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Binary Multi Level Marketing - The Good, Bad and The Ugly

I remember when the binary compensation plan was first introduced to the network marketing community. This was back in the 1980's and caught a lot of attention back then as it does today. This was before the Internet and companies were still easily able to fill hotel rooms with 300 people in any given city. The binary was a new concept and at that time most people did not understand it. I immediately recognized and opportunity and ceased the moment, mind you, not from joining the company using this plan but by printing a booklet that explained it. Within a week I was standing in the back of these hotel meetings selling these booklets for one dollar each and yes, I sold a lot!

The binary over the years has become even more popular, especially after the Internet where compensation software was no longer needed at the company office. Instead it ran from a server where instant tracking was made available.

Just what is a binary compensation plan? Wikipedia defines it as an organizational plan using a right and left leg structure. One is defined as the "Power Leg" and the other is called the "Profit Leg" The Power Leg structure has automatic placement of new members, even by members previously enrolled, or ancestors, to the current member. This causes what is typically known as a "run-away leg" where hundreds and eventfully thousands end up under an enrollee. This can cause a lot of excitement for the newbie who has no understanding about a binary compensation plan.

The enrollee is told that in order to profit from this growing organization that they have to personally recruit/sponsor one person in his Power Leg and recruit/sponsor another person in their Pay Leg. The enrollee is told that as the person they introduced into their Pay Leg goes out and get's their two people and they each get their two people the Pay Leg grows. That is when they start earning money in the binary compensation plan! Why? Because as their Pay Leg grows it begins to match the growth in that is already taking place in the other Power Leg. This matching volume is calculated typically on a one thirds, two thirds basis, meaning you get paid a specific amount every time you generate thirty percent volume on your Pay Leg as long as you have at least sixty percent volume in your Power Leg.

The bad part of a binary compensation plan. When a person is sponsored and not place in the Power Leg but instead gets stuck in a Pay Leg that is not growing. This happens because your sponsor is not a strong producer who can help build that weaker leg to help create momentum and eventually turn it into another growing Power Leg. The truth is that most people are not able to duplicate themselves and sponsor their two people. How do you turn a Pay Leg into a thriving growing Power Leg? Typically it takes thirty five personally sponsored people in order to create any kind of growing momentum. The obvious reason is because you are looking for a person who will duplicate themselves.

The ugly part of a binary compensation plan. Most are attracted into a binary compensation plan because of the promise of fast growth from spill over. Spill over is the growth that takes place from your up line. This of course creates a lot of excitement. Again the problem is that most are not able to get their two people. You might be a person who has no problems or issues of recruiting two people but you need to keep in mind that others typically are not able to accomplish this.

The question may be, then how are some companies using a binary compensation plan able to succeed. There seems to always be a Power Leg that is growing, right? Companies initially before they launch to the public they do a lot of recruiting for what are called "heavy hitters". These are individuals who have a lot of influence and are willing to bring their core teams into the mix. Companies often pay these people on the side for doing this, sometimes as much as $10,000 a month. This initial activity creates a lot of excitement that seems to work at least in the short run but eventually loses steam.

My suggestion is to stay away from the binary compensation plan. You are better off in a hybrid Unilevel plan with matching commissions that offers good up front commissions as well as a long term residual income on the back end.

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Article Source: [http://EzineArticles.com/?Binary-Multi-Level-Marketing---The-Good,-Bad-and-The-Ugly&id=5253398] Binary Multi Level Marketing - The Good, Bad and The Ugly

3 Gotchas of MLM Compensation Plans

MLM Compensation Plans Gotcha Number 1: Having unrealistic hoops that everyone has to jump through to earn residual income.

Last year I was flown out to the corporate facility of a company touting themselves to be the best MLM company and it only took me about 5 minutes to determine quite the opposite. Of all the MLM compensation plans I have seen, theirs is probably the hardest to get the average person making money residually. Their upfront bonus was not bad but their residual income model had you requiring 90 people on two different legs before you got one dime of residual income. How many average people do you think could place 90 people on even one leg? To have a residual income model that will not pay you a dime until you hit an extraordinary amount of people just doesn't make sense to me.

MLM Compensation Plans Gotcha Number 2: The balancing game.

