Binary Compensation Plans

Binary Compensation

A distributor focuses on getting 2 front line distributors- a left distributor and a right distributor. Later recruits are placed in the front line of other distributors. This is the definition of a binary compensation plan.

Binary means 2. It is commonly used when referring to computer memory meaning: on & off or 0 & 1. In a compensation plan, it is easiest to understand as right and left.

Commissions paid are based on volumes in the legs, but it can vary as to which leg will drive the commissions. There are examples of commissions being calculated on the leg with less volume (weak leg), or dividing up between the weak and strong legs.

Weak Leg

In Binary Compensation plan, the weak leg is the leg with a smaller amount of volume.

Strong Leg

In a Binary Compensation plan, strong has the great volume.

Since the weak leg will drive a greater amount of compensation, this is where new recruits will often be placed by a distributor. Usually, distributors will work to grow the weaker leg, but this depends specifically on how compensation is calculated.

Spillover in Binary Compensation plans can drive lot of growth for downline distributor’s very quickly, but dries up if a distributor is not in the leg the upline is trying to balance.

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