If you’ve done any study about MLM, you understand that compensation plans can be very confusing.
A person can say, “We pay 75% commission on the products that you sale.” You can think, “Wow, if I sell a $10 product, it’s $7.50 in my pocket. If I sell a $100 product, I’m walking away with $75 in my pocket.” It’s OK to think that, it’s just that isn’t right.
The 75% is the total commission paid out on the product and you may be sharing that both upline and downline, but you are definitely not getting the full 75%, or the business you are working for could be no more.
- Binary compensation is a common plan used in MLM businesses. It is one of the most appealing and most popular. The problem is, it works for the company more than it works for you, in most cases.
The basic sense of binary is the bi equally two. There is the:
- two you recruit
- two legs on which you recruit
- two directions to help you recruit
That’s it? Yep, it’s just that simple and that’s why it’s popular.
- Two you recruit: You only have to recruit two into the system
- Two legs: Each person you recruit starts a leg; You have two legs to develop. No more, no less.
- Two directions: Those whom you recruit and spillage allows those above you to help those below you, there are only two legs that need to stay constructed.
What makes that so alluring?
- Most prospects quickly buy into the strong possibility they could find two other people who will be as interested and as motivated to buy in and stay in.
- Most prospects believe the same will happen with any two they enlist (they each can find two others equally suited to the task)
- Most prospects enjoy the help coming from above and from below, it fosters team spirit to strengthen the legs.
So, why is it so heavy…seems light to me?
- Bi means two legs…but your commission is only figured on the weaker leg. So, you have a “power leg” and a “pay leg.”
- Once you are placed in a leg, there is no changing from strong to weak to sure up the weaker side and get more commissions.
- If one “power leg” just takes off, grows and sells at an enormous rate, you’re still only paid at the weaker “pay leg” rate.
OK, I’m just going to be very careful to get equally strong members on each leg.
That is everyone’s expectation. Invariable, those who achieve it tend to end up on the same leg and it becomes even more outrageously powerful than the pay leg. In fact, a frequent request from new recruits who understand this dynamic is, “I’ll come in, but I want to be part of the power leg side.” The problem with that is, the power stays out of balance with the weak, pay leg. The advantage of that is, you have a strong leg, so in actuality, you only have to work on the weak leg. That in effect reduces your focus and effort from working on two legs, to just strengthening your pay (weak) leg.