Now, this one is so prevalent but is just not a practice that I think is fair or the average person or, even the high performer. Let me tell you a quick story. I was in a company that had a binary model that did what every other binary model does and that is they pay you off your lesser leg. The other thing they do is they ratchet what bonuses you get based on your rank, which, is also based off your lesser leg. Well, I built both of my legs and had some amazing producers in one leg while the other leg floundered. In fact, I had a guy that I personally sponsored on my big leg that went on to make almost $400,000 that year but because he was in my big leg, I didn't make anything off of him. Lets review that story one more time. I introduced someone to a company, that might not have been introduced otherwise, he made $400,000, which, in most companies would mean the company made at least $800,000 and I did not make a dime. Is that fair? Beware of the balancing game.

MLM Compensation Plans Gotcha Number 3: The sacrifice to the sponsor gods.

There are many MLM business opportunities that have a model that takes your first 2, 3 or even 12 people and ALL of their bonuses go to the person that enrolled them as a sponsor, instead of the actual sponsor. The worst part of these types of MLM compensation plans is a lot of times the person bringing people into the business, don't explain this part so the new person gets their best people in first, much to their demise and much to the liking of the upline. Now, there are some newer MLM compensation plans that have recapture bonuses but the best thing to do in this type of scenario is to understand the compensation plan before you start recruiting. Of the three, I would say this is the least gotcha but it is still a gotcha.

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Article Source: [http://EzineArticles.com/?3-Gotchas-of-MLM-Compensation-Plans&id=4210579] 3 Gotchas of MLM Compensation Plans

MLM Compensation Plans - An Overview

There are thousands of old and new mlm companies and each one claims to have the most lucrative mlm compensation plans anywhere. In reality there are only a few basic plans.

What are the differences? Let's look.

Almost every network marketing opportunity out there has some sort of bonus plan to reward their distributors for recruiting however we are going to concentrate on the basic systems.

The basic mlm compensation plans we are going to explore are the matrix, the unilevel, the binary, and the stairstep breakaway.

The matrix plan limits the width you can sponsor on your first line. It is typical to limit these to three and sometimes two people before you are required to begin your second level. Now, if you have sponsored say 3 on your first line, each of those can sponsor 3, so on your second line you can have a total of 9 people. The third line would therefore have 27 people and so on.

Matrix mlm compensation plans also limit the depth that a person can build under them. You might see 5, 7 or most common 9 levels down. What happens once you reach the bottom level? Most companies then provide you with a re-entry. In other words, they allow you to re-enter somewhere in your downline and start all over again.

Something to watch out for with matrix plans is gaps. These occur when distributors quit. Make sure the plan you are considering has some sort of compression, where the next level down from the one who left moves up into the empty position so you are still paid for each level.

The one big advantage of matrix plans is the spill over from your upline as they fill up their various levels and you end up with free people spilling into your downline.

The unilevel plan does not limit how many you can put onto your front line; you could put a thousand there. These plans do limit the depth they will pay you down to, usually depending how many you have personally sponsored.

There is no natural spill over created as in the matrix plan. The nice thing is that as you build wide, your recruits will build down and you could have a very large organization without having to re-enter and start over. The payout occurs at each level, which pays you a certain percentage for the sales volume created from the distributors at that level. This feature is similar to the matrix plan.

The binary plan resembles the matrix compensation plan. In this scenario, you are limited to two on your front line, who can then get two each, who can get two each and so on.

Each frontline person becomes a leg and your downline is created under each one. They are often referred to as your left and right legs or business centers.

The payout happens when you have some sort of volume under each leg and they somehow match each other either exactly in volume or by some percentage. Each company has their own method of determining this.

At some point they may limit the depth or volume they will pay out under each leg and a re-entry is then used. This system again benefits from spill over from your upline.

The stairstep breakaway is the oldest mlm compensation plan in use. This is the plan still used by many of those companies who pioneered the industry and are still out there today.

In this system, you can build as wide as you want and as deep as you want but as each leg underneath you reach a certain level or volume, they then break away from you and deal directly with the company.

You are rewarded by earning a percentage based on volume for that leg forever. Of course, as you are building each leg, you are paid a percentage, again based on volume, usually on your entire organization.

