Binary network marketing pros and cons explained
One of the most important aspects to consider with a company is the multi level marketing compensation plan — what dictates how distributors earn commissions and bonuses. Following is a brief explanation of the major types of plans and variations. They often have exotic names. But they tend to be variations on four major types of plans…. This is the most basic and most easily explained multi level marketing compensation plan.
The 2nd Level is filled by individuals that you 1st level downline members sponsor, and so on for the consecutive levels. There is a limit in depth that the company pays you. Most companies only pay commissions to a depth of 7 levels or so, however, an infinity bonus explained later is usually provided on levels beyond 6th and 7th levels. 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. 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. Simple to explain, Group cooperation promoted because payout is based on group volume, unlimited depth, Payout is often on a weekly basis.
The FTC does not consider it legal to make money by simply signing people up, since that is the concept used by a pyramid scheme. However, a fast-start bonus, if your marketing focus is product, is just an initial commission from the company for recruiting someone into your downline.
Infinity Bonus An Infinity Bonus is an additional commission, above and beyond the normal multi level marketing compensation plan pay structure, based upon the total group volume of your organization. An Infinity Bonus can accomplish two things: You would still receive a normal commission, according to the normal pay structure, from that large organization. In almost all network marketing compensation plan, lower levels pay a lower commission.
Matching Sometimes referred to as Mega-Matching, usually in a binary-type of multi level marketing compensation plan. With a binary plan, you earn commission from every person in each leg, whether you personally sponsor them or not.
This was just a quick network marketing compensation plan overview. Click here to return to: Thanks to the proven strategies revealed on this CD. Then Don't worry — your e-mail address is totally secure. A Review One of the most important aspects to consider with a company is the multi level marketing compensation plan — what dictates how distributors earn commissions and bonuses.