How does Binary MLM Plan work ?
Binary Multilevel Marketing Compensation plan
Binary MLM is a unique business strategy used by a lot of Networking marketing companies. As the name suggests, Binary MLM is based around the number 2. The distributor plan in a binary MLM looks similar to a binary tree. A distributor would introduce 2 new members (Front line distributors). These 2 new distributors would then, hire 2 distributors each and so on.
A typical Binary MLM distributor plan looks something like this:
The distributor A for the MLM company using Binary plan would hire 2 distributors B and C who are his Front line Distributors. Now the distributors B and C, would then hire D, E, F and G who would be the down line distributors of A. This process would continue and the new distributors would join. Theoretically, it can go up to infinity as more and more distributors join. This is a 2-by-infinity matrix plan.
The two people they sponsor may not always end up on the same level. Someone above you may have had to place someone they have sponsored in that position, since their front two positions were filled or because they keep sponsoring others as they build their sales organization.
In a binary MLM plan, each distributor would have only 2 front line distributors. Suppose, A hires 3 distributors B, C and D. He makes B and C as his front line distributors. Now, D who is hired by A cannot be his front line distributor as the front two positions were filled. He can choose to place him below B or C. As a distributors keep hiring ( or sponsoring) new distributors, they may not end up in the same level ( as front line distributors). This is called Spillover
It might also happen that, both your sponsors might not end being your Front line distributors because some distributor above you may had to place the new distributor that hired in that position as he keep hiring new distributors to build the sales network.
Structure of Binary MLM
The binary tree consists of 2 sub-trees, one is referred to as Power-leg and while the second sub-tree is called the Profit-leg.
As the new distributors sign up, they will be automatically placed in the distributor’s power leg. The power leg structure will have automatic placement of new distributors. As the number of front line distributors is limited to 2, any new sponsors would be placed in the distributor’s down line power leg (Spillover).
Profit Leg does not support spillover. All the distributors in the profit leg are personally hired( or sponsored) by their immediate distributor As the new distributors sign up, they will be automatically placed in the distributor’s power leg.
I hope you find this basic tutorial on Binary Plan useful. In the next tutorial, we will be discussing about the compensation plan in Binary MLM. If you have any doubts, please leave a message or contact us.
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