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Somehow the name ‘Binary’ got attached to Balancing Binary Lateral (BBL) compensation programs. This is the "boomer" compensation plan of the 90’s superseding the Matrix of the 80’s. Many NetWorkers are still "getting a handle" on this latest compensation plan ("marketing plan" for old timers). The Balancing Binary Lateral (BBL) is being used successfully by several growing companies in the industry. Some of the companies currently using some variation of the BBL include Alliance USA, Aim America, Infinity2, Jewelway, and USANA. Gold Unlimited used the binary for explosive growth, but bit the bullet on the other compensation problems.

The new plan isn’t a Matrix as some "experts" have claimed. "WEBSTER’S II New Riverside Dictionary" defines MATRIX as: "A rectangular array of algebraic or numerical quantities treated as an algebraic entity." Current Matrix programs in Network Marketing fill the first open space in the rectangle (there are exceptions). Normally company computers automatically do the matrix filling --- left to right or vice versa in and orderly "marching" fashion. This continues until all the "holes" in the Matrix are filled. The Balancing Binary Lateral is different! There can be a lot of open "holes", there isn’t any free lunch!

To pay compensation, income from two different legs has to "balance" or "match". The Binary part of the name comes for a locus (point of convergence) of the compensation pay points. You have to have two matching income amounts (read this as legs) at one described lateral (read this as horizontal) point to get paid. Sounds simple, right? It is, except it requires work with downlines to keep the legs generating equal volumes of product sales.

The key is "equal volumes." You might have 2 people in one leg generating the same sales volume as 20 people do in the balancing leg! Working these programs requires some industry and thought! Normally there are two, four or even six starting points to sign up distributors in a Balancing Binary Lateral (BBL). Legs don’t have to run mathematically straight. They actually can curve to the right or the left (relative to income). Since most of the programs mentioned do not include automatic placement (if they did they would turn into a matrix) there is not control over the order of building legs, except by the brain of the sponsor.

There isn’t any "lottery effect" with a .BBL The tern "TANSTAAFL" (There Ain’t No Such Thing As A Free Lunch) applies to the BBL. It takes work to create a strong structure in these type of programs. The money game hypesters won’t get close to the BBL because it takes work! Old time MLMers may have a nervous breakdown from worrying about the vertical income streams and now adding Lateral (read horizontal) considerations. I have seen some young blood taking the shorts off some "big hitters" with the different focus on thinking!

If you’re a new comer to the Balancing Binary Lateral (BBL) and things have gotten hazy at this point, I don’t blame you! Let’s look at a GENERALIZED layout of the BBL programs (no specific company).

Step	Right Side	Left Side	Pays	Income Center amounts match a thousand dollars a piece Income Center 001 kicks out a cheque for $200.
1	$1000	$1000	$200	When legs A & B each match a $1000 a piece, Income
2	$2000	$2000	$200	Center 002 kicks out a cheque for $200. When legs C
3	$3000	$3000	$200	& D match at a $1000 a piece, Income Center 003 kicks out a cheque for $200. Each Income Center
4	$4000	$4000	$200	handles a total matching dollar value of $5000 (example .
5	$5000	$5000	$200	only, no specific company) that results in commissions of
Example Company B				$1000 plus bonuses. Multiply that times three Income
1	$700	$700	$300	Centers and you make $3000 plus bonuses
2	$1800	$1800	$300
3	$3300	$3300	$300	A) In this example at Step 5 you would receive a
4	$5200	$5200	$300	bonus of $200 if all steps were completed in one

week, then you would start over at step 1. You would receive a Re-entry Certificate if this is the first cycle through step 5.
B) In this example if you went through all four steps in one week, you would receive a Bonus of $300. You would receive a re-entry certificate the first time you went through all four steps.

If it is a weekly pay plan (as some companies are doing) this becomes a very powerful compensation plan! All levels participate in the probability of tapping the income stream. Several different levels use the same amount to calculate the volume for payout. How can this be you ask? The law of probability says that a number of people won’t match amounts and some won’t qualify to receive compensation. Odd dollar amounts say ($600) don’t get paid on until the next period when the leg accumulates $400 more to come out to an even $1000. Some companies in this industry set up certified pay out amounts relative to total sales volume of product. Some in the industry right now are running 45% payout based on product sales. Each week or month of payout the computer calculates how many matching $1000’s of pay outs there are. The computer then divides them into the total pool (40-50% of product sales) and that percentage goes per matching $1000’s to the distributors. In other programs a fixed percentage of payout is applied. In general the company using the certified percentage of payout pool tends to be on the "safe" side. Why? Distributors are not locked into thinking they are going to get a specified payout per matching $1000. Why? As distributors gain experience with the BBL the program "compresses" (phrase for manipulation to maximize payout). The company might have to pay out too much and actually go out of business.

The miracle of Re-entry Certificates! How do I keep going if my initial centers are maxed out as far as income? Most of the companies give maxed out distributors Re-entry Certificates. You
put your Re-entry Certificate in your downline and build under it. The re-entry certificates then generate money the same as one of the initial income centers. This provides for contact in your
downline and facilitates training for people far down in your organization. In general it is the best of all worlds in terms of compensation plans! It is like building wide and deep at the same time in a uni-level or breakaway with the exception that you keep running deep! Some companies have given re-entry certificates every time a center maxes out. Most companies have found this is impractical since it generates more re-entry certificates than distributors can put to good use. The standard seems to be one certificate per center when it maxes out. Some state regulators will look on this more favorably since the originator of the certificate will have to concentrate more on recruiting and training in specific downlines with a limited number of re-entry certificates. In the example below the company pays $200 every time there is an income match of $1000 at a given income center. In this example when that happens 5 times the income center generates a re-entry certificate. In the illustration on this page, the distributor places it in his shortest slow growing leg.

How does this apply to you? As usual, when looking at compensation plans you have to set up your own personal model of the plan. Don’t lie to yourself! Plug in how much product you can reasonably sell, how many distributors you can reasonably sign up, and then, how much product you think they can sell. Don’t forget how much it takes you to qualify each month. Figures don’t have to be accurate, gut feeling will work to give you a ball park figure. Then plug your "guesstimates" into the compensation plan. Sometimes this "scratch paper" exercise can be enlightening!

Illustration: The generation of a re-entry certificate and its strategic placement.

Remember the excess $600 left over after the payout in the last paragraph? In some plans this is saved for the distributor that does a certain dollar amount to remain qualified. The $600 is then paid on during the next pay period. This is a non flushing Balanced Binary Lateral (BBL). In other plans this amount is flushed back into the company coffers (a flushing BBL). In general one would think the program that flushes excess volume would pay out more. At this time that doesn’t seem to be true!

Rod Cook is the Investigative Editor of the MLM Insider, often called the watchdog of Network Marketing in the US. If you have information on companies in the U.S. you think deem worthy of investigation because of misdeeds, call him at (210) 646-9416. He is also a master of the binary compensation plan.