Among the various types of marketing plans, one of the most popular today is the binary MLM plan. But what makes it so attractive to entrepreneurs in the MLM industry, and how can you create a reliable binary structure? Let's break it down step by step.

What is binary marketing

The binary plan is a type of compensation (marketing) plan in MLM business characterized by its two-branch structure - left and right. Distributors in the company have only two partners in their first line, and all other participants they recruit are placed in the next available spot under the existing partners in the structure. This principle is known as the "spillover system." As a result, a "binary tree" is formed, where one branch is strong - the Power Leg, and the other is weaker - the Profit Leg.

Commissions in binary marketing typically average 5-10% of the turnover of the weaker leg, which is why it is called the Profit Leg. Additionally, MLM companies often set the sales distribution ratio between the weak and strong legs at 40% to 60%, with more lenient companies allowing a 30% to 70% ratio. If distributors do not achieve the required sales ratio, they lose commissions from the turnover of their entire structure, which motivates them to develop both legs.

The pure binary MLM plan often includes four main types of rewards:

  1. Referral bonuses - Rewards for recruiting new distributors into the company. These are usually paid as a percentage of the first purchase or starter package of the recruited participants.

  2. Sales volume commissions - calculated based on the sales volume of the less productive leg.

  3. Cycle completion bonuses - paid when a specified turnover level is achieved by all participants in the network structure.

  4. Structure closure bonuses - awarded for achieving a certain number of active participants, sales volume, or other set goals in each distributor’s leg.

All these bonuses create a reward system that motivates distributors to increase sales, recruit newcomers, and maintain a balance between the legs of the structure, ensuring the dynamic growth of your MLM company.

 

Advantages and disadvantages of binary marketing

Like any type of compensation plan in network marketing, the binary MLM plan has its strengths and weaknesses. Among its main advantages are:

  1. Clear structure. The binary plan has a simple and clear structure, allowing newcomers to easily understand the terms of cooperation and quickly adapt to the company.

  2. Rapid company expansion. Since each distributor only needs to recruit two new participants, the partner network grows significantly faster compared to other bonus plans.

  3. Encouragement of quality teamwork. The balance between the two legs of the structure benefits all participants, leading distributors to support and help each other. This creates a cohesive team that works towards a common goal, increasing the profitability of your business.

While using a binary marketing plan in your MLM company, you may encounter some disadvantages, including:

  1. High probability of inactive partners. Once your distributor has recruited two people, they might stop selling your products and recruiting new participants, receiving passive income from the sales of the weaker leg of their structure.

  2. Unlimited depth of structure. In binary marketing, the width of the structure is limited to two participants, but its depth has no limits. If a large number of partnership levels form, it becomes challenging for leaders to manage their structure, leading to decreased productivity.

  3. Vulnerability. In its pure form, the binary plan, like any other MLM plan, can become unsustainable and fail to withstand even minor destabilizing factors.

How to create a reliable binary marketing plan MLM

To develop a binary MLM plan that will work stably in the long term, you can use several strategies:

  1. Set a minimum turnover to earn bonuses. This minimum can be, for example, $100. If participants in the structure do not achieve this turnover, all their bonuses are forfeited. This rule ensures that your partners maintain a certain level of activity and sales.

  2. Introduce level depth limits in the binary. When a leader closes the maximum number of levels, a spillover effect occurs. This means they start building a new structure from scratch but still receive certain bonuses from their closed structure. This increases leader motivation and prevents structure oversaturation.

  3. Combine with other marketing plans. A successful MLM company rarely applies a single type of marketing in its pure form. The binary plan can be used as part of a hybrid bonus plan, for accruing specific bonuses, or by adding your unique bonuses. This way, you create a marketing plan MLM that perfectly aligns with the goals of your network business.

Thus, with proper calculation, a binary marketing plan will become a solid foundation for the long-term success of your MLM company. This is confirmed by our clients at Global Trend. A well-calculated binary MLM plan and the innovative software suite Flawless Core have helped the company grow to over 2 million active distributors in its structure. Currently, Global Trend continues to actively scale up.

The FlawlessMLM team has 20 years of experience in developing flawless software solutions and marketing plans for MLM companies. Contact our experts for a consultation, and we will help you create an attractive bonus plan for the successful development of your partner structure and the achievement of your business goals in the MLM market.