Keller Williams Profit Share Model Demystified

In my last post I had a few things wrong. Namely, everything. I recently sat down with Aaron Kaufman the leading recruiter for Keller Willliams and discussed what KW is about in great detail.

Aaron was adamant about not talking about Profit Share. His philosophy is that when he talks with prospective recruits that it's not about the money. After spending time with him I would tend to agree with this, that profit share is the gravy for joining KW and not the reason.

However, this is the internet and people want to know. So here goes the profit share model again:

Let's Say Bob sells a $1,000,000 home and nets a $30,000 commission. For the sake of being easy, lets also say Bob is on a 70/30 split with KW (keep in mind that it caps out at $18K - so he's half way to capping). So he's giving $9,000 to the market center. Now let's say after all is said and done for the month that the Market center that Bob is in makes a $40,000 profit out of a GROSS of $90K. Now that (the $40K profit) gets split up between the owner and the agents (yes, the agents!). Now you take the $20K and you take Bob's contribution (10% of the overall gross), you'll get $2,000. Now for the fun part.

Now, using our previously incorrect post as an example, John (Bob's recruiter) would receive a whopping $1,000.

Levels 1 thru 7 are as follow: 1. 50% 2.10% 3. & 4. 5% 5. 7.5% 6. 10% 7.12.5%

Now that I've posted this I hope you see how valuable this system is. The genius is that if your with KW you're paying out the 18K to the market center to use all the resources. It's a bonus that you'd get anything back. As you'll see in upcoming posts, that this system will actually promote equality and comraderie.

It's becoming more obvious that the jaded opinions I had of KW were false and that beneath each "business" idea that seems to take away from the agent, it's actually another tool to be harnessed by a savvy business person.

Next Time: The Pyramid Scheme of Keller Williams!

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.