Hope you all would have heard about the most fascinating and lucrative business. Yes! that is MLM business. By comparing the MLM plans, it will provide you the outline of the MLM business to stay profitable. Here in this writing, Binary Vs Generation MLM compensation plan is discussed, which will allure more people to accomplish MLM business successfully.
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Though there are various MLM compensation plans followed by different organizations. The most popular plan which is adopted by most of the MLM companies is Binary MLM, Generation MLM plans.
In this article, we will see the difference between Binary and Generation MLM compensation plan.
Before looking into it, we will see what is binary and generation plan.
What is Binary Plan?
Here in this plan, it is two-legged structure one is right leg and the other is a left leg in the MLM structure. Each distributor will be able to recruit only two members and the two members, in turn, will be able to recruit another two members in the right and the leg of the MLM structure. This is how the structure goes in Multi-levels of this business.
What is Generation plan?
The generation plan is an MLM plan which is based completely on product selling and profit-sharing of the marketing business.
Know more about the Generation MLM Plan here
Comparison of Binary Vs Generation MLM Compensation Plan
Structure
1. The structure is perfect with two legs as left and right leg of binary whereas here in generation plan, the number of downlines does not restrict width as well as depth-wise.
2. In binary structure, the depth is unlimited whereas in generation plan both width and depth is unlimited.
3. There is spillover in binary structure whereas there is no spillover in a generation plan.
Spillover is nothing but when a new member enters other than left and right leg of a distributor. The new member will be under the downline of the sponsor.
4. The binary structure looks simple with two legs of downlines and spillover will always fall under the power leg but the structure of the generation plan involves an infinite number of downlines depth and width-wise for a distributor and forms the generation levels.
5. In Binary, there is no need for a separate group of generations as the structure is perfect. Whereas in Generation MLM plan, the structure is completely from product selling and generations of the group of downlines are from the MLM company.
6. Binary plan is a volume-driven plan, whereas generation plan is a sales-driven plan.
7. The binary plan expands very fast as it needs to recruit only two downlines for a member. whereas in a generation plan, there is no limit for downlines.
Commission Calculation
1. The MLM compensation calculation becomes easier in Binary MLM when compared to generation MLM
2. In Binary MLM Plan, the commission is based on business volume points earned by the downlines and not by the levels of downline but as there are generations in generation plan, the commission offered is based on the levels of a generation.
3. In Binary MLM plan each member earns a commission based on a certain percentage of downline’s business volume. In generation MLM plan the commission is calculation is by profit-sharing in the generation at each level.
4. In Binary, there is no level commission and commission will not decrease with increasing levels. In Generation plan, the commission decreases as the level of generation increase. For example at the first level the members may get 10%, second level 6%, third level 4% and so on.
5. In Binary plan the earning benefits are not the same. Whereas, all the members in the generation plan at each generation level will have the same earning benefits.
Rank
1. Binary MLM plan is structure is in such a way that the rank of the member depends upon the position of a member in the network. Whereas In a generation plan, the rank of similar or different rank people will be under each generation level.
Bonus
1. In Binary MLM Plan, there are generally two types of bonuses i.e pairing bonus and sponsor bonus involved. Here in Generation plan, it is based on target sale and at the level of the generation.
Pairing bonus is the bonus earned for certain targeted downlines paired business volume and sponsor bonus is the bonus earned each time when the new member is recruited by the distributor
Product Advertisement
1. When compared to the product advertisement in Binary plan, here Generation plan is mainly based on product selling and so less advertisement is required.
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Conclusion
In this article, hope you will be able to understand the benefits of binary and generation MLM plans by analyzing the differences between them. It is important for any MLM organization to analyze and customize the MLM plan to stay profitable with their MLM business.
Similarly, the comparison of Unilevel vs Binary MLM Compensation Plan provides you more information about the other two of the major MLM plans.
