Binary Compensation Plan vs. Unilevel Compensation Plan

Distributor behavior is always driven by business models, and the binary compensation plan and unilevel compensation plan follow right along with this. These MLM compensation plans operate in completely different ways, even though some people think they are just another pay plan. Reps have to do different things in each plan in order to be paid the highest possible commissions, and each plan has its advantages and disadvantages.

Binary Compensation Plan Exposed

A binary compensation plan has two legs (binary means two) and only two legs. The idea is to sponsor two distributors, one in each leg. Ideas are one thing, but in reality, things rarely go exactly according to plan. It usually works out that you build one leg and your upline builds the other. Starting with the third distributor you sponsor, you must place them below someone already in your downline, because you cannot build a third leg. Your upline usually ends up building what is known as a power leg for you – straight down, one under another. The biggest thing to remember in a binary plan is that you get paid on your smaller leg only. Sometimes you get paid on both legs down to the balance point, but at a reduced rate. In either case, it is the size of the smaller leg that determines the commission you get paid.

Unilevel Compensation Plan Exposed

In a unilevel compensation plan you don’t build legs – you build levels. Your first level is everyone that you’ve personally sponsored. When your reps sponsor someone, that person becomes part of your second level, and so forth. Usually, 4 to 8 levels deep are what you’ll be paid on, and nothing beyond that. In a unilevel plan, it is best to place everyone you sponsor on your first level, also called your front line. If you build depth by placing people under others, then you’ll be missing out on some commission in the long run.

Binary vs Unilevel – Which Is Better?

A binary comp plan encourages you to work more closely with your team and build depth. You and your upline will be responsible for building the power leg for your team. If you get in at the right spot, it is possible to make good money with minimal work since people will be placed under you. There are no free rides in a unilevel comp plan, as none of your organization will be built by your upline. However, in the long run you won’t be paid on your entire organization, and there is less teamwork going on. If you value equality and fairness, and prefer being rewarded for your own efforts, you’ll want to build a unilevel compensation plan. If you like building depth, teamwork, and being paid on more of your organization, then the better option for you is a binary compensation plan.