Binary and Unilevel are the two foremost compensation plans used in present-day network marketing industry. Even though two plans possess the same tag “The Pay Plan”, these business models function in an entirely distinct manner. Alike many other compensation plans these plans have their own pros & cons, strengths & weaknesses.
Binary Plan works on the distribution of two legs, right leg & left leg. Success in binary compensation plan is only achieved through teamwork and combined efforts of downlines. Because compensations are paid on group volume. In binary, the compensation is usually calculated as 10% of the total business volume of the weaker leg. Ergo, it is essential to sustain each leg equally. So, as to make benefit from the binary one must maintain an effective downline in two legs uniformly.
Spillover marks a situation in which, after recruiting the highest allowed number of downlines on the first level or stage, any recruiter signed after that will ‘spill over’ to the next possible level. And if the next level is also occupied, to the one following it. In binary spillover is used to occupy or increase the volume of the weaker leg. Thus, spillover is considered as one of the foremost advantages of the binary compensation plan.
Advantage of Binary Compensation Plan
- Unlike other compensation plans, binary plan pays up to unlimited depth
- Rapid expansion of downline is possible
- You cannot make benefit from all your downline recruits. Only from one leg.
- Very complex downline structure, which includes spillover and check matches
- Flushing- If one leg is comparatively active and stronger than the other leg, there is a possibility for great loss time, money and work.
Unilevel MLM Plan allows only one line of distribution. So every recruit you sponsor will fall on your forehead (i.e no spillover).
There is no width limit on this plan and the commissions usually paid out at a specified level depth. In this plan, each member can recruit as many members in his downline (length). As there is no further restriction, you can build stronger and longer (length) network.
In unilevel, compensation is usually calculated as (3-8)% of the total business volume to a specified level (generally, 5-8 levels).
Advantage of Unilevel Compensation Plan
- It is very easy to implement unilevel, because of its simple and complex-free structure.
- Unilevel can be more lucrative than any other compensation plan if we recruit good leadership in the downlines.
- Faster bonus and solid residual income
- Unlike binary plan, Unilevel does not pay up to unlimited levels.
- We directly cannot increase the volume of our downline except our primary or first level. This will affect the total income unless some strong leadership is recruited in the downline.
- No spillover or checkmatch
- Not much possibility of rapid downline development