Billions of dollars have been earned on the old stairstep breakaway.

Companies may try to sell you on their mlm pay plan alone. You must also take into account many other factors such as product, upline support, company reputation and marketing system before you make your choice of company. It pays to investigate well.

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Article Source: [http://EzineArticles.com/?MLM-Compensation-Plans---An-Overview&id=3546100] MLM Compensation Plans - An Overview

Binary Compensation Plan - Understanding You Binary Compensation Plan So You Don't Lose Money!

To most network marketers, the compensation plan is the driving force in their lives. Based upon your knowledge, or lack of knowledge of your company's rules and regulations, you could actually LOSE money as you add people into your downline. Let's look at the basics of the Binary Plan, so you can maximize your income based upon your efforts, as you build you MLM business.

Basic Concept:

In network marketing there are 4 major compensation plans; Stairstep, Unilevel, Matrix and Binary. The Binary Plan is actually the easiest to understand, and widely accepted as the most profitable for the marketer. It is based on the principle of 2. You have 2 groups of people called "legs". As you bring people into your business, you place them in either your left leg or your right leg. The length of each leg is usually unlimited.

The Power Leg:

Your legs are given names, as each plays in important role in your business. Your "outside" leg is your power leg. It Is this leg where you were added by you sponsor, and your upline will also be adding people, as they too are building 2 legs just like you. Many marketers find this leg grows faster, and is more powerful. Thus it is given the name "power leg".

The Money Leg:

You inside leg is this leg you are 100% responsible for growing. With most plans you get a bonus for adding a group of people, and they need to be balanced on both sides. As your upline is helping you build your power leg, it is this leg where, as you start to add on people, you start making money. Thus it is given the name "money leg".

Pitfalls of Placement:

You must absolutely read and understand the terms and conditions of you compensation plans completely, especially the Binary Plan. You need to understand how many people you personally need to add to your legs for those extra bonuses. Many comp plans will pay commission on the shorter of the 2 legs, so balance here is most important. Also watch out for those company specials where the terms and conditions specify how you need to build you team during this time.

In Conclusion:

The Binary Plan is simple and effective, but you need to understand the rules completely. Too many marketers have, and the end of a month, have placed one wrong person in the wrong leg, and left thousands of dollars sitting on the table because of it. A little knowledge on your part can avoid this error.

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Article Source: [http://EzineArticles.com/?Binary-Compensation-Plan---Understanding-You-Binary...!&id=4082606] Binary Compensation Plan - Understanding You Binary Compensation Plan So You Don't Lose Money!

Are Numis Network Complaints About Their Compensation Plan Valid?

Network marketing companies are constantly striving to come up with a great compensation plan that is not only lucrative for them but also for their distributors. I am going to talk about the binary compensation plan and why there are so many distributors that complain about its flaws despite the fact that it is one of best in the industry given the fact that you can benefit from all the commission volume that your upline spills into your downline legs. But there is a catch.

It is the spillover into your weaker leg that gets credited. The biggest complaints about the flaws in binary plans that has not been resolved in most network marketing companies is that the distributor does not get compensated on the stronger leg. Would you be excited if I revealed that Numis Network is the first network marketing company that finally addresses this issue concerning many binary plan enthusiasts?

What Are The Biggest Complaints About Binary Plans In General - And How Does It Hurt The Distributors?

The problem with binary plans is that you are only compensated on your weaker leg. Most people arguing against this principle think it is fair to get compensated on the weaker leg because they believe that spillover should only occur in the leg that is productive. In other words, why spill people in a leg in which distributors are accused of being lazy and not doing anything?

How You Can Lose Big Time If You Personally Enrolled A Recruiting Superstar Into Your Typical Binary Plan?

In a binary plan, you have to place one person on your left and one on your right. Then you have to balance out the legs by putting emphasis on building the weaker leg. This is where it becomes a big problem. And this has been happening to a lot of big time MLM recruiters who are losing out on tens of thousands dollars in commission volume just because of this flaw.

Let's say you place Steve on your right leg and Johnny on your left leg. As it turns out, your left leg is weaker than your right leg. So you build on Johnny's left leg. Why? Because your commission is based on the volume of your weaker leg.

