Trinary MLM Plan

Key Terms in Trinary MLM Plan

• Leg: A “leg” refers to each direct downline branch under a member. In a Trinary MLM, members can have up to three legs, representing the three people they personally recruit.
• Power Leg: A leg in your downline that generates a large volume of sales or recruits. Having a strong power leg is often a goal in many MLM plans as it provides a foundation for growth.
• Placement: The action of assigning recruits to specific spots in the downline. In a Trinary MLM plan, the placement can sometimes be strategic, as recruits are placed under existing team members by sponsors or uplines.
• Carry Forward: A member does not meet the required sales volume or other qualifications in a given period, their unfulfilled volume may be carried forward to the next period. This helps maintain momentum and allows members more time to achieve the necessary targets.
• Spillover: Spillover occurs when your upline places new recruits under you to help fill positions in your downline. This is a common feature in Trinary MLM systems, where it helps you grow your team more quickly, even if you didn’t personally recruit the new member.
• Capping: Capping refers to a limit set on the number of recruits or sales volume that a person can benefit from in a certain period. Once a member reaches their cap, they may stop earning additional commissions or rewards for further recruits or sales, encouraging a more balanced team development.
• Trinary Tree: The structure of the MLM system in a Trinary plan, where each participant can recruit up to three people, forming a branching tree-like structure. This tree visually represents the growth and depth of the network, with each level representing new downline members.
• Flushing: The process of resetting unused volume if it exceeds the capping limit or isn’t carried forward, depending on the plan’s rules.
• Trinary Cycle: A defined commission period or cycle during which sales volume and balance are calculated for payout.

How the Plan Works

In a Trinary MLM plan, each participant can recruit up to three direct downlines, creating a structure with three branches. This plan works by encouraging team building and rewarding members based on their own sales as well as the performance of their downline. Here’s how it works with an example

Step 1: Alice Joins the Plan

Alice joins the Trinary MLM plan and becomes a member. She is allowed to recruit up to three people directly under her. Alice recruits Bob, Charlie, and David to fill the three positions in her downline. These three people are now Alice’s direct recruits, forming the first level of her Trinary tree

Step 2: Bob, Charlie, and David Recruit

Each of Alice’s recruits (Bob, Charlie, and David) now has the opportunity to recruit their own downlines. For example:

• Bob recruits Eve and Frank.
• Charlie recruits Grace and Helen.
• David recruits Ivy and Jack.

Now, Bob, Charlie, and David have their own teams, each with two recruits, filling their second level in the Trinary tree under Alice.

Step 3: Spillover

As Alice’s upline (the person who recruited her) works to fill their own downline, they might place some of their recruits under Alice’s team. This is called spillover. For example, Alice’s upline could place a new recruit, Liam, under Bob, filling one of Bob’s spots. This helps Bob’s downline grow without him having to recruit that person himself.

How the Team Build in Binary

In a Trinary MLM plan, team building follows a structured approach that allows distributors to grow their networks through both personal recruitment and the support of their upline. Here’s how it works, specifically for the Trinary structure:

• Referring Your Own Users:As a distributor, you start by recruiting your own direct members, placing them in your Trinary tree. You can recruit up to three people, filling the three available positions under you. These are your personal recruits, and their sales volume will directly contribute to the performance of your network. If a position in your Trinary structure is already filled, the new recruit will spill over into an available position in your downline, helping to grow your network with minimal effort.

• Users You Referred Recruit New Users:After recruiting your initial three members, these individuals can also begin recruiting new members of their own. These recruits are placed under their respective positions, contributing to the growth of the network. In a Trinary system, the new recruits are assigned to open spots in the structure, filling the left, right, or center leg of each member’s downline. As your downline recruits new members, the network continues to expand, and you earn commissions based on the sales and placement of these new recruits, particularly when they are placed in the weaker leg of your structure.

•  Spillover Users:occurs when someone higher up in the network (your upline) has already filled all their positions in their Trinary tree and cannot place new recruits under themselves. When this happens, your upline places new recruits into the downline’s available positions. These spillover members are placed under your left, right, or center leg, depending on the next available spot in his structure. Even though these recruits are not directly referred by you, you still benefit from their sales volume. This helps create a more balanced structure for you and your downline.

