Important Concepts of a Binary Compensation Plan in Multilevel Marketing

One of the advantages of binary programs is that they allow re-revenues in their own downline, ie a distributor with several Business Centers under 001, in addition to these, create other Business Centers at the end of their line (Downlines). In the Binary Plans no commissions are obtained for the Sales Volume in the different levels as in the case of the Unilevel Plans, but for the balanced Sales Volume of the different Business Centers, in addition there is no depth limit to earn those revenues . So it is logical to allow Distributors to create different positions of Business Centers with the aim of increasing the possibilities of developing sales and increase revenues, and should allow to locate these Business Centers in positions that allow balance the volume in the 2 Legs Of each of the Business Centers. Creating these new Re-Revenues usually requires that the maximum commissions have been reached in the Business Centers already established, the MLM Company determines in this way that the Distributor is ready to increase its sales volume, but for this it is Necessary to allow you to create other strategically positioned Business Centers. To activate these new Business Centers, the Distributor must comply with some requirements, usually an increase in Personal Sales Volume (PVS).

Another of the most publicized “benefits” of a Binary Compensation Plan is the claim that it can pay in “infinite depth.” In fact we must consider the following; Let’s say you have a Branch (leg) that extends 1,000 levels deep (which is possible considering that one person could create many Business Centers). Let’s say someone on the thousandth level places a $ 100 order to the company. It is clear that these $ 100 will count on the Sales Volume for that Leg. But, is not it also true, that those $ 100 will count for the Sales Volume of someone who is positioned in the second level of your leg? In fact, is there not a potential of a thousand positions that are also entitled to a portion of the commission in that order ?. In fact, it is very unlikely that all 1,000 positions will be eligible for this commission. Many may not qualify to receive the commission. So we will assume that only 200 will qualify to get a share of the commission on those $ 100, plus we will assume that the commission percentage is 50%, or $ 50. Even if these fifty dollars are divided equally between the 200 positions It will never be like this, as we’ll see soon), you’re going to earn about 25 cents on the sale of $ 100.00 to someone in the thousandth position of your leg.