How the Binary Plan Works

As promised, here’s a rundown on the standard binary plan. (I’ll finish up next time with some comments on the “new generation” binary and its advantages. But first, let’s clarify the basic principles.)

The binary operates like this. When you join, you set up one or more “business centers” under the person who sponsors you. Each business center has a notional left and right side. These sides are the only two positions on the front line of each center, which is how the plan got its name “binary.” So the binary is a “limited width” plan.

You can continue to sponsor new people once you’ve filled these two positions, but you have to place them in an open position further downline, in someone else’s left or right side. (But still, of course, in your own downline.)

This leads to a phenomenon called “spillover,” meaning that someone in your upline may choose to place one of their new recruits underneath you — giving you the benefit of this person’s volume, and that of whatever team they may build. Equally, you can choose to place one of your new recruits in a position where you feel it will assist and encourage somebody else already in your team.

By the way, don’t make the mistake of thinking that you can sit there and live off spillover from your upline. Number one, if your upline is building actively, he or she will have an ever-increasing number of choices as to where to place new associates; number two, they’re not likely to place a keen new person under a go-nowhere distributor. Instead, they’ll be looking to encourage an already committed and active member of their downline, and at the same time ensure that the new person is placed where the energy is high and they can get some help to get started, plus good, ongoing mentoring.

When you join a binary, you generally have the option of taking either one or three positions. The second option simply means that in addition to your No. 1 center, you also take up the left and right positions on your No. 1 center’s front line. This ultimately gives you the chance to double your commission earnings, as long as you take the business seriously, and follow your upline’s advice and business-building system.

You “activate” each of your centers — that is, turn on the commission switch — by purchasing a set amount of the company’s products, worth so many points value for each position. This is a once-up requirement.

Incidentally, some plans allow you to “re-enter” via a new position in your own downline, as a reward for building up consistently high turnover. Under these rules, big players can end up owning 20 or more centers, and reaping a reward from each one. This is how it’s possible to earn very big money in a binary plan. Just remember that it doesn’t come by luck or accident — you have to work hard and smart, and follow a plan, to create this kind of result.

Here’s how the serious player works a binary network marketing plan.

You start with three centers: your 001, 002, and 003 (the latter being on the left and right side of your 001 center). With the help of your sponsor and upline, and using their business development and training system, you continue telling your story. This might concentrate on the products, or on the income opportunity, or both. Some very successful people I know start with the network marketing concept itself: the chance to build your own business for minimal cost, and develop a residual (or passive) income. They tie this into Robert Kiyosaki’s well-known Cash Flow Quadrant.

(How you get people to talk to is a job for a separate article. Just understand that there are numerous methods.)

Your job is not to persuade or convince anyone, but simply to give people enough pertinent information to help them make an informed decision as to whether your opportunity or product is right for them at this time. (If you don’t steamroll people, and treat them with dignity and respect, many of those who say “No” now will say “Yes” later, when their circumstances have changed.)

Using this approach, and improving your presentation with practice, you’ll soon start adding new personally sponsored distributors to your team. You’ll place them down the left side of your 002 and the right side of your 003 centers — continuing down the “outside” and ignoring all “inside” positions until your 001 center “maxes out” (see below). You’ll also attract people who just want to buy the products at wholesale prices.

Some companies require such people to register as distributors; some don’t. Either way, their purchases will add to your group volume for the particular week when they occur.

You then earn weekly commissions based on balanced group sales volume on the left and right sides of your 001 center, according to the company’s commission schedule. This payout will be in specific increments, like 1000 points per side, 2000 points per side and so on, up to a maximum of say 5000 points per side per week. At that point, your 001 center is said to be “maxed out.” Meaning that you can earn no more commission from that center for that week.

The first objective for the serious player is to max out their 001 center each and every week (bearing in mind that each distributor is required to purchase only once every four weeks, and customers normally do likewise because that’s how long a product pack is usually designed to last. Of course, purchases may be more frequent where several family members are on the product, or a distributor gives samples to new prospects.)

There are a couple of things to note here. The first is that some companies don’t require an exact balancing, but pay on a ⅓—⅔ split of volume. This means that you’ll get paid for the full amount if you have, for example, 1000 points left side, 2000 points right side (or vice versa). The second point is that to receive commission, most companies require you to be on “autoship.” That is, you agree to an automatic order for a fixed amount of product each 28 days (the normal cycle for a binary plan, because of their weekly payment schedule).

Once you are paid commission on volume points, they are deleted. A serious flaw in some early binary plans was that ALL points were “flushed” or “washed” at the end of the week, with no carry-forward of unpaid points. No reputable company still uses this practice.

You are paid on an infinite number of levels deep, up to a maximum of whatever balanced volume per week maxes out that center. (Levels don’t matter; only volume does.) Above this amount, any additional volume is non-commissionable and is flushed. However, if you max out four weeks in a row, in a company with re-entries this is where you would slot yourself in to take full advantage of the additional volume.

Below the maximum amount, unpaid volume is carried forward, as long as you remain on autoship.

The final feature of binary plans that I want to mention is the phenomenon called a “runaway leg.” This just means that someone downline in your left or right leg sponsors lots of people, and develops a group whose momentum drives rapidly downward and out of your pay range. (In our example above, your pay range would be 5000 points per week on each side.)

Glass-half-empty types moan and complain about not getting paid on this volume because their other leg is too small. Glass-half-full types welcome it, because they realize that half their work has been done for them. They only have to focus on building the other side of their group to take maximum advantage of their runaway leg.

I’ll leave you to figure out which type of person has all the fun!

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