As with any industry, not knowing the lingo is a quick identifier of a 'Green Horn' and often leads to being taken advantage of.
On this page, I will attempt to add terms, and explanations, in order to provide a good resource for the industry. This particular page will be a work in process, as I am often busy with clients.
Affiliate Marketing: Refers to the method of marketing a company's products or services through a sales channel or network of individuals. Most companies that state they are an Affiliate Marketing company utilize a multi-level or DownLine levels for calculation of commissions.
AutoShip: Refers to an automatic re-purchase of a company's product or service, according to a schedule. Normally, an identified Product, Price, and Date of regular re-purchases is defined.
Bonus Pools (BP): Please see MLM Compensation Plan Bonuses.
Customer Acquisition Bonus (CAB): Please see MLM Compensation Plan Bonuses.
Cold Market: Refers to persons who you have no direct contact with, or knowledge of how to build a line of communication with.
Commissions: Refers to an earned benefit from Sales Performance, often within your Sales Team.
Compensation Plan: Refers to the Model/Payment Schedule, used for identifying, calculating, and demonstrating Qualifications, Rank Advancement, Bonuses, or Commissions based on Sales Performance.
CrossLine: Refers to Income Centers located Beside you. They are neither in your UpLine or DownLine. (Please see Relationships)
Distributor: Refers to individuals who affiliate themselves as Independent Representatives, with the Goal to market a company's products or services to end consumers and with the Hope of earned benefit for Sales Performance.
DownLine: Refers to Income Centers located Below you. Normally making up your Sales Force or Sales Team. The Sales Performance of these Income Centers is often used for Rank Advancement and/or Commission Calculations. (Please see Relationships)
First Order Bonus (FOB): Please see MLM Compensation Plan Bonuses.
First Order Bonus Tier 2 (FOB T2): Please see MLM Compensation Plan Bonuses.
Fast Start Bonus (FSB): Please see MLM Compensation Plan Bonuses.
Fast Start Bonus Tier 2 (FSB T2): Please see MLM Compensation Plan Bonuses.
Generational Bonus (GB): Please see MLM Compensation Plan Bonuses.
Income Center: Refers to a position in a DownLine or Compensation Plan Structure, representing the Independent Representative and the Customers belonging to that Independent Representative. Important to note is that Customers and the volume of those customers is represented within the Income Center of the Independent Representative. Customers are not represented in that Independent Representative's DownLine is made up of the Income Centers of other Independent Representatives making up the Sales Team.
Independent Representative: Refers to an individual who chooses to Independently represent a company's products or services, according to the company's Terms and Conditions, as well as Policies and Procedures. Normally, earnings are reported via 1099.
Infinity Bonus (IB): Please see MLM Compensation Plan Bonuses.
Legs: Legs are mostly, but not exclusively used, when speaking of a Binary Compensation Plan Structure.
In a Binary Structure, you visualize Two Legs, a Left and Right. Some companies refer to each person on your frontline as a leg. Thus, even a UniLevel or Matrix may refer to Legs. In this case, they would not be Left or Right, but Numbered.
A Leg Methodologies Examples follow:
(Left Team) Left Leg Right Leg (Right Team)
| | | | |...etc.
Leg1 Leg2 Leg3 Leg4 Leg5
Genealogy: Refers to the downward progression of Income Centers, beginning with your Income Center. The Genealogy may be demonstrated with as Limited or Unlimited, in either Width or Depth. Fundamentally, the Genealogy is made up of Income Centers who market a company's products or services to end consumers. These Income Centers make up your Sales Team and their volume may be used for determination of your qualification, rank advancement, or commission calculations.
Matching Bonus (MB): Please see MLM Compensation Plan Bonuses.
Multi Level Marketing: Refers to the method of marketing a company's products or services through a sales channel or network of individuals. Most companies that state they are a Multi Level Marketing company utilize a multi-level or DownLine levels for calculation of commissions.
MSRP: Refers to Manufactured Suggested Retail Price. Often used to demonstrate the promoted value of a product or service by a manufacture and often separate from the actual Retail or Selling Price.
Network Marketing: Refers to the method of marketing a company's products or services through a sales channel or network of individuals. Most companies that state they are a Network Marketing company utilize a multi-level or DownLine levels for calculation of commissions.
Pyramid/Pyramid Scheme: Refers a business structure which is unethical, immoral, and probably illegal. Important is that a structure is not so much illegal, as the methods, actions, or activities employed. The structure may resemble the structure of traditional business CEO, President, VP 1, VP 2, Sales Managers, Sales Agents, etc. This comparison has been performed many times to justify the structure. The problem is not so much in the structure, but the actions Specifically, most countries impose laws against an 'Endless Chain of Recruiting", as there is normally no clear business model of selling to end consumers.
Recruit: (verb)Refers to the Action of Sponsoring new Independent Representatives to your Sales Team. (noun)It may also refer to the new Independent Representative.
Residual Income: Refers to regular earned income from the Performance of your Sales Team.
Retail: Refers to the Selling Price to End Consumers, either Person to Person, or from a website. It is normally intended to be the price a Customer pays, which often separate from the Distributor/Independent Sales Representative Wholesale Price.
Relationships: "UpLine" refers to those income centers above you. "CrossLine" refers to income centers beside you. "DownLine" refers to income centers below you (Your Sales Team).
CrossLine <--- YOU ---> CrossLine
Sales Force/Sales Team: Refers to your DownLine or Genealogy of Income Centers who sell the company's products or services to end consumers.
Spill/SpillOver: Refers to the automated placement within a Limited width organization, such as a Binary or Matrix.
Sponsor Bonus (SB): Please see MLM Compensation Plan Bonuses.
UpLine: Refers to those Income Centers Above You. In some Compensation Plans, your UpLine is your Sponsor, and then his Sponsor. Not every Compensation Plan is based on a Line of Sponsorship, thus a Binary and Matrix are seldom represented with your UpLine immediately being your Sponsor. (Please see Relationships)
Warm Market: Refers to those people which you know and may be able to reasonably contact to discuss the products or services you sell.
Weak Side/Weak Leg: Refers to a the Front Line Leg with the Least Sales Performance. Example: 10% Weak Side Binary refers to a compensation plan that offers a potential earned benefit equivalent to 10% of the Sales Performance of your Lessor Leg.
Wholesale: Refers to the Distributor/Independent Representative Special Pricing.
Wholesale/Retail Bonus (WRB): Please see MLM Compensation Plan Bonuses.
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