MLM Binary Plan
What is a MLM binary plan? It’s a common compensation plan used by companies involved in network marketing. Here’s how it typically works. Every distributor has two front-level positions. Therefore, their first level has two distributors; their second level has four distributors, their third level 8 distributors and so forth. This would continue for infinite levels, assuming everyone recruits two distributors.
Typically, distributors involved with the binary plan are paid on infinite levels deep, off the smallest leg in their organization. For example, if one leg of your organization generates 10,000 volume points this month and the other leg generates 2,000 volume points, you would get paid on the 2,000 volume points. Therefore, the secret of success is to try to “balance” both legs of your organization. This is easier said than done.
The binary plan does offer some distinct advantages compared to other compensation plans. The first thing that comes to mind is that your top distributors never “break-away” from your organization. In some companies, once distributors reach a certain level, their volume is separated from your volume and in return you earn a smaller amount from their efforts.
Unfortunately, most MLM Companies place certain volume requirements on the upline distributor to keep earning these “break-away commissions.” And if you only have one or two “good legs” your earnings can decline rapidly once your downline reach certain success levels.
Another advantage of a binary plan is that you can help other people get started. You can help other less successful distributors build a small organization and earn a bonus check. This could help improve retention rates, which helps you make more money.
On the other hand, the MLM binary plan has disadvantages too. Whenever you help someone else build their organization for them, you are teaching them to be lazy. I know that sounds harsh, but it’s the truth. By placing people under other people, you are teaching them do get something for doing nothing. In my opinion, this never has a long term positive impact. Typically, distributors will keep “expecting” you to put people into their organization. I’m not saying the MLM binary plan is a bad compensation plan. Instead, I’m just saying that it’s not one of my personal favorites.
In conclusion, the MLM Binary Plan is a very popular compensation plan in the world of network marketing. The binary plan allows each distributor to have two front level positions in their organization. Typically, they get paid off the smaller leg. This means that distributors have to “balance” their legs in order to maximize their earnings potential.
On a side note, if you are involved with a MLM Binary Plan, I would love to hear from you. What do you like about the compensation plan? What don’t you like? Please share your successes and/or failures with the rest of our online community. To get started, please fill out the web-form below. Thank you.
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