Network Marketing

Introduction

       Network marketing is the Direct selling method in which independent-agents serve as distributors of goods and services, and are encouraged to build and manage their own sales force by recruiting and training other independent agents. In this method, commission is earned on the agent's own sales revenue, as well as on the sales revenue of the sales-force recruited by the agent and his or her recruits (called downline).   

Binary Plan

     A Binary plan is an organizational structure used in Multi-Level Marketing (MLM) organizations. In this structure, new members are introduced into a Binary Tree where each “node” or new member of the organization has a left and right sub-tree. Considered one of the simplest of the popular marketing compensation plans, binary plans began to be introduced by MLM companies in the late 1980s and became one of the four most commonly used organizational structures by the early 2000s.

          
          
            In this  typical Binary Tree structure, the Top ID(Brown) will receive compensation from the sales of the Downline  members of LEFT & RIGHT Team. In each sub-tree of  Binary Plan, there is an outside leg, also known as a Power Leg, and an inside leg, known as a Profit Leg. Another element of a Binary Plan is that it makes each member only responsible for Recruiting and Sponsoring two other people to join the plan, which can potentially lead to a rapid expansion of the plan in a short amount of time, with a potentially unlimited number of Members.

SpillOver

               However, if a Recruiter successfully recruits more than two people, the new addition will be added to next available node in the Power Leg.This allows for the profits from gaining a new member to be shared between all ancestors in the power leg, regardless of who recruited them, which is a process known as Spillover. This helps foster a team-like dynamic within the binary plan as it encourages collaboration between different members as they all mutually benefit from adding new members.

             Due to the nature of a Binary Tree being a recursive data structure, a Binary Plan allows for more group of people to potentially become members of the plan.

Benefits:

• Fostering Teamwork. Both Top Member  and Downline Members will get the same benefits from successfully recruiting new members, the recruiters are more likely to help them to strengthen their sub-trees, allowing for the child to learn about sales and recruitment. Furthermore, due to flushing, a binary plan gives incentive to companies to try to keep all the legs of the operation at a high level, not allowing for certain sectors to lag behind.
• Spillover. The profits of gaining a new member is shared between the entire high-line, which encourages everyone to attempt to recruit new members and make the binary plan larger.
• Near-Infinite Depth. Due to the way that the Balanced Volume (BV) calculates payout, every member in the up-line is guaranteed to get some profit for a successful sale .
• Rapid Expansion. As each new member only needs to recruit two other
• Volume-based pay structure. In a binary plan, distributors who bring orders are guaranteed to be paid more for them which is not true for other major MLM compensation systems.

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