SELECTED PRESS RELEASE:
1/24/2012 7:23:53 PM EST
|Bottom Line on Binary MLM Pay Plans, by Lou Abbott and Jeff Olson
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Lou Abbott (MLM – The Whole Truth) speaks out about binary compensation plans:
“Binary compensation plans have a huge unsolvable problem that makes them inherently unfair and bad for the industry.”
According to Lou, the pros of the binary are:
You only have to build one leg.
You get spillover.
You get paid to infinite depth on one leg and perhaps some from the other leg.
You can have multiple business centers.
Matching bonuses are a smart improvement, solving the big problem of finding your strong builder in
your power leg, not your pay leg.
You can join a power leg where someone builds your strong leg and you only have to build your pay leg.
[Ed: Some consider this a pro, but Abbott and Olson call it a major con.]
The cons are:
You must balance your legs.
You get paid commissions like 10% on weaker leg. [Ed: This makes your commissions actually 5%!]
Spillover creates entitlement and a welfare mentality leading to zero business.
Binary Creep: Early binaries paid out too much to top leaders and then eventually too much to the field,
making the company unviable. This was solved by caps on earnings.
Power legs lead to binary games. Leaders will demand to be placed in a power leg where one leg is built for them. They will work only if the upline builds the leg for them, leading to more entitlement and more welfare mentality.
Binary compensation plans are inherently unfair.
Jeff Olson (The Slight Edge) has had huge success and experience in the network marketing industry.
Jeff makes things obvious when he explains …
“Binaries are wrong. Experienced leaders who understand the industry will demand to be inserted into a power leg so they only have to develop their pay leg. They prey upon people who know nothing and put them into their pay leg. Those people now have to build two legs while the leader only has to build one. The inexperienced people have to do twice as much as the experienced leader because “they just didn’t know.”
That’s not fair. It’s the big secret of binaries.
People eventually realize what has happened to them when they can’t get powerful networkers to join them in a pay leg. Once they understand they have been tricked, they will leave and go to another company where they can demand to be put in a power leg. In that company, they will put people into their pay leg and repeat the unfair cycle.
There’s no stability in a revolving door.” steves.mentoringforfree.com
To YOUR success – NOT your failure!
BUSINESS OWNER COMMENTS:
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|A valuable message from two very well professionals in MLM|
|Hey Ron, just reposting what these two highly regarded experts have said.
I used to hang on to some stuff I should have left behind years ago. Mentoring for Free helped me admit that (ouch!) and get past myself and begin moving ahead at light speed - ONLY because I figured out how to get out of my own away.
Appreciate your comments.|
|Hey Steve, Interesting can not really take a side on this one. See your point, the bottom line is do your research and decide what will work best for that given individual. |
|Annemarie, I highly respect your open and honest answer. Of course we all know anyone can gather enough statistics to substantiate their point.
I have been in quite a few MLM's and have only seen one geared for the part timer and heavy hitter alike. That creates a more cooperative environment instead of the push-pull so frequently seen in our great industry.
|I respect Lou Abbott and Jeff Olson in this industry and their advice. I'm not sure if any MLM pay plan is 100% fair and equal for every member...pros and cons for different payouts...my experience. Binaries have worked best for me. Thanks for sharing. |
|I did not know how dangerous a binary setup can be until I read this.|