Binary Plan

In a binary MLM plan, each member is allowed to have only two direct downlines in their placement tree, known as the left leg and the right leg. As the MLM business grows, new members are placed in the next available spot on either the left or right leg, forming a binary tree structure.

Each member earns commission based on the sales volume generated by their downline members. The sales volume is calculated by adding up the sales made by each member in the downline on both the left and right leg.

The binary plan also has a concept of a balanced leg, which means that a member must have equal or almost equal sales volume on both the left and right legs to qualify for commissions. This encourages members to build both legs equally, resulting in a balanced growth of the MLM business.

The commission payout in a binary plan is usually based on a percentage of the sales volume generated by the weaker leg. For example, if a member’s left leg generates $10,000 in sales volume, but the right leg generates only $5,000, then the commission payout would be based on the sales volume of the right leg, which is the weaker leg. The commission percentage may vary (from 8% to 25%) depending on the MLM company and the compensation plan.

What is Spillover?

In a spillover binary plan, when a member sponsors more than two members, the extra members are placed under the front-line members of their downline, creating what is called a “spillover.” This spillover can benefit the downline members because they are receiving new members from their upline, which can help them build their binary tree faster.

For example, let’s say that you are a member of a binary plan, and you have two front-line members, John and Jane. John has sponsored two members under him, but Jane has not sponsored anyone yet. If you sponsor a third member, you will probably want to place this member under Jane (because of the balance leg concept), creating a spillover. This means that Jane now has one member under her, even though she did not personally sponsor anyone.

Spillovers can be beneficial for members because they can help them build their binary tree faster, but they can also be unpredictable because members have no control over where their spillover goes. Additionally, members can become reliant on spillovers rather than actively working to sponsor new members themselves.

One of the main drawbacks of the MLM binary plan is that it can be challenging to balance the two legs. If one leg grows much faster than the other, the distributor may experience a slowdown in commissions as they are paid based on the weaker leg. This can create pressure to focus on recruiting and building the weaker leg, which can distract from other aspects of the business, such as product sales and customer satisfaction.

Binary plan is a popular MLM compensation plan because it encourages teamwork and balanced growth, which can lead to long-term success for the MLM business and its members.