- What is a Binary MLM Plan
- How Does Binary MLM Plan Work
- Binary Commisiion
- join Commission
- Referral Commission
- Pair Commission
- Custom Bonus
- Royality Bonus
- Binary capping
- Advantage of binary mlm plan
What is a Binary MLM Plan?
A Binary MLM Plan formed a Two Legged (Left leg, Right Leg) structure in Multi-Level Marketing where each new distributor or member is placed on either left or right leg or subtree .One subtree is known as a Power Leg while the second subtree is a weak leg.
This process continues to unlimited levels or depths. Also, the plan is easy to understand and that helps distributors or member encourages or attract more people to join the network. Thus the recruitment or sales increase which also improves growth and business opportunities.
How Does Binary MLM Plan Work?
The new members sponsored by distributors are added either on the left leg or right leg. Upon adding two new members on either side of the subtree, a binary tree gets formed.All the new members referred after forming a binary tree gets spilled to the downlines.
Note: Distributors become a part of the binary plan by purchasing an enrollment package. The enrollment package here means either a service or a list of products. The distributor buys the package and becomes a part of the binary MLM company .
Lets See Different Scenarios Of Forming A Binary MLM Structure
Before looking into the structure, try to understand the difference between a Sponsor and the Parent of a downline.
Sponsor: The sponsor is the person who introduced the new member to the binary network.
Parent: The distributor, who is the direct upline of the new member introduced to the binary network.
Structure 1:-The Sponsor & the Parent of downlines are the same :
If a distributor X sponsors A and If A sponsors a new member B to the left position of A in the binary network, then B is the direct downline of A. If again A referred a new member C, then it is added to the right position of A since it was the vacant position.
Now B, C are the direct downlines of A and the binary of A is formed to get the binary commission. A is the sponsor as well as the parent of B, C.
Structure 2: The Sponsor and the Parent of the downline are different.
Here distributer X sponsors A and Y, where Y is placed under the right position of A and now A sponsors new member B, where B is placed under the left position of A .However, B wasn’t added on the direct right leg because it was already acquired by distributor Y sponsored by X .since there is no vacant position at the left leg of A.
Here the parent of Y is A and the sponsor of Y is X.
here the sponsor and the parent are different for the downline Y. The binary of A is formed from its own effort and the upline’s (X) effort by spilling over the member Y.
Structure 3:
Spillover without completely forming the binary .
Here distributer X sponsors two new members A and B, where A is placed under the left leg of X And B is placed under the right leg of X and binary of X is formed . Now distributer A sponsors new member C to the right leg as the left leg of A is filled by the new member Y, who is sponsored again by X. X also sponsors Z and places to the right of B. Here Y, Z is spillover and placed under the downlines of X i.e A and B . Y is placed under the left downline of X i.e A and Z is placed under the right downline of X i.e B
When you look into the picture, it is understood that the two spillovers occurred on two sides of X without completely forming the binary on either side.
Structure 4 :Sponsoring only to the left leg of the binary structure .
Here distributer A sponsors two new members B and C.
B is placed under the direct left leg position of A, and C is placed to the direct left leg position of B. here the sponsor of c is distributer A and the parent of C is distributer B. here C is the spillover which is placed to the extreme left.
Structure 4 : Normal spillover in binary structure
When the direct left and the right legs get complete and, the next new member sponsored will be placed under the next level as spillover.This is called normal spillover.
When the distributor X sponsors new members A and B, the binary structure of X is completed, and if X again sponsors the new members Y and Z, they will be placed under the next level as normal spillovers.in this structure Y, Z both members placed under the next level as normal spillovers.
Binary Commissions
Join Commissions :
MLM companies create join commission to encourage thair mlm members and attract more new membrs to join binary network. this commission amount credit in user’s account at the time of joining the network .
Direct Referral Commission:
The referral commission is also referred as sponsor commission / leader bonus or the introducer bonus is the benefit gotten by a user for introducing new members to the downline network. The commission is calculated based on the percentage or fixed of the amount the company has already predefined. The commissioned amount is automatically credited to the user’s account.
Pair Commission :
Pair commossion or binary commission. the ditributer or user sponsors new member to balances both legs with active members. when the user balancec both legs with active leg, user will be able to achive pair commission.the commission is calculated based on percentage tha amountthe company has already defined.
Custom Bonus :
Companies create their own custom bonus to motivate their distributors and attract more distributors to join their binary network. this bonus amount is automatically credited to the distributer’s account based on thair referrals wich is defined by company.
Royality Bonus :
In the royality bonus, when a certain set target is achieved by distributers , then all the eligible members receive certain percentage of amount as bonus as per the company’s rule.
Binary Capping
Binary Capping based on commission :
Binary Capping value is set by the administrator to maintain financial stability of company. The turnover of the company may affect if the commission payout goes out of control. Binary Capping will depend upon Commission.
Binary capping value is set based on the total commission of binary plan received by the distributer.
Suppose distributor A get the commmission $5000, and admin may set the binary capping value to $1000 there distributer can not receive commission more than $1000 as commission . admin can
be set capping value daily , weekly or monthly.
Advantage Of Binary MLM Plan
1. Unlimited depth: Binary plan allows thair distributors or users to add members to unlimited levels or depth and earn a high income.
2. You Profit From the success of your up-line : Its true, your up-line or (the person that sponsor you into the business) will actually benefit from your success, since the binary system makes your up-line place new members under you. This is called the spillover, and can truly change the amount of residual income you get, regardless of your level of success, or how you mentor other people in your MLM organization.
3. It offers a “Two to Infinity” Payout : Because this system offers ulimate opportunity your MLM business organization to grow two fold, it swill offer what is referred to as the “two to infinity” payout. So, regardless of whether how deep you install new members into your down-line, it’s most likely that you’ll make the same amount of commissions, from other people’s sales and referrals. The binary plan is often viewed to offer the best benefit of all, as compared to other comp schemes.
4. Binary plan works best in fostering teamwork : the fact has been tested by the veteran MLM distributors, the binary plan is often viewed as a structure that best promotes teamwork, both for the up-line and down-line.
4. You dictate how many down-lines are placed on each of the two legs : Depending on how your MLM Company interprets the binary compensation system, with this model it’s most likely that you can actually dictate how many members will be placed in each of the two legs. Here’s an example: If an MLM program states that you need to sponsor one member into your left leg, and one member in the right leg, to allow you to qualify for commission. So your mission would be to sponsor two members, one in your original leg and the other in the new leg. In the end, you will be paid royalty or group commissions based on “groups” of members.
