered the inner workings of the profit share model that KW implements that makes it incredibly transparent. It doesn't take away from the company, but to me, personally, it eliminates it as a reason to join. Basically, it goes from the Steak to the Gravy.

Here's how it works:

Let's say, my name is BOB and JOHN recruits me. Also lets say my split and cap for the market center is $15,000. What was the big AHA for me is that after this $15K is paid, BOB is no longer sending profit share to JOHN. In a really easy math scenario, if John gets 100% of the money, he would only get $15K. Now that may seem like an obvious thing, but they way they present it to you will make more money in a more profitable Market Center. Now I'm guessing that if you have a market center that is not profitable, they dip more heavily into the $15K each agent pays.

Just for information, let's see how the chain works as well:

JOHN recruited
BOB recruited
SUSAN recruited
STEVE recruited
BETTY recruited
JUAN recruited
TANISHA 7th Level

So JOHN will get X% from BOB & TANISHA, 1/2X% from JUAN & SUSAN & 1/4X% from STEVE & BETTY.

X is determined by your % of profitability to the Market Center and I suppose how profitable your Center was.

Previously, I had assumed that other profit sources directly tied to agent actions such as MLS fees (that get redistributed) would have added to the profit share. Instead, it's directly tied and only tied to the $15K.

It's a bit disapointing that it's not deeper than that, but again, KW has so many great things that people will join for, so getting a little back is perfect. In the end, the profit share model ends up being another MLM if it has stand on its own merits.