Understanding Binary Compensation plan and its advantages and disadvantages

What is a binary plan in MLM? What is the binary MLM compensation plan?

There are numerous Multilevel or Network Marketing plans. Among all, there is a Binary plan. As the name implies, in this plan, each distributor can have only two frontline distributors. You will be able to sponsor two distributors but if the distributor above you i.e. in your upline has sponsored more than two, then they will be placed at levels below you i.e. in your downline. This is called Spill.

As each distributor can sponsor only two distributors, its structure has two legs. They are called “Right or left legs” and “Strong and Weak legs”. The Right leg or the Strong leg, is the leg in which you are joined and the spills of the distributors above you. Hence this leg will be longer and hence stronger. The Left leg or the weak leg is the leg where you start adding directs under you. This is the leg which you will build, hence it is called weak leg or the short leg as it does not spill of your upline.

Because of the spills, which will be considered under you, this plan is considered good. As you are being paid in addition from the spills of your upline placed in your strong leg.

Advantages of Binary Compensation Plan:

1. Additional earning from the spill of your up-line: In this plan, you can get to earn from the spill of your up-line, as they are adjusted in your Right leg. This is because of the binary plan principle of having only two frontline distributors.
2. Since your Right leg is built by the spills, you need to build only one leg, i.e. left leg.
3. But your income will almost be double than the number of directs you place under you.
4. This plan is of unlimited depth. While no plans pay up to unlimited depth, the binary plan has the potential.
5. This plan has the capacity to grow faster
6. Because of its simplicity in understanding the plan, it is favored by start-ups.

Disadvantages of Binary Compensation Plan:

1. The main disadvantage of a binary compensation plan is that you can be fortunate to earn from the spill only if your sponsor is strong. If he is not recruiting that many direct then you will not benefit. You will have to work harder to build your weak leg.
2. Some compensation plans have their terms and conditions like they will pay you only if there is a certain balance in both of your legs. For an e.g. 25% on the weak leg and 75% on the strong leg or 50% on both the legs. Hence it is of utmost importance to understand the plan properly.

Also, check out our Binary MLM Calculator

Types of Binary Plans

First is Simple Binary

It involves

Pair formation: This is the first step towards income calculation for the simple binary plan. While forming pair we have to consider the total left and right count available in the payout period.

Income Calculation

Capping: Pre-defined Amount by administrator

Payout Analysis: This is a report related to detailed information of incoming and out-going binary funds per payout.

Simulation: Pre-defined Amount by administrator

Other types are Hyper Binary, Australian Binary, Level Binary, and Daily Binary

Ventaforce from Sankalp considers all types of Binary plan as per your requirement and is totally customizable.

For more information on Binary Plan as well as other Plans, you can set up an appointment with our expert consultants not only for software consulting but as well as for knowledge on various types of compensation plans. You can also stay informed by subscribing to our blogs.