Binary Compensation Plan

Is Your Downline Up For Sale on the Internet?

by Wayne Wu on June 22, 2010

in MLM Business Models & Legal

A while ago, I received an email from my mentor. He was telling a story about how one day, he found an entire downline genealogy of an existing MLM company for sale on the internet.

He knew the owners of the company, so he called them up and said “Hey! What’s going on? My gosh, your company is doing good, isn’t it?”

“Yeah. Company is doing great. But we couldn’t afford to buy the software, so we leased it. And part of the lease deal is, the software company owns the database.”

The software company decided it needed more money, so it sold the entire database to 10 third party MLM lead companies for $10,000 each, pocketing a nice $100,000 off the backs of the hard work of the distributors.

Can you imagine that? [click to continue…]

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Binary Compensation Plans and Their Complex Balancing Acts

by Wayne Wu on December 16, 2009

in MLM Compensation Plans

The Binary Compensation PlanA binary compensation plan, as its name suggests is based on the number 2. A distributor in a company that operates a binary compensation plan can only build a downline consisting of two legs. A left leg and a right leg.

That’s correct, a binary compensation plan only allows you to have a maximum of two frontline distributors. Any more that you personally sponsor would have to placed underneath one of your two personally sponsored frontline distributors. This is another case of spillover.

The width restriction, however, is not as bad as it sounds as the average network marketer will only sponsor between 2 to 3 people in their entire career. The only way to build a binary is to go deep. Depth cultivates leadership and a team spirit. [click to continue…]

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