The Binary MLM compensation plan is a well-known network marketing plan. And, in general, the jury is evenly split on how the MLM binary plan is received. Some distributors are enthusiastic about the plan’s distinctive rules and techniques, while others may prefer more flexibility. In a binary scheme vs pyramid scheme comparison, a binary plan can have a legitimate product or service, while pyramid schemes rely solely on recruitment to generate income.

Still, along with the matrix plan and unilevel plan, it is one of the three basic compensation plans and has helped a lot of businesses succeed. Continue reading to learn more about the MLM binary plan and the benefits and drawbacks of implementing it in your business.

A MLM binary plan is relatively easy and convenient when compared to other MLM plans. A member’s front line is limited to two downlines in a binary MLM, but the depth is limitless. This implies that in order to start earning, each member just needs to recruit two “front line” representatives in a binary MLM. Spillover occurs when a member recruits more than two individuals. The spillover members are arranged in levels below the front-line members. A two-leg downline of two-by-two levels is developed as distributors are recruited and the binary MLM structure fills in. The amount of levels that can be included in a MLM binary plan is unlimited.

Binary MLM compensation plans are straightforward to understand, making it much easier to recruit new members to the network. Instead of a percentage of sales for multiple levels of representatives, they are compensated based on the sales volume generated in each of the legs. Only the “pay leg,” which is the lower-earning leg, is used to calculate MLM commissions in the MLM binary plan formula. The other leg which generates more income is called the “reference leg”.

Distributors of binary MLM networks have an incentive to build out both legs and operate as a team across the two legs to optimize income because income and commissions are based on the lower-earning leg in MLM binary plan. Members can get the most out of their whole downline when sales are more evenly distributed between the two legs. Sponsors would have no motivation to focus on the lower-earning leg if commissions were decided based on the higher-earning leg, causing sales and recruiting to stagnate eventually.

The binary MLM plan allows MLM companies to better monitor their growth while also estimating commissions and incentives more precisely. Typically, MLM businesses would set a commission cap for each level of distributor earnings in the pay leg by defining a set commission percentage.

Would you like to automate your MLM business by adopting a binary MLM plan? Go ahead with our Binary MLM software to automate the MLM binary plan.


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