Comments on: The Binary Compensation Plan

By: narayan prasad

narayan prasad — Fri, 08 Feb 2008 16:36:31 +0000

my friend joined Chennai based mlm company called rmp infotec pvt ltd buying product of 6500 rupees.
he says, if i join and work just to recruit 2 members down line( in first level), and help to my new members to keep the chain grow, i will get ( weekly calculated) compensation of rs 1000 for a pair ( of left and right balanced )from my left and right side of new members we recruits for next 8 level and maximum 130000 rupees for week ( that means only 130 pairs are accountable if more pairs recruited)

i have few questions unanswered …
before that please read the facts & figures nobody wants to discus . ….if I am eligible to get compensation of 1000 rupees from pairs ( rs 500 from each member ?) of downline upto 8th level, then from my payment too rupees 500 has to be distributed all the upline sponsors upto 8 the level, so rs 4000 (500 x 8 = rs 4000) has been distributed to the upline sponsors. Then the company has its own bites too, business profit / share at least 20% ( minimum of rs 1000). It means company is investing only 1000 or 1500 on product of rs 6500 package.
1) if the products is worth of the payment we make( at the time of joining), then how can company able to pay the compensation upto 8th level (rs 4000 ) of the upline sponsors. ?
2) if it’s not true , the cost of the product package of rs 6500 is only rs 1000 or 1500, is it fair?
3) Achievers say, I made this much money , he made that much amount.. just by introducing members downline …is truly a money chain.

narayan prasad
mumbai

By: Shaikh Izaj Ahmed

Shaikh Izaj Ahmed — Thu, 01 Nov 2007 13:31:27 +0000

Only RMP Infotec Pvt Ltd will make you earn real money without hard efforts. Its a binary plan in india. By Just Purchasing a product which is also available in Market in the same rate will make you join. For Further Details Contact : +919343241417

By: Roger

Roger — Mon, 24 Sep 2007 18:24:53 +0000

Sorry rampagesr and Anthony, not all companies are overpriced as you describe. Ours sold their training products at the same price for 9 years before changing marketing plans to MLM. We’ve operated without a price increase for the last 2 yrs as an MLM. Product prices are roughly 1/2 to 1/3 what you would pay elsewhere. We have no product purchases to make each month either though we do have a fee every month. Of course every franchised restaurant or business out there has a fee of some kind.

By: Anthony

Anthony — Wed, 14 Feb 2007 01:25:02 +0000

In responce to rampagesr, guess what? The failure rate is about the same for traditional new start up businesses too. The difference is it can cost thousands, your home, your livelyhood and your marriage if you try ‘traditional’ business and fail.
I agree about the high product prices though…

By: rampagesr

rampagesr — Thu, 21 Dec 2006 16:20:49 +0000

A great website that shows the mathematics of a binary compensation plan is at www.geocities.com/mlmpyramid Products sold in Multilevel Marketing companies are overpriced at the distributor's cost. That is so the company makes their great profit and pays for the distributor's commissions and bonuses. The only customers are the distributors themselves and a couple preferred customers. Preferred customers pay the same price as the distributors do for the products, which causes the wholesale price with the autoship discounts to be the retail price. This causes INVENTORY LOADING. Distributors are forced to make purchases during a 4-week cycle to qualify for commission checks. This is the PAY TO PLAY scheme. Most distributors never sell the product so they use it themselves, store it in the garage, throw the products away, or dump them on EBAY half the price they paid for it to narrow their loses. MLM companies only focus on recruiting. Most all business literature for the distributors is about recruiting a downline. If you have to recruit a downline to succeed in the business, then it is a pyramid scheme. Most of the distributors lose money and never make a profit. 99% of people who join MLM companies never see a profit. This is hardly am ethical business for anyone to consider. If you are a good liar and have no ethics, then MLM business is for you. GOOD LUCK RECRUITING!

By: Jean

Jean — Thu, 21 Dec 2006 14:58:38 +0000

New to this blog, I am commenting on Dan Cardillo’s remarks. I believe 2 wide makes more sense and I also have experienced why. People have a vested interested more often than not, with downline being placed under them, and also, I have re-entered in my group and some of my downline have become my upline and are happy I did re-enter. Becuase the each business is capped, in order to capture more volume, re-entry is available and since there are no breakaways, you are secure in helping downline succeed.
Jean

By: Dan Cardillo

Dan Cardillo — Thu, 07 Dec 2006 17:37:30 +0000

We were going to change our comp plan from a 5 wide by 7 deep to 2 wide 16 to 20 down. We are thinking of paying in tiers especially on the residual. Are backbone is eBay. After reading these posts I think the way to go is the 2 wide. Thanks

By: Ben

Ben — Tue, 28 Nov 2006 02:19:12 +0000

Hey Roger, Great info about M2global. I've tried Herbalife and Mannatech. Currently with Mannatec - for the past 13 months. Also found that people find Mannatech Glyconutrients too expensive. Tell me how can one join M2Cglobal. They name suggests that's it's international. Could you email me details about M2Cglobal. You never know you may have found yourself a recruit.

By: Roger A Stockburger

Roger A Stockburger — Sun, 09 Jul 2006 19:16:49 +0000

I could not get past the 15% level with Amway, and Mannatech systems did not correspond with the flipchart – potential annual income $aud 15′000 – national distributor, 30+30 people each purchasing 100PPV from product sales, I had 42+36 people, average 125PPV and all I was earning was about $70 per month in addition to the sign-up bonuses ($240 for an all-star recruit ($1375), or $70 for a master recruitment ($510).

USANA has a good system, although most find the products too expensive, as with Mannatech’s glyconutrients.

Wish they could make their products more affordable to most people.

Then a company called M2Cglobal started up. For the first time I could put in effort and see money come in that matched what the documentation said you would earn. Simple, no smoke and mirrors. Made more in 3 months than in mannatech in 18 months

M2Cglobal for example has a binary system that pays to infinite depth and the commission stays the same. A maximum payout cap of $usd52′000 per week and a max. of 60% of commissionable sales volume is paid out to distributors.
The product is an energy nutrition drink that contains no stimulants, quite easy to sell/promote, a $usd39.50 purchase, 30 servings (sachets) generates 25BV. Each time there’s 240 BV on each of the 2 sides, a $us50 cycle is generated (equals 10% commission).

By: Ty

Ty — Thu, 25 May 2006 23:24:36 +0000

Usually a company determines the cycle bonus by their own set percentages devoted to the bonus.

Let’s say that a company devotes x % to the cycle bonus. They then divide that amount by the number of cycles and presto…you have your cycle bonus $ amount. Since they use a % of sales, the cycle amount can stay fairly constant.