But Then The Unexpected Happens..

Johnny's left leg suddenly starts to explode out of control, surpassing your left leg. Now you immediately switch over to building your right leg by placing people under Steve. But no matter how hard you try, there is no way you can catch up with Johnny's left leg. This is where a lot of top producing distributors get incredibly frustrated. And I truly believe that they have a right to be. Just think about this for moment.

In this example, you are the one who personally enrolled Johnny into the business. Johnny is the recruiting superstar because of your recruiting efforts. I find it incredibly unfair if you cannot get paid on his efforts. And what is frustrating is that your MLM company keeps all the profits on the stronger leg that you cannot claim. Now how unethical is this?

Numis Network Is The First Company That Has The Courage To Solve The Biggest Problem With Binary Plans That Most MLM Companies Are Not Willing To Do

If you were in another MLM company's binary plan, you would not get compensated on Johnny's runaway leg that was once weak, then suddenly became strong. Would you like to know how does Numis Network compensate you in this scenario?

In this scenario, Numis Network will pay you a bonus for every distributor that is placed beyond the point of your stronger leg. For example, let's say (using the above example) your right leg has 10 people and your left leg has 5 people. Then, thanks to Johnny, your left leg starts to explode and now has 20 people. Unfortunately your right leg's volume stayed the same at 10 people. Since the difference between your strong and weaker leg is 10 people, Numis would pay you on that difference in the form of a coded bonus.

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Article Source: [http://EzineArticles.com/?Are-Numis-Network-Complaints-About-Their-Compensati...?&id=3992312] Are Numis Network Complaints About Their Compensation Plan Valid?

Make Money With Your MLM Business Today

Make Money with your MLM today. You start the process of making money by doing product research and using your own products all the time. How can you promote your products if you don't use them and truly believe in them. Have them with you at all times, use them as often as possible and become a WALKING BILLBOARD for yours products!

Market and sell some of your items as often as possible. Many successful entrepreneurs never spend their own money on business expenses. They use other people money. HOW? They offer and sell their product. This covers any business expenses AND puts IMMEDIATE profit into their pockets every month. This will also keep you "in the black" as you build your teams. The other benefit of being immediately successful is showing others how they can also operate their business with immediate profits.

Find other "Success-Minded" people who are looking to make a lifestyle change like yourself. The key is to ask EVERYONE the question. Don't take it personal if they say no. They are not saying no to you, they are saying no to the opportunity. PLUS if they say no to the opportunity they will MOST LIKELY purchase your product. It's a WIN/WIN. Offer, Offer, Offer.

Build your teams with integrity and a helpful heart. If you put others first, you will be very successful!. by offering help to your new recruits and be consistent. Do what you say Always be available for help and support to your downline.

Build your teams with integrity and a helpful heart. If you put others first, you will be very successful. Remember that while in MLM, the key is to help a lot of people make a lot of money. You only make money by helping them achieve their financial goals. HOW AWESOME IS THAT!!

Go DEEP first. Keep driving your first leg down deep. Put new recruits down your first leg and tell others to do the same. This will motivate your team 10 fold. Then after your leg is 20-50 deep start another leg and teach every member in your team to do the same.

Recap on the keys to your success: Use your products always and keep samples with you always, offer the opportunity to everyone, then offer the product, retail to people to be profitable in your first month, Build your business with integrity and with a helpful heart, and drive your legs deep before you go wide. Follow these steps and you will get rich...with great friends, warm moments, and a beautiful residual monthly income!

* Persevere
* These are not get rich quick schemes, they require effort and lots of courage
* Most Reputable MLM's are not pyramid schemes, they are actual businesses with a success building
business model

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Article Source: [http://EzineArticles.com/?Make-Money-With-Your-MLM-Business-Today&id=3984123] Make Money With Your MLM Business Today

WNP Freedom Network Residual Income System Exposed! How Does This Work?

WeNetProfits has now explored a whole new concept of Network & Internet Marketing for Everyone Included! The brand new Freedom Network Residual Program is something that has never been done in MLM before! The way it works is residual straight line commission for everyone! I mean regardless if you sponsored anyone or made a sale! WNP is about People Helping People to a Better Quality of Life!

