MLM Binary

What is an MLM Binary Compensation Plan?

You have checked everything out and you think you’re almost ready to start your MLM or Network Marketing business. But when your sponsor was talking about compensation the phrase “MLM binary” came up and although you tried to look intellectual you really had no idea what they were talking about. Relax… You are not the only one… Multi-level marketing compensation plans look as if they were written by mathematics PhD’s and seem to be exceptionally complex. On the surface they may look difficult, but if you sit down with someone who understands them they’re easy to work out, and soon you will understand it inside and out. One key piece of advice however… many of the top earners in each company have never learned how their company’s compensation plan works… They dont get caught up in the details… they see that its working for others and have an attitude of “It is what it is”… This mindset allows them to focus on the real important aspects of growing their business.

Here’s what a Binary Plan is

As you probably already know, binary means 2. In a Binary you have a Left Team and a Right Team. One of the first things that you’re going to have to do when you begin building your new business is to find and enroll 2 new people who have dreams and goals and, like you, would enjoy the financial independence that can be obtained through MLM or Network Marketing.

When they enroll they will be placed in your business on what is called your front line… Because you are working within an MLM binary compensation plan, you and everyone else in the company are only permitted to have a maximum of two people on your front line. Two and ONLY two… One in your Left Team and the other in your Right Team… This is assuming that they are from different spheres of influence and you have yet to receive any spillover (more on that later). Since your Teams essentially compete with each other you wouldnt want relatives in opposite teams… The same could be said for coworkers, or close friends who hang around the same people… We want to foster teamwork within each team which is one of the advantages a binary plan has over old school uni-level plans.

So now there’s 3 people on your team… you and 2 others. Let’s call them Mary and John. In the perfect world within a binary system, Mary and John would go out and sponsor 2 people each, and so on and so on, and in theory everybody would make lots of money and lives happily ever after. Unfortunately, this doesnt always work that way and some recruits won’t do what they say they are going to do. I wouldn’t spend much energy trying to figure out why people quit or never get started… The best thing you can do is focus on learning and improving your skills then teach others what you’ve learned… For now get your new recruits plugged into the proper mentors within your company and the industry as quickly as possible and lead your team by setting a strong example and actively working the business.

If you want to build your business quickly you will want to sponsor more than two people. These new recruits must be placed underneath Mary or John. It’s your choice but in this example we recruit and place Bill under Mary. This creates spillover.

What’s Binary Spillover?

Bill went into the Mary’s downline and that’s simply what binary spillover means. You have helped to build Mary’s business by placing Bill on her team. This is one of the huge advantages of the MLM binary plan and if you have got an active up line, this should be happening all the time and may help you to build your business. Your company will still distinguish that you are Bill’s sponsor and you will still earn credit for the sales and purchases that are made but Mary will get credit for Bill’s volume as well. Companies will reward the sponsor through additional compensation and rank advancements so you never want to give away the sponsorship unless there are circumstances that would make it beneficial to do so.

What is Balanced Volume?

Every company is different so I will give a generic example here: The challenge now becomes a balancing act. Binary MLMs  will typically pay a commission on the balanced volume… Lets say they pay 5% on each Team… Your Left Team has grown to $10,000 in sales while your Right Team has only grown to $5,000 in sales. Your smaller volume leg is commonly referred to as your PAY LEG because you will be paid $250 (5% of $5,000) on your Right Team and an equal amount on your Left Team. The remaining $5,000 in volume on your Left Team will usually roll over to the following month.

In order to maximize your compensation plan there is a placement strategy. You would most likely want to place any new recruits in the Team with the least amount of monthly sales. There are exceptions to this as some companies place an emphasis on how much of your sales volume is spillover. But that is an advanced topic for another post.

It’s not a question of whether MLM binary is the right choice for you but rather the big issue is how can you market your business effectively? You’ve got to have a plan in place to promote your opportunity and your products. One key question is should you use an online lead generation system and learn attraction marketing in order to build your business faster and become more profitable? What’s your advertising budget? Have you thought about leadership, because your downline Success Team will look to you as a leader and coach to help them achieve success in their own businesses?

These questions are vital and must be addressed, because really it isn’t the compensation plan that’s so crucial it is how you approach your business. You should know what you are going to do to build your business before starting.

If you are new to MLM Binary Compensation Plans or Network marketing in general and are looking for ways to expose your business to the right kind of people I would highly recommend that you consider learning attraction marketing.

Learn Attraction Marketing

About The Author

Jeff Atkins is a TOP 1% Network Marketing Professional who helps struggling networkers create time and financial freedom to live a happier, more fulfilling life by teaching the fundamentals as well as how to create online systems that generate an endless supply of qualified prospects eager to follow them in their MLM.

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