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Understanding the Differences Between Binary and Matrix Compensation Plans

Direct sales business success mainly depends on their compensation plans. Two such popular compensation plans are binary and matrix compensation plan. Lets discuss the key differences between them. <br><br>For a matrix plan, they have fixed width and depth. If the distributor number exceed the width, they are placed as the downlines of their downlines. They have Matrix completion bonus; level/position bonuses; matching bonus; sponsor/direct referral bonus. <br><br>

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Understanding the Differences Between Binary and Matrix Compensation Plans

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  1. Exploring Binary And Matrix Compensation Plans: Key Differences Epixel MLM Software Epixel MLM Software www.epixelmlmsoftware.com www.epixelmlmsoftware.com

  2. INTRODUCTION • Network marketing, has evolved significantly by strengthening trust and satisfaction of customers within the business. • Trust and satisfaction play a crucial role in retaining distributors, as they value when their needs are fulfilled and their contributions recognized. • Leading network marketing companies have enhanced their success by introducing innovative and fair MLM compensation plans that reward distributors effectively. 2 2

  3. Network marketing companies worldwide have enhanced their operations through innovative and powerful compensation plans. • Among these, the binary and matrix MLM plans binary and matrix MLM plans have shown great effectiveness for both distributors and organizations. • 3 3

  4. STRUCTURE

  5. Matrix MLM Plan Matrix MLM Plan Binary MLM Plan Binary MLM Plan • Fixed width (2 legs) with unlimited or defined depth • Fixed width and fixed depth • Limited downlines • Only 2 frontlines (left leg and right leg) • Expands only up to the specified number of levels • Can extend to unlimited depth or as per company policy • Multiple legs based on matrix design • Two legs — left leg and right leg • New recruits placed in next available position within the matrix • Recruits placed in either weak or strong leg • In a 2x2 matrix, a distributor has 2 frontlines, and the next level continues up to 2 levels • Each distributor has 2 legs, and the network continues downward indefinitely • Suitable for balanced and limited team structures • Popular among major direct selling and MLM companies

  6. SPILLOVER PREFERENCES

  7. Matrix MLM Spillover Preferences Binary MLM Spillover Preferences • New distributors are placed in available positions across a fixed width and depth in a sequential order. • New distributors are placed strategically in either leg (left or right) to balance team structure and performance. • Distributors are placed from top to bottom levels and from left to right positions. • Spillovers are directed entirely to either the left or right leg based on the set preference. • Distributors are placed alternately under each frontline member for balanced growth. • Spillovers can be directed to the leg with weaker or stronger sales volume. • Some companies allow multiple business centers for a distributor, multiplying potential earnings based on performance. • Limited flexibility • Structured and evenly filled network with defined limits. • Dynamic, flexible structure enabling deeper team growth and better balance between legs.

  8. COMPENSATIONS

  9. Compensation Type Compensation Type Binary Plan Binary Plan Matrix Plan Matrix Plan • Earned when a distributor directly refers a new member to the network. Sponsor Bonus / Direct Referral Bonus • Earned when a distributor directly refers a new member to the network. • Commission awarded upon completing each level of the matrix structure. Level Completion Bonus — • A percentage of bonus calculated based on the sales volume of the weaker leg. Binary Bonus — Matrix Completion Bonus • Bonus received when a distributor successfully completes a full matrix cycle. —

  10. Compensation Type Binary Plan Matrix Plan • A share of the bonuses earned by downlines, rewarded to the uplines. • A share of the bonuses earned by downlines, rewarded to the uplines. Matching Bonus • Bonus earned for adding new members at specific levels within the matrix. Position / Level Bonus — • Reward given to distributors for maintaining balanced sales volumes between the left and right legs. • Distributors receive a fixed percentage return on their initial business investment. • Company-specific incentives designed to motivate and retain distributors. Pairing Bonus — • Distributors receive a fixed percentage return on their initial business investment. Return on Investment (ROI) • Company-specific incentives designed to motivate and retain distributors. Custom Bonus

  11. READ MORE: www.epixelmlmsoftware.com/blog/binary-vs- matrix-plan 11 11

  12. THANK YOU 12 12

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