Silver Freedom Network: How does it work?

Very Simple! This is a 4x4 matrix introduced as 4 legs.

What is a 4x4 Matrix?

A 4x4 Matrix is your position at the top:

- 4 positions below you for level 1,
- 4 positions below each of those 4 for level 2, total positions now 20.
- 4 positions below each of those 16, adding another 64,
- 4 positions below those 64, adding another 256 for a total of 340 positions.
- With 4 across below you and 4 levels deep.

Total affiliate in a 4X4 is 340.

This is done by the efforts of members above, beneath and from your efforts.

A 4x4 Matrix is filled from left to right, top to bottom:

- There are 4 legs, 85 members in each leg
- Now as the 4x4 fills up, the software will concentrate only on 1 leg at a time.
- This is how the first leg fills; the software will take the people in the 2nd leg, 3rd leg and 4th leg and automatically fill your 1st leg.

How the legs fill.

It will start with the 1st leg, then the 2nd leg. Remember it only take 85 members to complete a leg.
These members come from above, below and your efforts.

Now 3 Things Happen:

1 - Your Leg fills up extremely Fast
2 - Massive spill over for your organization
3 - From now on we get paid on 2 legs only!

1st leg, with only 85 members, you can receive up to $1,380 with no sponsoring required to get paid if volume is generated to your compensation structure by your team efforts.

New Position; when you have earned above $469.90. All affiliates receive a new position deducted from earnings. This will only happen on the 1st leg that you fill.

This new position will fall in under your existing position to increase your potential to $5,520 in the Silver Residual.

Your 2nd leg, with only 85 members, you receive another $1,380. Total between both legs $2760 Now that we've Shown You the Money on the 1st leg, Qualifications for the 2nd leg is; 1 direct referral...Even if it means that you pay-it-forward.

Referral Bonuses stay the same! $5 per referral per month.

For a low cost of $69.90... Remember when we say $69.90 per month, the software automatically takes the 69.90 off your earnings if you have earned above $69.90....We do not and are not allowed to take it off your credit card. You renew to keep your spot; it's of your own free will.

Now why would we go ahead and say NO SPONSORING REQUIRED

We have 4 legs right....85 affiliates in each and we get paid on the 1st 2 legs. The other 2 legs equal 170 affiliates and are funneled into the two legs you are getting paid on. Creating FAST filling legs and massive spill over results! This has never been done in the Network Industry before!

Members that were in the Silver FN From the 15th of February to the 7th of March Midnight...do not lose their positions and do not have to renew before the 1st of April.

- New cut-off date: 25th of every month
- New payroll date: 28th of every month
- New FN software starting March 8/03/10
- We will be compressing FN genealogy the 7th of March at 12:00 am EST.
- Gold and Platinum will only start April first....Full details 1st day of spring.

Gold and Platinum Freedom Network Residual - Gold and Platinum will only start April 1st. Silver, Gold and Platinum are all part of the Freedom Network Residual System.

Gold Freedom Network Residual - You want to proceed to the Gold Freedom Network Residual, you must upgrade from your back office earnings. Cost to upgrade to the Gold Residual is $300.

Qualifications:

- Must be a Gold Retail License Holder
- Must have minimum earnings of $1,300 in the Silver Freedom Network Residual.
- $300 monthly will be deducted from residual earnings once you activate your Gold FN Residual System.
- Must have 4 direct referrals or more in the Silver Freedom Network.

Platinum Freedom Network Residual:

- To proceed to the Platinum Freedom Network Residual, you must upgrade from your back office earnings. Cost to upgrade to the Platinum Freedom Network Residual is $1,600.
- $1,600 monthly will be deducted from residual earnings once you activate your Platinum FN Residual.

Qualifications: - Must be a Platinum Retail License Holder:

- Must be an affiliate in Gold Freedom Network Residual.
- Must maintain 4 direct referrals or more in the Silver Freedom Network Residual.

