MLM Binary Compensation Plans: The Good, The Bad, And The Ugly

You have done your due diligence and are almost ready to take the plunge and start your own network marketing business. Then he heard the words “binary MLM” and while nodding as if he understood exactly what his potential sponsor was saying, what he really heard was “it’s the best” and “you can make a lot of money” and so on. some of the conversation was so garbled it could have been in Chinese.

You are not alone. MLM compensation plans are some of the hardest things on the planet to understand unless you have a math degree. But he doesn’t, he just wants to get on the ground floor of a successful MLM company.

MLM Binary Compensation Plan Explained

The word binary means two. So think in terms of two. When you sign up and start building your new business, your first goal will be to go out and find two people who also want to work to secure time and financial freedom.

You record them and place them in what is called your front line. Your personal line of sponsorship and, because we are working a binary mlm program, you and everyone else in the business can only have a maximum of two people on your front line. Two. Just two.

So now your business consists of you and two. Fred and Sally. And in an ideal world, both Fred and Sally would now sponsor two sponsor two sponsor two, etc., and they all get rich beyond their wildest dreams. But unfortunately, we live in the real world, and Fred and Sally are likely to do nothing at all. So you need to find a few more people, and since you’re only allowed to have a total of two people on your front link, you’ll need to place these new recruits UNDER Fred or Sally.

MLM Binary Spill

When he dropped his new recruits into the downlines of Fred and Mary, they received a spillover effect on the upline. In other words, he has helped them build a side of their business based on his efforts. And this is one of the great benefits of the MLM binary compensation plan: the idea that if you have an active upline, it could actually help you build half of your business.

The challenge is that you will still need to sponsor and recruit a good number of people and place them on the other side of your business to “balance” the two legs because most plans only pay a commission when product volumes balance. So while you may enjoy a massive spillover effect, you’ll only get paid when you add new people to your business as well.