MLM Binary Plan Formula

Posted by Nadcab MLM Software on January 20th, 2020

Binary plans are network marketing reward plans where new distributors are placed in a binary (two-legged) tree structure or organization's left and right subtrees.

This plan is quite new in the network marketing industry. Network marketing companies began using binary compensation schemes in the late '80s and early '90s.

The structure of a plan

The plan is based on the number 2, so it's a named binary. Each distributor is only allowed two distributors at the first level, called the Business Center. There is no limit to how deep a distributor can build.

Due to this limited width, the plan is sometimes mistakenly referred to as a '2 x infinity' matrix plan. But binary plans are not matrix plans.

It becomes clear that in the binary compensation plan there are only two legs on the left and the right. Both legs grow inside and outside, they are called inner and outer legs.

External legs, also known as power legs, benefit from automatic placement through recruitment efforts in the upline, as well as efforts to recruit new employees. This is called spillover.

The width of the organization is limited to two members at the forefront, so new members who join will 'spill rubber' into the empty space available on the power leg on the downline.

On the other hand, internal legs, also known as profit/income legs, only populate privately sponsored distributors. In other words, there can be no spill in the profit leg. If your company uses a binary plan to pay fees, you should keep this in mind when building your network marketing organization.