This Program is brand new and obviously the earlier the better! This Program is one of the best residual compensation plans I have ever seen. Once you have registered, WNP also sets you up with your own website and referral link. You can now direct people to your site to explore and since your referral link is unique to your account you will get credit for anyone who signs up. They even provide you with the materials needed to help you market. Referrals can even be sent to other people in your downline as a way to help them out. You might assume with any home based business you would have tons of products in your house, but not with Wenetprofits. Their fully automated system takes care of everything online for you, especially all the products and services for their members.

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The Author of this article Matthew Gruenke is a Success Coach & Top Internet Marketing Mentor and Leader in the Home Based Business Industry, who works with other Top Industry Leaders around the world to help others achieve success and wealth through Internet Marketing. I have a passion for helping others achieve their goals, dreams and freedom!

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~God Bless you and Your Family~

Article Source: [http://EzineArticles.com/?WNP-Freedom-Network-Residual-Income-System-Exposed!-How-Does-This-Work?&id=3940249] WNP Freedom Network Residual Income System Exposed! How Does This Work?

5 Advantages of a Binary Compensation Plan

Network marketing or multilevel marketing is a popular platform for doing business today. Many network companies exist, and each one offers a wide array of products and services to offer prospective home-based entrepreneurs. While each network marketer knows that it takes a lot of hard work and determination to succeed, the trick is finding an MLM company that pays the best. Paying the best also means that the company may have a feasible compensation plan in place. However, most MLM distributors and affiliates are sometimes duped into believing that a certain compensation plan will make them lots of money. So how hard will you have to work for your money?

What are the common MLM compensation plans?

In multilevel marketing, there are basically 4 major types of compensation plans. These are the Stairstep, Unilevel, Matrix and Binary plans. First let's discuss how a binary compensation plan works. A Binary plan is a pay structure that's based on the number two. Each level of your network marketing organization is composed of two people. This means that once you sponsor two people to your MLM business organization, you already have filled your front line, and have set up yourself to create viral growth that's very much typical with these types of compensation structures. There are 5 advantages that distinguish the binary compensation plan from other MLM compensation models.

1. You Actually Profit From the success of your up-line

With a binary compensation model, your up-line or (the person that sponsor you into the business) will actually benefit from your success, since the binary system makes your up-line place new members under you. This is called the spillover, and can truly change the amount of residual income you get, regardless of your level of success, or how you mentor other people in your MLM organization.

2. It offers a "Two to Infinity" Payout

Because this system enables your MLM business organization to grow two fold, it swill offer what is referred to as the "two to infinity" payout. So, regardless of whether how deep you install new members into your down-line, it's most likely that you'll make the same amount of compensation or commissions, from other people's sales and referrals. The binary plan is often viewed to offer the best benefit of all, as compared to other comp schemes.

3. A Binary compensation plan works best in fostering teamwork
According to veteran MLM distributors, the binary plan is often viewed as a structure that best promotes teamwork, both for the up-line and down-line. With this model, you'll still benefit even if you think that your sponsor is "stealing" a new recruit from you, because the system automatically places a new member beneath you, so you don't have to worry that you're being ripped off by your main sponsor.

4. Your up-line usually helps you build one side of the leg

Often times, in a binary system, your up-line will most usually help you build the other leg, while he guides you into building the other leg. The binary system is advantageous because half of your compensation can be made or developed by another entity, which may usually be more experienced than you. Therefore, all you need is to just build your side of the leg, and you collect double compensation after. The binary system is often referred to as a robust synergy-based system, where your up-line is able to directly contribute to your overall efforts.

5. You dictate how many down-lines are placed on each of the two legs

Depending on how your MLM Company interprets the binary compensation system, with this model it's most likely that you can actually dictate how many members will be placed in each of the two legs. Here's an example: If an MLM program states that you need to sponsor one member into your left leg, and one member in the right leg, to allow you to qualify for commission. So your mission would be to sponsor two members, one in your original leg and the other in the new leg. In the end, you will be paid royalty or group commissions based on "groups" of members.

In a binary compensation model, all members will benefit from all new members that are sponsored by their up-line in the same leg. And apart from getting group commissions depending on the network marketing program you join, you'll also be able to get extra bonuses from each individual that you personally sponsor.

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Article Source: [http://EzineArticles.com/?5-Advantages-of-a-Binary-Compensation-Plan&id=3948351] 5 Advantages of a Binary Compensation Plan