Binary MLM Compensation Plans - 5 Issues You Need To Understand

Binary MLM plans are undoubtedly popular now, so here are a few thoughts from my own experience.

First, for the newbies, binary MLM pay plans have one defining characteristic: you have only two "legs" in your organization... a left leg and a right leg. Everyone you ever partner with will be placed in a direct line, one under the other, down one of those two sides.

Here are 5 facts you should grasp if you're considering joining a binary MLM compensation plan:

1. Use fear of loss to drive recruiting.

In a binary, each person who joins is placed under the person who joined before them (in that leg.)

Not only does this provide "overflow" to your downline, which encourages partnership and retention, but the astute MLM sponsor can use this to motivate recruiting.

"I have 5 people's paperwork right here on my desk. If you join right now, I'll enroll all 5 of these below you. If not, that's cool... I'll just place you under them when you are ready to join."

There are "powerline" systems that automate this. It's amazing stuff.

2. Position is significant.

Negotiate your position with your upline carefully.

Some positions get more overflow than others. Your sponsor is going to want to place you where it benefits them the most, but be careful. If your sponsor places you at the top of their inside leg, you won't get any overflow unless they continue to sponsor.

On the flip side, insisting to be placed to maximize overflow will help you... but it may not help your sponsor as much. So, they may be less willing to devote time and effort to helping you to maximize your business.

There is no clear best solution, which is why my advice is just to tread carefully. Don't just join without reasoning it through and discussing it with your upline.

3. TNSTAAFL.

Readers of Douglas Adams' "Hitchhiker's Guide to the Universe" know all too well... There's No Such Thing As A Free Lunch.

Even with the prime position and a complete company worth of overflow, a binary MLM still won't compensate you a penny unless you recruit yourself. Overflow has to be balanced with volume you bring to the table for it to be worth anything. So, don't join a binary thinking that you're going to get something for gratis.

Also, when sponsoring someone it's cool to reveal them about the overflow they may receive, but make sure they appreciate TNSTAAFL. It won't eliminate the sale... if anything, it'll sell them on you as a leader even more. And if you do lose them, you didn't want 'em anyway.

4. Teach your downline to sponsor outside then inside.

The first person you enroll into a binary should go on the same side, either left or right, that your sponsor placed you on. This is called your "outside" leg.

The second person you sponsor should go "inside," on the other leg.

The order is essential... a lot of people join an MLM sponsor 1 person and resign. If that 1 person was placed outside, they will get overflow from their upline. If not, they will be working their business alone forever.

To defend against that, you should always teach "outside, inside."

5. The best binaries are hybrids.

Straight binary MLMs are no longer state-of-the-art. In fact, there were a lot of problems with them.

But, when "merged" with a unilevel, coded bonus, or other commission structure, those problems can be easily resolved. These hybrid plans-particularly the binary/unilevel-have proven to be very stable and fair to distributors.

They are the BMW of modern MLM pay plans.

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