Binary pay plans can be rewarding, but there are problems.
A binary pay plan is a type of multi-level marketing (or MLM) structure commonly associated with sales in which you recruit two others to work directly under you, and they each recruit two more individuals, and so on. Each of the individuals under you is the top member of what is called a leg, and a portion of each leg's earnings is shared upward. While one leg's earnings will be shared with you, the other's will go to the company. Binary pay is a popular plan among adherents of the MLM business model but, like any other pay plan, it is a system with some potential flaws.
Income From Binary Plans Takes Time to Build
As with other MLM pay plans, binary pay plans will typically generate little revenue at first, and may only provide notable income after months or years of establishing successful legs beneath you. Binary plans may even take longer to build than other MLM pay structures because of the limit of only two people directly under you, while other plans might allow limitless numbers of earners to perform directly beneath you.
The Need for Quality Earners Over Quantity
Some MLM pay plans benefit from the recruitment of a large number of earners generating small amounts of income individually. In such structures, a high number of low earners can still generate notable income for the person at the top layer. In binary plans, where the number of earners beneath you is limited (and the number of earners beneath your earners is also limited) you will want to ensure that you only recruit consistently high earners into your matrix.
Lost Revenue on the Highest Earners in an Unbalanced Down Line
In a binary down line, where your earnings are based on the performance of two separate legs, you are only paid for the earnings of the least successful leg. If both legs are relatively even in earning potential, this will not create a problem, but if one leg drastically outperforms the other, the higher earnings of the more successful leg will go directly to the company, and you will be left with only your share of the weaker leg's earnings.
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