Binary compensation plan pros and cons
Simple, easy to explain CONS: Lack of flexibility The Stairstep Breakaway Plan Initially, this multi level marketing compensation plan is similar to a unilevel, but once a distributor meets certain performance criteria, they can advance in rank and "break away" from his or her original sponsorship line. The original sponsor still receives a percentage override on the sales of the entire breakaway organization. Generally complicated and hard to explain, Generally requires high personal purchase volume requirement, tends to promote inventory loading a large investment in products.
This plan looks like a grid. Unlike a unilevel, each level in a matrix plan is limited to a certain width. For example, in a 3x5 matrix, each level can have only three downline members and limited to a depth of 5 levels. Unlike a uni-level plan, once your 1st level is full, each subsequent person goes to the next level until its full, and so on.
Common matrix configurations are 2x2, 4x7, and 3x8. In a binary plan, each downline member is placed into one of two legs. Each one of your downline members also places their recruits into two legs as well. What results is series of matrices. There is no depth limit on payment but there is usually a finite amount that can be paid out for each leg. When you have a prospective company in mind, you should write your plan for building your business.
Even before you have formally aligned with the company, this will help you to make your MLM business plan figured out early. Each plan has its own pros and cons. If you are a beginner, it is a good idea to study and understand each MLM compensation plan. It is also known as Forced Matrix Plan. This plan works with a compensation structure that contains certain width and depth.
The different feature of this plan is a limited width. Not like other compensation plans, this plan limits the number of distributors on your first level. One of the benefits of this MLM business plan is the ability to spillover. This is a unique characteristic that could motivate downlines to support their downline. The downlines could get benefit from the activity of their uplines. Besides Matrix plan, you can also find Binary Compensation Plan.
This is the simplest plan in MLM industry. Each member is limited to add more than 2 members at the primary level. It is like a 2 legged MLM matrix, but it has unlimited depth and typically pays from infinity. MLM Binary's often pay weekly, but it Japan it is common for them to play bi-monthly, monthly, or 4 times per month as well.
Old MLM binary compensation plans used to have a point cap on a weekly basis, which in turn limited the amount that could be earned from a single business center. As you earned points in these MLM binary compensation plans, you would need to balance your points on the left and right by way of steps.
You would also usually have a cap on the number of points you could earn on one side in a week. Any points you earned in excess of would flow up line. They would not be stored in any way. Every week was like starting over. These MLM binaries gave the whole MLM binary commission structure a bit of a bad name after an initial surge of popularity. First, they offered cycling which meant you could earn a whole cycle more than once a week. The next thing a lot of the newer MLM binaries did was eliminate the need to have 50 - 50 balance in your points to be paid.
This allowed for a distributor to have a stronger leg and not be penalized for it as much.