Since the Vemma vs FTC shakedown that happened a few months ago, the question
on everyones mind has been “Are Binary Comp Plans Safe ANYMORE?!”
I’ve been asking a number of industry leaders this very question
wanting to get their input.
The opinions that I’ve been getting regarding the safety of the Binary
has been quite interesting to say the least.
It’s safe to say that a large majority of experienced Network Marketers
know that there are a couple advantages to Binary compensation structures
along with a handful of disadvantages.
Let’s talk about some of the ADVANTAGES of a Binary Compensation Plan:
1) Rewards Very Aggressive Builders very heavily.
2) Builds heavy momentum due to massive fear of loss.
3) Creates a fast paced community.
4) Ability to purchase multiple income generation centers (typical in MOST).
Now, let’s chalk up a few of the disadvantages of a Binary Compensation Plan:
1) Creates a handicap on the “inside leg” that no aggressive leader wants to go in.
2) “Binary Creep” is virtually 100% eventual.
3) Larger “buy in” packages to force more volume up the organization to cycle.
4) Fast and aggressive attrition (dropout) rate.
5) Usually, a large majority won’t make a sustainable income which again adds to attrition.
Some popular MLM’s with Binary Structure: