In a binary compensation plan a distributor has two legs to place those who join the business. A binary plan requires you to balance (not necessarily equally) your two legs. For example; if you had twelve distributors in your downline you would place six in each leg. Some binary plans are not as evenly balanced requiring the sponsor to place four in one of the legs and eight in another, giving a one third to two thirds division.
The binary compensation plan is creating a buzz in the industry and at the same time some frustration for network marketers.
If a sponsor is able to bring in more than two new distributors,any recruits over and above the first two become spill over and will have to be placed under other distributors in the downline.
One thought comes to mind and that is… if a downline distributor is the recipient of spill over (recruit sponsored but not able to be placed in your width because the plan is only two legs and must be placed in your downline) and if this spill over recruit is not a business builder than what choices would they have?
One of the choices would be to let the new distributor remain as placed but the recipient distributor would have to build under that person in order to keep the legs balanced. This certainly would not be the best choice because it would force them to build that distributors business in order to receive a commission check. Why should anyone build another distributor a check when they do not take the initiative to build their own.
“Network marketing was all about personal production and building something that was really worth building. Leaders committed to long-term growth, developing useful skills and producing stable teams with depth that would pay them for years and years.” ~ Keith O’Brien
The second option would be to have that spill over removed from the downline and if not removed, perhaps resignation is in order and looking for a compensation plan that is more suitable to your network marketing efforts is in order.
As is the case in a binary compensation plan the commission check is based on the volume sold for the month, and the distributor is always paid on the weak leg, Even though you bring volume to both the weak and the strong leg.
As an example: if the strong leg had a thousand points of volume and the weak had nine hundred points of volume. The commission check is ten percent of the volume on the weak leg which is ninety dollars and you you will not be paid on the remaining one thousand points in the strong leg.
The nine hundred points in the pay leg is used to pay the commission and is reduced to zero for the next month and the strong leg is reduced, by the same amount, to one hundred points. The carry over to the next month is one hundred points on the strong leg. In the new month you have to build the volume on both legs again in order to qualify for a commission check. The commission rate is ten percent on the weak leg but you are building two legs so what is the real overall commission if you take both legs into consideration? Yes if you were paid on all your efforts your commission should be ten percent of your total volume (1900) which would be $190.00. Why put your efforts into a binary commission plan if you are not going to be paid on all of your volume brought to the company?
How about you?
It is always advised that you read your compensation plan and understand how hard you are going have to work and what you need to do to qualify for your commission check. If you miss out on even one qualification, you will not get paid. The proof is in the compensation plan.
Commit To Success Today
Dave and Darlene Mills
Leadership With A Vision
Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world. by Joel A. Barker