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Understanding the Binary Recruiting System

Updated on December 21, 2013

Is It a Scam?

A simple answer is no. The binary recruiting system itself isn’t a scam. But yes, scammers can and do use the system for such purpose.


This hub is to explain the basics of the binary recruiting system, a system often used by companies that offer commissions to its existing customers (or marketers) for recruiting new customers (or marketers who will).

And yes, this system is used by network marketing (MLM) companies, so read to avoid scams and to be able to pick out the real deals.

General Terms

Before we continue, here are some terms that are often used when explaining any recruiting system structure.

  • Sponsor (Up-Line) – A person who recruits new customers (members) for a company. If James recruited you, he is your sponsor, or up-line.
  • Down-line – A person recruited by a sponsor. If you recruited Tom, he is your down-line.
  • 1st Level Down-line – Down-lines you’ve recruited.
  • 2nd Level Down-line – Down-lines your 1st level down-lines have recruited.

What Is It?

Basically, it is a structure that allows each sponsor a maximum of two 1st level down-lines, resulting in a structure like the one on the right. Usually, the down-line (and his down-lines) on your left side is called your left leg, and the down-line (and his down-lines) on your right side is called your right leg

What Is the Benefit of the Binary Recruiting System?

Recruiting system like this can be used by scamming multi-leveling marketing (MLM) companies. But the binary system is also used by a number of legit network marketing companies because it has features to prevent the ones on the higher levels from profiting without doing any work. Let me explain.

First, a sponsor can only have two 1st level down-lines. So if he doesn’t help those down-lines to recruit others, he will only have 2 down-lines. And if it is a legit networking marketing company, he’s most likely to make no money unless those two down-lines spend millions on the company’s products. So if you’re in binary system, your up-lines (and your up-lines up-lines) will most likely to help you to succeed.

Second, with binary system, your sponsors don’t always make more money than you, and this is always true for any legit network marketing companies that use the binary system. This is a very good news because who would want to work to many someone else rich?

For most legit network marketing companies, your two legs have to have similar performance to get paid well. Let me explain. If your left leg had 400 sales, and your right leg only had 100 sales, you are most likely to get commissioned based on the 100 sales of your right leg. But if you were the guy on the left leg, and your left and right legs both had 200 sales (total of 400 sales), your commission is based on the 200 sales, more than the commission of your sponsor. Make sense?


This hub sums up the very basic facts about the binary recruiting system. Companies can have different policies to make the system either a scam or a profitable opportunity.

If you have any questions regarding the topic of this hub, feel free to leave me a comment!


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