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The Binary Plan

The document summarizes a binary plan used by multi-level marketing organizations. A binary plan structures new members in a left and right binary tree, with one side referred to as the power leg and the other the profit leg. Compensation is based on a formula comparing sales in the power leg to sales in the profit leg. While binary plans claim new members are recruited through the efforts of those in your upline, in reality most new recruits are shared across the organization and the benefits of upline recruiting are minimal.

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Shashikant Madkaiker
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2K views

The Binary Plan

The document summarizes a binary plan used by multi-level marketing organizations. A binary plan structures new members in a left and right binary tree, with one side referred to as the power leg and the other the profit leg. Compensation is based on a formula comparing sales in the power leg to sales in the profit leg. While binary plans claim new members are recruited through the efforts of those in your upline, in reality most new recruits are shared across the organization and the benefits of upline recruiting are minimal.

Uploaded by

Shashikant Madkaiker
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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The Binary plan is an organizational plan used by multi-level

marketing (MLM) organizations wherein new organization


members are introduced into a Binary Tree structure, or a left and
a right subtree.

A typical MLM binary tree structure. The blue individual will receive compensation from the sales of the downline
red members.

Normally, one subtree is referred to as a Power Leg while the


second subtree is a Profit Leg.
The Power Leg structure has automatic placement of new
members, even by members previously enrolled, or ancestors, to
the current member. Since any new members must be placed
below their enrolling member, they naturally must fall to an
available leaf node of theBinary Tree. Order of placement may be
any of Preorder, Inorder or Postorder as determined by either the
organization or the enrolling member's nearest ancestor.
The Profit Leg of the Binary Tree normally contains those new
members who are personally enrolled by the member.
Some members below any node on the tree are automatically
placed by a member's ancestor, while other subordinate members
are placed at a specific location in the tree by the member himself.
Compensation in a Binary plan is based upon a formula dependent
upon a certain value of sales in the Power Leg matching up with a
certain value of sales in the Profit Leg.
Often the stated appeal of a binary plan is that your downline or
legs grow through the recruiting efforts of those in your upline, your
ancestors, in addition to your own efforts and those of members in
your downline. In truth this benefit is slight because the new
members who are recruited by your ancestors are shared among
all the available leaf nodes. For example, your immediate ancestor
in the tree only puts half of his new recruits in your downline, on
average. Likewise, his ancestor only puts one fourth of his recruits
in your downline. Following this argument to the root of the tree,
the total approaches just one person recruiting for your downline
(1/2 + 1/4 + 1/8 + 1/16 + 1/32 + ... + 1/2n, where n is your tree
depth). This is often insignificant in comparison to the number of
people required in your downline to make yourself profitable.
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If you already have joined an MLM or still plan to


join an MLM...
If you're thinking about joining what appears to be a legitimate
multilevel marketing plan, take time to learn about the plan before
signing anything. Here's what you need to know... and remember,
you cannot trust the company's representatives to give you
accurate, honest nor objective information - you want information
from independent, objective sources:

1. What's the company's track record?


2. What products does it sell?
3. How does it back up claims it makes about its product?
4. Is the product competitively priced?
5. Is it likely to appeal to a large customer base?
6. What up-front investment do you have to make to join the
plan?
7. Are you committed to making a minimum level of sales each
month?
8. Will you be required to recruit new distributors to be
successful in the plan?

Beware if a distributor tells you that for the price of a "start-up kit"
of inventory and sales literature (and sometimes a commitment to
sell a specific amount of the product or service each month) you'll
be on the road to riches.

No matter how good a product and how solid a multilevel marketing


plan may be, expect to invest sweat equity as well as dollars for
your investment to pay off. There is no such thing as "passive
residual income" - that phrase alone is a tipoff to a scam!

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http://www.consumerfraudreporting.org/cfr.php?URL=http
%3A%2F%2Fwww.falseprofits.com/FSLegalityPg.html
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