Network Marketing Glossary

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We all know that specific activities, professions, groups, or industries have their own terminology. This "jargon", in many cases, causes a barrier to communication with those not familiar with their "secret" language. Network Marketing is no different. Many of the terms used in MLM can be confusing and difficult to understand. So, below you will find common terms used throughout network marketing.

**If, in your quest to becoming a network marketing tycoon, you find a term I have missed, please let me know and I will add it to the list.**

A

Affiliate Program: An online business, such as SBI!, that allows people to become affiliates by providing a link on their Web sites to the businesses home page. Affiliates are paid a commission on all sales made through this link.

Auto-Responder: A computer program, such as iContact, that automatically answers/sends e-mail.

Auto-Ship: Is an automatic monthly shipment of products of your choice, for the convenience of both Customers and Distributors. Most companies now offer this so that no product has to be stored in mass quantities. In all reputable companies, you may cancel at any time. Payments will be made via credit card debit or sometimes via pre-approved check by phone. The advantages of the Auto Ship is a higher Member retention rate, and payments to distributors are automatically completed.

B

Binary: A type of compensation plan that limits your frontline to two people, and pays out weekly to one of the two legs of your organization.

Breakaway: Commonly referred to the Stairstep Breakaway, one of the four basic types of compensation plans. Breakaway also refers to an independent distributor from your downline who has met certain minimum monthly criteria and has consequently "broken away" from your organization.

C

Circle of Influence: Usually includes family and friends but could include anyone you know personally that make up your warm market. This could also include anyone who might be easily influenced by you because of your reputation.

Cold market: Prospects outside your circle of friends, family, and associates.

Commission: In direct sales, MLM, and network marketing distributors earn various percentages of the amount they sell. In multilevel plans and party plans, distributors also are rewarded for their team sales. These deeper level commissions are a smaller percentage than those they earn for the people they personally sponsor.

D

Downline: People recruited by a distributor and all future people recruited through their network(s). Downlines are organized horizontally by legs and vertically by levels. Ex: Everyone you personally recruit and everyone who they recruit is your downline.

Dream stealer: People who are not only closed minded to your business, but will try and talk you out of being part of it. Unfortunately, dream stealers are often family and friends.

Duplicatable: An easy to repeat system or process.

Distributor: One who delivers products and/or services by means of direct sales from the company to the public. May also be referred to as independent distributor, sales associate, business partner, or representative (reps).

E

Edify or Edification: to build up, establish, or strengthen a person or institution, etc.; to uplift. When you introduce a speaker it is vital to edify them to the group in order to build credibility for the information presented.

Elevator Speech: A short (no more than 30 seconds) speech designed to give requested information about your company.

F

Fast Start Bonus: A financial bonus created for the purpose of getting into action quickly by completing a set of tasks early on in the business. Usually fast start bonuses expire if the distributor does not take advantage of it early.

Frontline: The distributors whom you directly recruit and sponsor, and who are placed on the first level of your organization.

G

Group Volume (GV): The combined volume of one's Personal Volume (PV) plus the Personal Volume of each member in your organization. This includes the PV of customers as well as independent distributors in your downline.

H

Heavy Hitter: The term “heavy hitter” is used in the industry to denote individuals who have had major success building sales organizations and selling products. Heavy hitters who have the ability to build quality long-term sales organizations are very much in demand. ( From mlm-dra.com )

Home based business: A business in which you run from a home office, or anywhere you choose.

Home meeting: A meeting in your home consisting of guests from your warm market, where the business opportunity is most likely presented by your upline. Sometimes commonly referred to as a Private Business Reception (PBR).

I

J

K

L

Leader: A top performer in an MLM.

Leg: A downline within your downline, usually headed by one of your frontline distributors.

Levels: The vertically structured segment of a MLM compensation plan. A person you personally recruit is on your first level. When someone on your first level recruits someone else, that person is on your second level. They recruit someone who is on your third level, and so forth.

M

Mentor: A wise and trusted counselor or teacher. A mentor usually has a large involvement in the success of that whom they are teaching. It is crucial to your success in MLM to have a mentor. Mentors may or may not necessarily be your upline.

Matrix: A compensation plan that limits the number of people on your frontline, usually to two or three.

Multilevel Marketing (MLM): Any marketing program in which participants purchase the right to recruit additional participants, sell products or services, and are compensated for the sales by people they recruit as well as for their own sales. Also referred to as network marketing, direct sales, referral marketing.

N

Network Marketing: Any marketing program in which participants purchase the right to recruit additional participants, sell products or services, and are compensated for the sales by people they recruit as well as for their own sales. Also referred to as multi-level marketing (MLM), direct sales, referral marketing.

O

Override Commission: The income one receives as the result of sales by a downline distributor. A legitimate and legal MLM company may only pay override commissions when actual sales of products or services are made.

P

Personal Volume (PV): The total volume of one's own product purchases for a given time period (usually a month). In most network marketing companies, distributors are required to meet a certain amount of PV per month to maintain their status as an independent distributor.

Pique (to pique interest): A question to provoke interest in one's business.

Prospect: A potential customer or recruit.

Pyramid scheme: A plan that promises large profits based primarily on recruiting others to join its program and not based on profits from any genuine investment or sale of goods to the public.

Q

Qualifying Questions: Specific questions you can ask prospects in order to decide if you want to proceed with the recruiting process. Ex: Are you open to making money outside of what you currently do? Are you interested in owning your own business?

R

Recruit: A prospect that has agreed to become part of your downline; or the act of prospecting someone to become an independent distributor.

Residual Income: Getting paid repeatedly for a one time sale. Ex: Acquiring a customer for a phone company that pays you a percentage of their monthly bill.

S

Sideline: Distributors in your company that are part of your upline's organization but not part of yours. Commonly referred to as Crossline

Sorting: The practice of focusing on the most promising prospects and concentrating your recruiting efforts on them.

Sponsor: One who recruits another onto their MLM team.

Stacking: Stacking is a term used by network marketing companies to describe a distributor's attempt to manipulate compensation in the marketing plan by placing members of his or her household or family in the downline sales structure.

Stairstep Breakaway: A type of compensation plan which requires distributors to meet monthly volume quotas in order to qualify for an ascending series of achievement levels, "stairsteps". Once a distributor has met a certain level, they "break away" from their sponsor's group.

T

Three-way-call: A prospecting technique used over the phone, which allows distributors to use a third party expert in order to assist them in summarizing the business opportunity. Usually the persons Upline.

Tap-rooting: Getting referrals from people who do not join your business or try your product(s).

U

Unilevel: A type of compensation plan in which you must qualify for achievement levels, and people in your downline cannot break away.

Upline: Distributors who are above you in the MLM hierarchy.

V

W

Warm market: Potential prospects you personally know.

X

Y

Z

SBI!