Network Marketing Compensation Plans Part 2: The Binary Plan
Posted on 22. Jan, 2010 by Ty Tribble in Monavie, Network Marketing - MLM, Network Marketing News, USANA
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Company examples: MonaVie, Agel, Usana, Vemma, Exfuse.
History and definitions: Binary plans are built with two legs or teams and your ability to balance those two teams in order to be paid all of your volume. Some of the first Binary plans were 50/50 balanced so that you would only get paid on your volume when it matched exactly in each leg. When it matched up, you got what is called a "cycle" or a small amount of money based on the volume accumulated and matched up in each team.
Later companies moved to a 1/3 - 2/3 cycling binary plan where you would be able to cycle even though your team was balanced 1/3 in one leg and 2/3 in the other leg.
The newer binary plans do not cycle, but pay 10% on the smaller of your two legs, many times leaving large amounts of volume unpaid in one of your legs.
Commentary: In a binary plan company that had over 40,000 distributors, I set a record with the fasting growing team, top recruiter and fastest to diamond in the company history. So I know how to build a Binary plan. The problem was not my income, the problem was the income of the several thousand people on my team. It was laughable.
The smoke and mirrors of a binary plan is that in some cases, you have people on your team. Sometimes hundreds of people, yet those people rarely equate to actual income. This provides a new person with a false sense of success. The newest person sees people coming into their team, but no financial gain from those people. Companies are able to create momentum as a result of distributors getting a false hope by seeing one team grow even though they aren't making any money.
Some companies also have high product purchase requirements (up to $250) that many times leads to bottles stacking up in the garage as they hope for the future.
The good thing about the binary is the ability to create momentum and excitement over a short period of time. The bad thing about the binary is the reality of so many people losing money each month with a false sense of success.
Binary plans are also very back end weighted. They pay a handful of people really well and leave the vast majority of the distributors starving.
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6 Responses to “Network Marketing Compensation Plans Part 2: The Binary Plan”
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James Humphrey
22. Jan, 2010
Great post Ty – I was looking for a good explanation to the Binary plan and came across your blog. Good stuff and glad I found it.
Thanks for sharing since you experienced it first hand.
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Andries Johannesen
23. Jan, 2010
Hi Guys
I love a lot of your stuff
it’s good to promote the industry
your blog on binaries is not really fair in my opinion. Sure Agel and Monavie are examples
of binary plans designed to pay a top few most of the money that’s not the fault of the binary system it’s their loops and hoops and their intention of the management
also yes I’ve worked binaries for 20 years love them never worked Usana but they are totally different to other binaries (Usana is an really old binary and has a very low max payout per income centre). Just like unilevels or breakaway plans the “devil is in the detail” we need to look at the whole plan. Binary plans generally do have real benefits and tend to create more team work having the opportunity to be paid in unlimited depth.
anyway keep up the good work i enjoy your blogs
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Jeremy Newman
23. Jan, 2010
Ty
I am a Monavie distributor and I feel you have hit the nail on the head. I have loved your blog for years and respect your perspective on the industry. I did notice that you have not reported on Bazi Xelr8 terminating all of their distributors. They are apparently going retail. You may want to look into it.
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Ty Tribble Reply:
January 25th, 2010 at 9:22 am
Here is the link to the Bazi article:
http://mlmblog.net/2010/01/xler8-bazi-terminates-all-network-marketing-distributors.html
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Tyler Ford
24. Jan, 2010
Binary comp plans are the way to go!
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Tamara Roe
27. Jan, 2010
Thank you for shedding light on a much needed topic….
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