Understanding the MLM Binary Plan

While there are hundreds of marketing plans that are difficult to understand, one strategy which is the easiest to explain and comprehend, too is the MLM Binary Plan.



So, what is a binary plan?

It is a network marketing compensation strategy in which distributors are placed in a tree structure in the organization. In other words, this strategy is built on the matrix of two. Only two people can be placed on the first level. All other goes beneath at the subsequent levels.

While it is quite new in the multilevel marketing industry, network marketing companies began using the binary compensation plan between late 80s and early 90s.

The Structure of the Plan

Since the plan is based on number 2, the name binary. Every distributor is allowed to place only two distributors on the first level, which are called business centers. The structure can be extended limitlessly. However, because of its limited width, it is sometimes referred to as a '2 x infinity' matrix plan. With this, it becomes pretty clear a binary compensation strategy has only two legs - the left and the right. Each of the legs can grow both on the inside and the outside, and hence referred to as the inside leg (profit/income leg) and the outside leg (also known as the power leg).

The outside leg benefits from the automatic placement of new distributors from your recruiting efforts as well as from the recruiting efforts of your upline. Marketers refer to this as spillover. Since the binary plan can accommodate only two members on the frontline, signing up of any new members will 'spillover' to available empty spaces in the outside leg’s downline.

On the other hand, the inside leg is filled only by the distributors sponsored personally. In other words, there can be no spillover into the inside leg. This is an important factor to consider when it comes to building a network marketing organization using binary strategy to pay commissions.

Advantages of Binary Plan

  1. Simple to understand

There are four types of networking marketing compensation plans including the unilevel plan, the breakaway plan, the forced matrix plan and the binary plan. Out of all these, the binary is probably the simplest to understand and execute. In addition, this is also easier to explain to the prospects.

  1. Spillover

Spillover is perhaps the most obvious of all the advantages of the plan. A majority of the distributors use spillover to lure their prospects to signing up with them. Common bait they put front is, “All you need to do is to sign up and your business will build automatically".

If you’re lucky enough to be placed on a successful and proactive upline's outside leg, your job is half-done. This is because you will focus entirely on building your profit/inside leg.

  1. Indefinite Depth

As discussed above, the binary plan places no constraints on how profound you can build you tree. It ignores levels simply. Hence, by balancing your two legs evenly, it is easier to build deep and earn a lot of money.

  1. Volume driven

While the width of the binary tree has limits, it does not matter at all how many distributors you have in your downline. This means that organizational size doesn't really count. One can add distributors who can produce big volumes and make big money.

  1. Fosters Team work

The inherent need to balance the business volume of the two legs encourages distributors towards helping their sub-distributors in the weaker leg for achieving enhanced business volume balance.

Wrapping up

To sum up, it can be said that the MLM binary plan is much simpler to understand and comprehend than other strategies. However, it still demands due diligence on your part.

Simply by understanding the rules, you can make big money with this plan. To achieve this, the key is to determine where to place your new distributors for the utmost pay-out. Just by placing one person on the wrong leg can make huge differences in the commissions earned. Hence, think smart and act accordingly.

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