Marketing Industry Terminology Glossary
Like any other industry the mlm industry has it's
own set of industry terminology. If you're getting
started in mlm it's good to know some or all of
these terms, so that way you'll advance your mlm
career and be more professional when speaking with
mlm prospects or with others in the industry.
The status that tells a mlmer that a downline member
is still involved and working on their business
and building their downline.
Ranked one of the world's largest and oldest network
marketing companies that helped to launch the industry.
Ranked one of the world's largest network marketing
companies famous for their health and beauty products.
Level: A rank or title that is achieved
by moving a certain amount of product per month
and / or recruiting a certain number of distributors
who themselves have attained a certain designated
Program: An Internet business, that has
a program that's has elements of the network marketing
industry but is designed for website owners; that
allows people to become affiliates simply by providing
a link on their Web sites to a corporate home page,
and pays affiliates a commission on all sales made
through that link.
Downline Building: Anything that allows you
to build your mlm downline, advertise or grow you
mlm downline on autopilot. Here's an example of
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A program designed by the mlm corporation to
ensure that a selection of products of your choice
is automatically shipped to you each month without
you having to reorder every month.
A Web site or a service such as Aweber.com that
e-mails information automatically to anyone who
clicks on the responder.
A type of compensation plan that limits your frontline
to two people and pays out weekly on one of the
two legs of your organization.
Sales volume generated by you or your downline
for which you receive no compensation.
An abbreviation for stairstep / breakaway, one of
the four major types of compensation plan. It can
also refer to a distributor in your downline who
has met certain minimum monthly qualifications and
has consequently broken away from your group.
Leg: The organization or downline of a
Pool: A special fund set aside by a network
marketing or mlm company, from its profits, and
distributed as a special incentive to qualified
Volume: See BV.
Builder: A distributor who is actively
prospecting and gathering customers, as opposed
to one who is simply buying product at wholesale
for personal use.
Policy: The money-back guarantee offered
by all reputable MLM companies to distributors.
Generally, companies will pay 70 to 100 percent
of the wholesale price on any product that a distributor
purchases, but then decides to return, for
(Bonus Volume): An alternate expression
for point volume (PV) or business volume (BV). It
is a value used by MLM / Network Marketing companies
to calculate overrides and commissions, based upon
the wholesale price of the items for which overrides
and commissions are being paid.
of Influence: The people who are closest
to you and who constitute your warm market. Also,
those who might be easily influenced by you because
of your reputation in a particular profession or
Market: Prospects outside your circle of
friends, family, and associates.
The percentage you earn from the sales volume of
Volume (CV): An alternate term for bonus
Plan: A pay plan that stacks or compresses
the bulk of its commissions on the front end.
When a distributor quits or is terminated, his downline
moves up one level, thus filling the empty space
he left, and compressing the companys
downline by one level.
Call: A live phone call where multiple
people are part of the same call. Often used in
the mlm industry for training and sales purposes.
A distributor in the same MLM company that is part
of a different upline sponsor. Sometimes looked
at as competition but also could be worked with
in joint ventures such as recruitment meetings.
The number of levels in your MLM or Network Marketing
Selling: A form of selling whereby independent
MLM or Network Marketing representatives, working
on commission, sell face-to-face outside of an established
A person who contracts independently to sell products
or services for an MLM or Network Marketing company.
All the people recruited as distributors into a
network marketing or MLM company constitute that
companys downline. Your downline consists
of everyone whom you recruit, who is recruited
by your recruits, and so on.
The practice of shipping product directly to customers
from the company warehouse, rather than through
an independent distributor.
The extent to which an MLM or Network Marketing
opportunity can be easily mastered by new recruits.
The process of replicating business builders in
Floor: The start of a new mlm company is
often called a "ground floor opportunity".
Sometimes used as a buzz word in mlm to get people
excited about getting into a new mlm company before
everyone else does.
Volume: The total volume of wholesale purchases
made by your personal group in a given month.
A top sales leader in an MLM company or industry.
Hitter: A top sales leader in an MLM company.
Meeting: An opportunity meeting held in
a distributors home.
Meeting: An opportunity meeting held in
a rented hotel conference room.
Bonus: A feature that theoretically creates
infinite depth in a pay plan.
Depth: A feature of some compensation plans
allowing distributors to draw earnings from deeper
levels, below their ordinary pay range.
A top achiever in an MLM or Network Marketing downline.
A down line within your downline, usually headed
by one of your frontline Leaders distributors.
The vertical position of a distributor in your organization.
If you recruit someone, he is enrolled on your first
level. His recruits will be on your second level,
and the recruits of his recruits on your third level.
Market: Prospects who are neither in your
warm market nor your cold market, but somewhere
in between. Can refer to people whom you have spoken
to once or twice or people referred to you by others
in your warm market.
Plan: An alternate term for compensation
plan or pay plan.
Action: A sustained, one time barrage of
A comp plan that limits the number of people on
your frontline, usually to two or three.