How the Team Build in Binary

Here’s how the position of a new user can be decided in a Trinary MLM plan:

• Using a Holding Tank:When a new recruit joins the network, they may initially be placed in a holding tank. In this temporary position, the sponsor can evaluate the current structure of their Trinary tree and make a strategic decision about where to place the new recruit. The sponsor can manually assign the recruit to the next available spot in the left, right, or center leg of their downline. This allows the sponsor to strategically balance the network and ensure optimal growth. If the sponsor does not manually assign the position, the system will automatically place the new recruit in the next available spot within the Trinary structure.

• Setting a Default Option in Profile (Trinary Default Position):

  Sponsors can set a default position for new recruits within their profile, which determines where the system will automatically place them. The options for default placement might include:

  • Left: New recruits are automatically placed in the left leg.
  • Right: New recruits are automatically placed in the right leg.
  • Center: New recruits are placed in the center leg.
  • Balanced: The system automatically places recruits in the next available leg to help maintain balance across the structure.

  Once the sponsor sets their preferred default position, the system will use this option to place any new recruits accordingly. This provides a consistent andautomated way to manage team structure, reducing the need for manual intervention.

  These methods give sponsors the flexibility to either make strategic decisions about placement or rely on the system for automatic, consistent positioning of new recruits within the Trinary MLM plan.

Now, let’s consider how commissions work

Referral Bonus / Sponsor Bonus

In the MLM plan, Referral Commission is earned by a distributor when they personally refer or recruit new members into the network. The distributor earns a one-time commission based on the enrollment or purchase made by the new recruit. This type of commission rewards distributors for bringing in new customers or team members.

How it Works

• When a distributor recruits a new member, they earn a commission based on the new recruit’s enrollment fee, product purchase, or initial investment. This commission is often a percentage of the recruit’s first purchase or enrollment.
• Referral commissions are typically paid once, at the time of the new recruit’s sign-up or purchase.

Referral Commission Amount

• Referral Commissions can vary depending on the company’s compensation structure. They are usually a fixed percentage of the new recruit’s initial purchase amount or a flat fee.
• The amount may differ based on the product or service sold, the new recruit’s package, or other factors defined by the company.

Example

• Example 1: Alice recruits Bob, and Bob pays a $100 enrollment fee. Alice earns a Referral Commission of $20 (20% of Bob’s fee) as a reward for bringing him into the system.
•  Example 2: If Alice recruits Charlie, who buys a product worth $500, Alice might earn a Referral Commission of $50 (10% of Charlie’s product purchase).

Purpose

• Referral Commissions are designed to incentivize distributors to actively recruit new members into the network. This commission type rewards distributors for their efforts in expanding the network, which is the foundation of the MLM business model.
• These commissions encourage active recruitment and help distributors see immediate rewards from their recruiting efforts, motivating them to continue building their network and increasing their earning potential.

Trinary Commission

In a Trinary MLM Plan, commissions are calculated by comparing the sum of two legs with the third leg to determine the weakest pair. The goal is to maximize commission distribution while maintaining balance in the network.

How It Works

Step 1: Sum Two Legs and Compare with the Third

• We calculate all possible sums of two legs and compare them with the remaining leg.
• The leg with the smallest value in this comparison is considered the weaker leg for commission distribution.

Step 2: Choose the Best Pair for Maximum Commission

• The system identifies the pairing that allows for the highest payout.
• If the sum of two legs is greater than the third leg, the third leg is the weaker leg and will be used for commission calculation.
•  If the sum is less than the third leg, then the sum itself is the weaker leg.

Step 3: Calculate Commission

• The commission is 10% of the weaker leg in the chosen pair.
• Any remaining sales volume from the stronger leg is carried forward to the next payout cycle.

Finding the Weaker Leg – Step-by-Step Example

Alice has three direct downlines: Bob, Charlie, and David. Their sales volumes are:

• Bob generates $1,000
• Charlie generates $1,500
• David generates $2,000

Now, we calculate all possible sums of two legs and compare with the third:

Step 1: Compare Sums with the Remaining Leg

Bob + Charlie = 2,500 → Compare with David (2,000)

• • Since 2,000 is less than 2,500, David is the weaker leg.
  • Commission = 10% of $2,000 → $200

Charlie + David = 3,500 → Compare with Bob (1,000)

• • Since 1,000 is less than 3,500, Bob is the weaker leg.
  • Commission = 10% of $1,000 → $100

Bob + David = 3,000 → Compare with Charlie (1,500)

• • Since 1,500 is less than 3,000, Charlie is the weaker leg.
  • Commission = 10% of $1,500 → $150

Step 2: Choose the Best Pair for Maximum Earnings

• The highest possible commission is $200, achieved using Bob + Charlie as the pair, making David the weaker leg.
• Alice will receive $200, and any remaining sales volume will be carried forward.

