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Terri Pattio
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Terri Pattio   My Press Releases

MLM Training - Compensation Plans Part 2

Published on 5/30/2017
For additional information  Click Here

 

What I will be talking about today is the Binary compensation plans.

What is a binary? It's a pay plan that has two legs. YOU need to get two people to join you and get paid the bonus money. That's a simple and quick explanation, now for a more detailed explanation.

Here it is:

A Binary compensation Plans is any plan that has only two legs. In a binary system, your two front line positions are Gold because your two legs have to remain balanced. If one is longer than the other, you will only get paid down through the lowest level of the short leg (this is known as the weak leg). Also, most bonuses are only available on balanced legs. This leaves you juggling to try and be sure to maintain balance making you focus primarily on recruiting. The other issue, which is related to the first, is that someone in your upline could place a distributor on YOUR front line. Sounds good right? NO. Remember, you want to reserve these spots for serious builders. Otherwise, you will be stuck building under one of them. Then, as you recruit and place new members, they will always be on someone's front line. As you can see, fairness is not to be found in these Compensation Plans.

 

The thing is, in 2 to 3 years this type of plan will need some tweaking.

If the company does not do this, then it starts to pay out to much money. If you're in a binary, the company will have to fix this, YOU MUST REALIZE THIS. Otherwise the company will not last.

 

What I'm seeing a lot of, is the so called check match, that is often associated with this type of plan. When the companies tell you, that they will pay you 50% on everyone you sponsor in. Where does the money come from? It has to come from some where. It comes from your strong leg, you don't get paid on your strong leg, it's the weak leg you get paid on.

 

NOTE: There are some companies that will say they will pay you on both legs even if your legs don't balance. Don't believe this because it's no way possible this can happen. This is just hype and you'll have to jump through plenty hoops to get paid. Trust me on this and remember what I'm telling. 

 

Here's an example of what I'm talking about:
Say you got 2,000 in volume on one leg, and then you have 1,500 in volume on your other leg. You will only get paid on the leg with 1,500 in volume (this is your weak leg). In order to be paid on both legs, the volume would have to be equal in both legs. This doesn't happen to often and this is why there's breakage in the compensation plan. More about breakage later in the article. 


Now let's just say that you sponsor someone in and they really get busy and start sponsoring people in and now the leg with 1,500 in volume increases to 3,000 in volume and the other leg is still at 2,000, now you will only be paid on the leg with 2,000 in volume (this is now your weak leg). You see how this works, this is called breakage, and who do you think pockets the money from that 3,000 in volume that was generated. The company does, that the breakage.

Now I know what you're probably wondering, what's the best pay plan? I will put it this way, any pay plan that pays the most amount of money on average volume. Pretty simple, huh!

It makes perfect sense doesn't it? When you got a pay plan that does this, your retention will increase. Your distributors won't quit, and YOU will build a huge residual income.

See you tomorrow, I will be talking about the stair step break away compensation plan. I invite you to come back here and learn about it.

 

Before I go, I want to share with you a very powerful FREE resource that will benefit you greatly in finding the right business so you can have residual income and retire one day.

 

Click here ==> MLM training resource guide.

 

Terri Pattio

Network Marketer and MLM Coach

Mentor with a servant's heart

Twitter Strategist

 

 

My amazingly, simple Twitter strategy will get you 200+ new followers a month

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