Understanding the Binary Plan

Despite the fact that the Binary Plan is relatively new to the network marketing industry, it is proving to be very popular among network marketing companies and members within the industry. The binary compensation structure is a very simple design that offers a number of advantages over the Stair-Step Breakaway Plan, UniLevel Plan and Forced Matrix Plan. These advantages may make it more attractive to some network marketers. Probably the biggest adventage it has had over the other plans is that it has been consistently voted as the best compensation plan by the industry for the past 9 years. But you must remember it is one of the most popular compensation plans, so obviously it is going to get the most votes.

How Does the Binary Compensation Plan Work?

The Binary Plan, as the name suggests is based around the number 2, which represents the maximum number of frontline associates any one business centre can have. Any additional associates must then be placed under one of your existing frontline member’s, which helps you to build both your organisation and that of your growing downline. This creates a very supportive team environment where everyone in your team benefits. For new associates to the industry, this compensation plan is the easiest way to achieve success. This structure is designed so that associates must assist their new members to build their organisations in order to gain success for themselves. This team approach makes the Binary Plan very attractive as all associates within your organisation work towards achieving a common goal (mutual success).

The main earning objective of the binary compensation structure is to balance the leg volume (your left and right) flowing through either side of your business centre. Any additional volume is then carried over to the following commission period. This “carry over” feature has proven to be very popular for part-timers because you don’t lose any of the sales volume you have acquired. The goal is to balance the volume flowing through your left leg and the right leg of your organisation. This encourages associates to help their weaker downline members to build their organisation (promoting teamwork). This achieves better volume balance and a more consistent commission cheque. Another main advantage of the binary plan is that you have the control to choose where you place new associates within your downline structure, which can also help to keep your organisation balanced and profitable.

There are normally no depth restrictions to the binary compensation plan and each level of your organisation is paid out on a consistent percentage, making it easy to understand. One of the main distinctions of the Binary Plan is that it is volume driven opposed to level driven, which means you do not have to have a large organisation to be successful. This also means there is an incentive to help new associates in your organisation no matter how deep within the organisation they are.

In the fairness of good maths, because there are no depth restrictions to the binary compensation plan, each business centre has a limited earning potential which maxes out to ensure that both distributors and the company earn a profit.

If each centre has a limit to how much it can earn, how is it possible to earn millions of dollars through a network marketing business using the binary compensation structure?

For those serious network marketers, the profitable part of the Binary Plan is that, although each business centre can only earn so much (normally up to a few thousand dollars a week, which is still very nice), there is generally no limit to how many business centres you can own and operate.

Think of a business centre like a shop, if you currently own a shop that is doing really well, but no longer has the potential to grow, what do you do? Open a second shop in a different location. This now allows you to earn profits on both businesses. Well it is exactly the same with the Binary Plan. Once you have achieved a certain level with your network marketing business where your business centre has capped out or has limited potential to earn you more money, the company rewards you with a new business centre.

The company is happy because they have an experienced, successful distributor opening another business centre and the distributor is happy because now they have a higher earning potential. The more business centres you have, the greater the potential to earn more profits.

Binary Compensation Plan Helps Even The Average Network Marketer

Studies conducted into the network marketing industry have shown that the average network marketing distributor sponsors between 2-3 new distributors into their business. These findings suggested it would be too hard for the average distributor to be successful using the UniLevel and Stair-Step Break Away compensation plans, and unfortunately the industry started to develop a bad reputation.

After these studies started to appear in the 1980s, the binary plan was created to give everybody a fair chance of success. Because the binary plan only allows for the sponsoring of 2 frontline distributors, it meant that even your less than average network marketer still has the potential to achieve financial freedom using this compensation model. Additionally, the Binary Compensation Plan was developed to help new recruits build their downline with the support of upline distributors.

Since its introduction, the Binary Plan has helped many everyday people become successful international entrepreneurs. We do believe that the Binary Compensation Plan is one of the fairest plans avaliable, but it certaintly is not the most lucrative.

One of the advantages of this plan is that creates team environment, which helps builds the reputation of the industry. That is, individual success is only created from the success of your team. With the additional support for new starters and the potential for the average network marketers to achieve success we strongly support this model. But we also encourage you to have a look at some of the other plans below and really find the right compensation plan for you.

Learn how to understand compensation plans

Learn why the Binary Plan is the Best Compensation Plan