Why This Method Works Best

• Ensures Maximum Earnings:The system calculates all possible pairings and selects the one with the highest possible payout.

• Prevents Wasted Sales Volume:By using the strongest pairing, the maximum possible commission is distributed while carrying forward any excess volume.

• Encourages Balanced Growth:Since commissions are always paid on the weaker leg, distributors must strengthen all three legs to maintain consistent earnings

Final Summary

• Sum each possible pair of two legs.
• Compare the sum with the third leg.
• The weaker leg is the lowest value in the comparison.
• The system selects the pairing that provides the highest payout.
• Commission is paid as 10% of the weaker leg in the chosen pair.
• Any remaining volume from the stronger leg is carried forward.

This method ensures fair and efficient commission distribution, maximizing earnings while keeping the Trinary MLM Plan sustainable.

Matching Bonus

How It Works

In a Trinary MLM Plan, the Matching Bonus is earned based on the trinary commissions earned by a distributor’s downline. The sponsor or upline distributor can receive a percentage of the trinary commissions earned by their direct recruits and, in some cases, even their indirect recruits, depending on the compensation plan.

When Alice’s direct recruits (Bob, Charlie, and David) earn trinary commissions from their network sales, Alice earns a Matching Bonus based on their commissions. The bonus is distributed through the sponsor-based tree, meaning it follows sponsor relationships, not the trinary structure.

Matching Bonus Amount

• The Matching Bonus is typically 5% to 20% of the trinary commissions earned by direct recruits and may extend to multiple levels of indirect recruits.
• Higher matching percentages are usually offered for direct recruits, while lower percentages may apply to deeper levels.

Example

Example 1: Direct Matching Bonus

• Alice recruits Bob, and Bob earns $200 in trinary commissions.
• Alice receives a Matching Bonus of 10%, which is $20 (10% of Bob’s trinary earnings).

Example 2: Indirect Matching Bonus

• Bob recruits David, and David earns $100 in trinary commissions.
• Alice earns a 5% Matching Bonus from David’s earnings, which is $5.

Purpose

The Matching Bonus motivates sponsors to support and mentor their downline, ensuring active network growth. Since uplines earn a percentage of their recruits’ trinary earnings, this encourages sponsors to:

• Help their team maximize earnings.
• Train and mentor their recruits.
• Foster teamwork and collaboration.

The Matching Bonus follows the sponsor tree, ensuring rewards are based on sponsorship relationships rather than the trinary leg structure. This makes the Trinary MLM Plan more sustainable by rewarding leaders who actively contribute to their network’s success.

Methods to Prevent Over Payment in Trinary MLM Plan

While the Trinary MLM Plan offers significant advantages, one challenge is that, once a network is built, inactive members might continue earning commissions. In a deep trinary tree, the company must compensate multiple users, increasing the risk of overpayment. To prevent this, the following strategies are commonly used:

Capping/Ceiling

Capping sets a limit on earnings to ensure distributors do not earn beyond a specific threshold. These limits can be:

• Daily, weekly, or monthly caps, ensuring controlled payouts.
• User-based caps, adjusted based on rank, membership level, or package type.
• Higher caps for top-ranking members, rewarding those with greater contributions.

For example, a distributor at a basic level may have a weekly earning cap of $500, while a higher-ranked distributor may have a $2,000 cap.

Minimum Activity Requirement

Even if a team is well-established, distributors must remain active to qualify for commissions. This can be ensured by:

• Requiring a minimum monthly purchase to stay eligible for earnings.
• Setting sales targets to prevent passive earnings without effort.

This ensures that only active participants continue earning, keeping the system fair and sustainable.

Minimum Direct Referral Requirement

Due to the spillover effect in trinary plans, members may receive new recruits automatically from their uplines. To prevent passive earnings without personal effort, a minimum number of direct recruits is required before earning commissions.

For example:

• A distributor must personally recruit at least three members before qualifying for commissions.
• Higher ranks may require more direct referrals to access greater earnings.

Flushing of Unused Volume

If commission volume exceeds the capping limit, the extra volume may be flushed (removed) at the end of the payout cycle. This prevents excess accumulation, ensuring balanced payouts.

By applying these strategies, Trinary MLM Plans remain financially sustainable, ensuring fair compensation while preventing overpayments.