Binary MLM pay plans are complicated subjects for most to understand. New marketers and even some experienced marketers have trouble understanding and explaining them. Binary plans may be simpler than some plans but it is still challenging.
It has become increasingly clear to me that a compensation plan needs to be subject to the same evaluation process that any MLM opportunity, its’ leadership, products, and marketing system go through before you make a decision about joining one.
You’ve decided to invest yourself, your time, energy, dreams, and capital into building a business. If people understand the dynamics of the pay plan first, they will be better able to choose the right opportunity to invest their lives in.
Pay Plans though important are only one part of any MLM opportunity. It is your duty to look at the whole package, including but not limited to: Pay Plan, Product, Automated Tools, Market Size, Leadership, Start-Up Costs, Mentorship, and your personal level of preparation.
You owe it to yourself to seek out third party information, facts, and resources that deal with exactly what it is going to take to be successful in this industry first, before you make a decision about any company or MLM as a business opportunity.
With that being said, let’s now look deeper at Binary MLM Compensation Plans.
Is the Binary Plan Proven and Reliable?
Binary MLM pay plans have been around the last couple of decades. They have undergone improvement and revision during this time to improve payout plans for distributors as well as protect the companies from over paying distributors and thereby cutting short company lifespan.
Binary pay plans may be relatively new to the network marketing industry as a whole, but it clearly hasn’t hurt their popularity any. They are popular among MLM companies and with established members of the industry.
There are a number of advantages that make binary’s attractive to all network marketers. This includes those new to the industry, part timers, experienced full timers, and heavy hitting big guns as well. Many consider Binary’s to be the most exciting of the pay plans due to the lucrative payouts they can provide.
Is the Binary Plan a Pyramid Scheme?
Pyramids are illegal enterprises. A Binary Plan may look like a pyramid when they are filled up, but that certainly doesn’t make them a pyramid scheme.
You see, the Binary MLM pay plan is not set up to be a recruiting game where people are only joining the Binary for the opportunity to make a lucrative payout for signing people up. The people joining a Binary MLM pay plan must be joining to market a legitimate product or service.
An easy way to spot a pyramid scheme is there is no legitimate product or service for sale. Also there is no payout unless you successfully recruit a specific number of people into the pyramid. You’re paid on signing people up and generally there is no selling or marketing of products or services to receive payment.
Advantages of Binary MLM Compensation Plans:
• Huge potential payouts make Binary Plans very exiting.
• Most Binaries pay weekly or bi-weekly, whereas most other MLM compensation plans pay commissions monthly. This helps new recruits get into proffit fast giving distributors immediate rewards for efforts expended.
• Binary downlines pay to infinity. This means that you will benefit from a strong producer, even if they are 12 levels deep in your organization.
• Binary Plans offer the greatest potential generational earnings depth of any of the four basic compensation plans in network marketing.
• Binary plans are great for fostering teamwork in an organization. It is beneficial for your upline to assist your success, their success benefits you, and your downlines success benefits everyone. This tends to build team unity and cooperative energy.
• You really only need to concentrate on building one leg of your business- your “Money Leg”. The other leg of your business or “Power Leg” is usually being built by those in your organization that are above you, and more experienced than you.
• Your power leg will usually grow faster than you can possibly keep up with. With a binary compensation plan, your up-line will place their new members under you into what’s called 5g plan your powerleg. This is referred to as spillover.
• Binary Plans are much easier to understand and maintain qualifications for than other plans created before its’ creation.
• Binary plans do an excellent job compensating mid-range commision earners. It does not do as well on low end commisions or very high end commissions.
• Binary MLM Compesation Plans help the average and even less than average marketer to be able to achieve success, and realize the potential for financial freedom.
Binary Plan Disadvantages:
• Binary pay plans often require more work on your part. This doesn’t mean they are any less lucrative for those who work them correctly.
• This type of MLM plan is a balancing act. Most companies that use binary pay plans pay only on the weaker leg (money leg) in your downline and the matching volume from your power leg. Large sales volume may be flowing through your power leg but you only get paid on the balanced amount flowing through your money leg. You get paid on the matching volume; this can cause a lot of money to be left on the table.
• Pitfalls of Placement: You will need to understand how many people you must personally add to your legs for extra bonuses, and understand the importance of placement within these legs to eliminate mistakes that could cost you money.
• Binaries have upper limit payout caps. Most Binaries have a maximum upper limit on earnings called a payout cap (more about this later). Each business center has a limited earning potential which maxes out to ensure that both distributors and the company earn a profit. Some distributors don’t realize this. Sometimes Binaries may be combined with other commission payment types, earning bonuses, and multiple business center options to mitigate the capped earnings problem.
What do you need to know to make them work?
Binary MLM Compensation plans are built upon the simple principle of 2. You have 2 groups of distributors called “legs”. As you enroll new distributors into your business you place these new enrollee’s into either your left leg or your right leg (power leg or money leg). The length of each leg is usually unlimited as payout depth for these legs is theoretically to infinity.
The Power Leg: The legs in your business are given names, and each play in important yet differing role in your business organization. One of your legs is your power leg where your sponsor added you to the plan. It is also where your upline will continue to add people below you throughout the life of your business. This “Power Leg” grows fastest, usually faster than most distributors can keep up with.
The Money Leg: Your “Money leg” is the leg you are 100% responsible for building and maintaining. It essentially dictates what you are eligible to be paid for. With most plans you get a bonus for adding a balanced group of people (6-12-24-50 etc.) to your sales organization. Your upline helps you build one outside leg, but it is filling in the inside area and adding to your outside leg where the cash is made.
That’s why this other leg in your organization is referred to as your “Money Leg”. It’s the leg of your business where you will add new people and start making money.