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Binary MLM plan is the most common and popular compensation plan in direct sales business. In a binary plan, there is left and right legs. That is also called as weaker leg and pay leg. Most network marketing companies with binary MLM plan run on weekly commission cycles making it favorable for the distributors to earn for their efforts sooner.
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Understanding the Binary Plan for MLM Business Success Epixel MLM Software www.epixelmlmsoftware.com
Introduction ▪ ▪ ▪ SAMPLE FOOTER TEXT 2
What is a Binary MLM Plan? A binary compensation plan operates with two legs—left and right—ensuring a structured and balanced sales flow, where commissions and bonuses are distributed based on a well-aligned genealogy. ▪ Each distributor can directly recruit only two members, and any additional recruits become spillovers placed under the existing legs, helping strengthen team growth. ▪ This placement pattern continues down the direct selling organization, extending to unlimited depth or up to the limit set by the company. ▪ SAMPLE FOOTER TEXT 3
How does Binary MLM Plan work? The binary plan’s structure makes recruitment easier, as distributors earn based on the sales volume generated in either their left or right leg according to the company’s rules. ▪ Commissions are determined by the weaker leg’s sales volume, unlike other plans that calculate payouts across multiple levels of distributors. ▪ The weaker leg, known as the pay leg triggers commission payouts, after which the corresponding sales volume is deducted from both the pay leg and the stronger “reference leg.” ▪
Advantages of Binary MLM Plan ❑ Weaker-leg–based commissions motivate distributors to strengthen that side, boosting overall productivity. ❑ The plan’s simplicity makes it easy to understand, helping distributors onboard and train new members quickly. ❑ Weekly commission cycles allow distributors to receive earnings faster. ❑ Strategic placement of spillovers helps distributors optimize their structure and increase their benefits. ❑ Spillovers reward both the sponsor and their upline, making it an attractive feature of the binary compensation model.
Disadvantages of Binary MLM Plan ❑ Some companies use a flush-out rule, removing excess volume from the stronger leg instead of rolling it over to the next cycle. ❑ Certain direct sales organizations disable spillover preferences, placing spillovers automatically without distributor control. ❑ Weaker-leg–based commissions can become a drawback if that leg stays inactive, reducing the value of efforts made in the stronger leg.
Tips to reduce commission overpayment ❑ Provide bonuses based on weaker-leg volume in set cycles rather than paying a percentage on all weaker-leg sales. ❑ Apply flush-out limits to remove excess strong-leg volume after it reaches a defined threshold. ❑ Discontinue payouts to inactive distributors for downline or past sales after a designated period. ❑ Review commission totals each cycle and adjust the binary compensation structure as needed.
The role of Binary MLM software Binary MLM software streamlines every part of business management, from onboarding distributors to addressing precise and timely commission payouts. As data became central to business operations, safeguarding that information also became a top priority for direct selling companies. Handling large volumes of customer data securely is now essential, and advanced MLM software effectively supports this need.
READ MORE: www.epixelmlmsoftware.com/blog/binary-mlm- plan-most-suited-for-business
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