A Binary Plan is a systematic organizational structure that is established by Multilevel Marketing (MLM) companies and is the most popular marketing compensation plan. It is quite popular among companies, part-time professionals, network marketers, and all the other members who wish to set up an MLM business. Consequently, the members are supposed to add only two forefront members.
This means that the sponsor can make only two distributors underneath, i.e. Left Leg and Right Leg. It is also referred as Power Leg and Profit Leg. If member sponsors more than two new members, excess members are placed at downline below the sponsoring member's forefront. This 'spillover' is an attractive feature that appeals new members, since they only need to sponsor two members to participate in the binary compensation plan. That is why it is often termed as Binary Spillover MLM Plan.
Lets Understand Binary MLM Plan with an example that is based on 1:1 ratio concept.
Suppose a company has decided the package amount of Rs. 500 and binary percentage of the amount for downline members is 5% of the package amount (5% of Rs. 500). Sponsor A, can have only two direct members; B on its left & C on its right. B will have two members as D on the left side and E on the right side. C will have members as F on the left side and G on the right side. D add H on left side and I on its right side.