A binary compensation plan is a structure used in multi-level marketing and network marketing to organize and reward distributors for their sales efforts and team building. The compensation plans differ in their structures, and the structure of the Binary compensation plan has been a huge hit primarily because it has helped various companies reach high success levels.
Each distributor in a binary compensation plan has a limit of not having more than two distributors in their first level of sales. It is supposed to consist of two legs (right and left), and every distributor has a subtree, so a binary tree is formed.
Every distributor in a binary compensation plan has to purchase an enrollment package which is either a list of products or services that your company has. Once the distributor has bought the enrollment package, he becomes part of a binary tree of distributors of your company.
Each new member that is sponsored by a distributor in a binary compensation plan is added either on the left or the right leg. A binary tree is formed by adding two new members on each side of the subtree. After the binary tree is formed, all the added members are then spilled to the downlines.
A binary tree is always infinite and never gets completed. The tree is only formed when the left and right legs are filled, and more members are added as the downlines.
Here are the main advantages that a Binary MLM compensation plan has to offer:
Extending the advantages further, if you are using an MLM solution or software like the Global MLM Solution,the Binary plan is the easiest to understand for most businesses who are starting off their MLM journey.
A matrix compensation plan is a type of multi-level marketing or network marketing compensation structure that organizes distributors into a fixed-width and fixed-depth matrix.
The plans of an MLM Matrix compensation plan are written in an x*y form where the x represents the width of the plan while y represents the dept. So, if it is a 3*2 matrix plan, the width of the plan will be three distributors on the first level. You can add no more distributors to this level anymore.
The next joining members in this plan are then added to the next level, which is the second level. In this example, the matrix’s depth is two, which means the second level would be the last one.
So, if three members are added to all the three distributors, the total number of members in this matrix will be 13. This includes one sponsor, three distributors, and nine second-level members. While this may seem like a limited plan, looking at all the members working as a team for business success can turn out to be great for the MLM business owner.
Here are the main advantages that a Matrix MLM compensation plan has to offer:
Now that binary and matrix MLM plans have been described in detail to clear out your concepts, here is the comparison between the two to make it easier for you to decide which one you should go for. Here are the basic things that both these compensation plan differ in.
There are two spillover preferences in a matrix MLM plan, including:
The Binary levels have five spillover preferences, including:
Due to being infinite and having an easy layout, the downline expansion is relatively easier for the binary compensation plan. The limit on the matrix compensation plan makes it complicated.
While the number of legs is limited to two in a binary MLM plan, this is not the case with the matrix MLM plan. In a matrix MLM plan, there are multiple legs on which the distributors can be placed according to the depth and width of the matrix.
Implementing a binary MLM plan is quite simple and easier compared to the matrix MLM plan. This is because the Binary MLM plan is limited to two members under each distributor. In contrast, in a matrix MLM plan, each distributor can have various members working under them, making things complicated.
A binary MLM plan will be a good option since it is more ‘profitable’ than the matrix MLM plan.
The reason being that the Binary MLM plan has only two frontline distributors and the profit earned is distributed only among two people making the up-line have additional earning even when being on a tight budget. This is not the case with matrix MLM plan as the width of each line can vary and have more than two members and thus the earnings and profits get more distributed.
Additionally, the Matrix MLM plan offers five types of bonuses among the team including sponsor bonus, level commissions, matching bonus, position bonus and forced matrix bonus which means the commission will get more divided among all. While for the binary MLM plan, there are only three commissions namely sponsor bonus, pairing bonus and matching bonus which makes it relatively more cost-friendly since it gets less divided compared to the matrix plan.
There is no limit on how a distributor decides to build his network in a binary MLM plan. This does not apply to the matrix MLM plan since the depth is limited to certain members only under each distributor.
In a binary MLM plan there is no depth limit and the distributor can enjoy unlimited depth of commission. However, for a matrix MLM plan the commission is limited to a certain depth.
The downline matching is not much essential for binary MLM, but it plays a vital role in helping the matrix MLM work better.
Teamwork doesn’t make much difference in the binary MLM plan, and even when a member is lazy, it will not affect the whole team’s work. However, the success of a matrix MLM plan is entirely dependent on the teamwork of the entire network.
Both the Binary and Matrix MLM plans are available today to provide the benefits they have to offer for any kind of business. If you are looking for an MLM plan that is not only easy to use but also provides some amazing benefits like excellent guidance from seniors and has the same compensation and commission for everyone, Binary MLM is your go-to option. But if addition of infinite members bothers you and you want to get indulged with limited members while enjoying significant group sales among distributors, matrix MLM plan is the one for you.
The MLM software can help your business generate leads, manage e-commerce tasks, automate the marketing process, and build powerful teams. You can now easily make the final call after reading the binary vs. matrix MLM compensation plan comparison and the benefits these plans offer.