Out: A compensation or pay plan is said
to be maxed out when you have put enough people
in place, moving a sufficiently high level of monthly
volume, to qualify you for the maximum level of
commissions available in the plan.
Multilevel Marketing: Generally, an alternate
term for network marketing. It can also be used
to distinguish those particular network marketing
plans that permit distributors to draw income from
more than one level.
The phase of a network marketing companys
growth when sales and recruiting begin to grow at
an exponential rate.
Volume Requirements: An alternate term
Affiliate Program: Also called a 2-tier
affilite program, is an affiliate program that allows
affiliates to recruit other affiliates and to be
paid multilevel commissions on sales of their recruits.
Marketing: Any form of selling that allows
independent distributors to recruit other independent
distributors and to draw a commission from the sales
of those recruits.
Marketing Leads: Leads are people that
have indicated an interest in a product, service
or business opportunity.
Up Program: A type of mlm compensation
plan in which some members you recruit go direct
to your upline as a form of compenation to the upline
The chance to join a mlm or network marketing distributorship,
or another term for the distributorship itself.
Meeting: A recruiting rally or business
briefing held by MLM distributors for the purpose
of presenting the opportunity to prospects.
That portion of your downline from which you are
allowed to draw overrides and commissions. It includes
all distributors placed on levels that fall within
your pay range.
Volume: Monthly sales volume generated
by your organization, through product purchases
from the company.
The monthly commission you receive from your breakaway
The percentage of a companys total revenue
that it pays out to distributors, in the form of
overrides, commissions, and bonuses.
Income: Also known as residual income and leveraged
Plan: An alternate term for compensation
Range: All levels of your downline from
which your comp plan allows you to draw overrides
Group: All distributors in your pay range,
whom you have personally sponsored, but who have
not broken away.
The period just before an MLM or Network Marketing
companys official launch.
A potential customer or recruit.
The process of seeking customers or recruits for
your Network Marketing or MLM business.
Sales Volume: The volume of product that
you personally sell in a given month.
Volume: The volume of product that you
buy at wholesale from the company in a given month.
Volume: An alternate term for bonus volume.
Monthly quotas that distributors are often required
to meet, in order to qualify for a given achievement
level. Quotas are usually set in terms of group
and personal volume. Occasionally, there are recruiting
quotas, requiring that you bring a certain number
of people onto your frontline each month.
A prospect who has agreed to join your downline
as a distributor.
Fee: A yearly membership fee paid to an
Network Marketing or MLM company, in order to maintain
your status as a distributor.
Profit: The spread between the wholesale
price you pay for product, and the retail price
at which you sell it to your customers.
A feature in some plans stipulating that if you
fail to qualify for commissions in a given month,
because you did not meet your quota, you are declared
inactive, and will receive no commissions from your
downline that month.
Also called: Royalty Commissions, or Royalty Overrides.
They are typically often a % of your total downlines
sales volume that is paid to you the upline sponsor
as a commission for being the person who helped
to create the team and sponsor and train your downline.
The theoretical point at which a network marketing
or mlm company runs out of potential customers and
recruits, and stops growing.
and Sorting: The practice of quickly identifying
the most promising prospects and focusing your recruiting
efforts on them, while ignoring the rest.
A distributor in an Network Marketing or MLM company
who recruits and trains another distributor.
An alternate term for an achievement level, or for
a stairstep or breakaway compensation plan.
or Breakaway: A type of compensation plan
that requires distributors to meet monthly volume
quotas, in order to qualify for an ascending series
of achievement levels, or stairsteps. When
a distributor reaches a certain level, he breaks
away from his sponsors group.
The practice of buying and hoarding more product
than you can possibly sell, usually in an attempt
to meet excessive monthly quotas, to qualify for
A recruiting rally or business briefing that is
broadcast by telephone. Prospects are told to phone
in at a certain time to hear the event.
Calls: A prospecting technique that allows
distributors to build a downline while training
recruits. When a raw recruit wants to interview
a new prospect over the phone, he will 3-way his
sponsor into the call. The sponsor gives the presentation
while the recruit listens and learns.
Plan: Another name for the compressed plan,
derived from the fact that many compressed plans
stack the bulk of their commissions on the first
A type of compensation plan in which you must qualify
for achievement levels, but in which people in your
downline cannot break away.
All of the people above you in rank in the network
marketing or mlm organization. Also, an alternate
term for sponsor.
List: A list of personal contacts drawn
up by new recruits that constitutes their warm market.
Market: All potential prospects for your
business whom you personally know, either because
they are family members, friends, or business associates.
The number of people in a distributors frontline,
or the number of people allowed in a distributors
frontline by the rules of the compensation plan.
There are many terms to learn so don't worry about
remembering them all at once. If you don't know
a term just ask or goggle it and in no time you'll
gain a solid understanding of all the various buzz
words and network marketing terminology.
Also be sure to check out our free article on 101+
ways to promote your mlm business here
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