Matrix Plan is also known as Forced Matrix Plan because it works on the principal of fixed width and depth in a structure. It looks like a ladder where recruits are arranged into fixed number of rows and columns that is why many people refer it as Ladder plan.
How Matrix plan works ?
The way matrix plan works is very simple and easy to understand. In Matrix plan there are fixed numbers of distributors allowed in each level based on the structure company choose to follow.
Let’s take an example of 3 x 6 matrix plan, which is shown in below table.
In this plan distributors are allowed to have only 3 distributors in their front line (level 1), from 2nd level onwards distributors are allowed to have 9, 27, 81 distributors on 2nd ,3rd and 4th levels respectively and so on, making total of 1,092 distributors in the network. This plan has limited width and unlimited depth, but distributors can earn commission up to fixed numbers of Level decided by the company.
There are different examples of matrix plan running in MLM industry based on combination of width and depth used in it. The popular ones are 2 x 12, 3 x 10, 4 x 7, and 5 x 10. Like binary plan, this plan also has an advantage of spillover, which provides distributors reasonably good earning possibilities.
Types of incomes in Matrix MLM Plan
Direct Sponsor Income
The Direct Sponsor income is also known as referral bonus.it is the benefit gained by a distributor for referring new distributors in his/her network. For example, company has decided to give distributors 7% of the direct sales they have made as a direct sponsor income.
Binary Matching Income
Binary matching income is also known as pair matching income. Distributors will earn either some percentage of matching sales volume on both sides or fixed amount on completion of a pair as binary matching income. For example, if distributor A has 400 PV on left side and 500 PV on right side, he/she will earn 10 % of 400 PV matching as binary matching income.
Sponsor Binary Income
Distributors will earn some percentage of binary matching income earned by their direct referral as a sponsor binary income. For example, company is giving its distributors 15% of their direct referral’s binary matching income as a sponsor binary income.
Rank based Royalty
Company puts aside some percentage of their turnover and distribute them equally among qualified rank holders based on their ranks. For example company is distributing 15% of their monthly turnover among silver rank holders. Now if company has 15 silver rank achievers this month so that 15% will be distributed equally among those silver rank holders. Every qualifier will get 1% of turnover as a royalty income.
When distributor achieves milestones set by company within a specific time period (fixed or variable), they will get additional incentives as rewards. For example, company is giving additional 3% sponsor binary income if distributors complete 70 pairs within 60 days from their joining.
Advantages of Binary MLM Plan
Unlimited Depth : Unlike Uni-level plan, here distributors can earn commission for unlimited depth by balancing sales volume on both sides.
Spill Over : Distributors will get help form their up-line for building a network.
There is an opportunity for fast paced growth in terms of money and network.
Distributors have only two legs which make it easy to pay attention to their team and manage their business.
It is easily presentable plan as compared to Generation Plan.
Disadvantages of Binary MLM Plan
The biggest flaw of this plan is company has to distribute commissions whenever there is a pair matching regardless of company’s turnover.
Due to capping, distributor cannot earn more than certain amount despite of having deeper network.
In this plan, income calculation is very speculative and complex which create high possibility of making losses for company.
This plan is not suitable for multiple products with different percentage of margins.