• Active

    This is the states that multi-level marketing companies need in order to be considered independent distributers. They have a minimum monthly volume that must be generated. This can be achieved by personal purchases, purchased by customers, or both.

    Affiliate Marketing

    This is another form of performance based marketing. It is often confused with multi-level marketing. A business rewards affiliates for each customer or sale they send the business. This is different from MLM. Affiliated marketing is solely based on the amount of traffic generates and does not use teamwork to build income.


    This program ensures that a selection of product will be shipped to your each month automatically. Companies encourage the distributors to enroll in this type of program to remain active. Order may be changed, modified, or can be cancelled at any time.

  • Achievement Level

    When a person is able to sell a certain number of products each month they will earn a certain rank or title. Distributors that have re-cruiting sales can also reach a certain achievement level.


    A website or an Aweber service that will email information automatically. This email will go to anyone who is set up as a responder.

    Affiliate Program

    This is an online business where people provide link to business website. Affiliates receive commission when sales are made as a result of a customer following the link.

  • Auto-Responder

    A computer program that will automatically answer emails. An example of this is iContact.


    Customer and distributors will automatically receive products of their choice without having to place an order. This allows companies to move the products instead of having to store them. You may cancel this at any time. Payments are made by credit/debt cards or check by phone. The advantages of this service include high retention rates and distributors are paid right away.


    This is a type of compensation plan where distributors will use only two front-line distributors. If more then two distributors are needed the others are placed below the front-line. The extra is an attractive feature to new distributors as their front line people are handling other matters. The limitation to this plan is distributors must balance their order to receive the maximum commission rate. Balance is required by making sure the number of sales are no more then a specific percentage of total sales. Distributors will call their team members their strong leg and weak leg based on performance.

  • Bonus

    This is the amount of money added to commissions as a reward. The reward is based on performance. Many companies offer bonuses in the form of electronics, cars, vacations, and even homes for people who reach predetermined goals. The specifics for earning a bonus will be included in the company’s compensation plan.


    This is the sale volume that you generate and your downline. You receive no compensation for this.

    Bonus Volume

    This is another expression for point volume, or business volume. It is used by companies to calculate commissions based off of wholesale prices for each item commissions are paid for.

  • Business Builder

    This is a distributor who is actively gathering customers as apposed to someone who is buying products at wholesale prices for personal use.

    Buy-Back Policy

    There is a money-back guarantee offer by all reputable MLM companies. The company will pay 70-‘100 percent of wholesale prices on products that distributors purchase and return for no specific reason.


    This is referred to as the Stairstep Breakaway this is one of the four compensation plan. This can also refer to an independent distributor who has met the minimum monthly criteria and has broken away from the organization.

  • Commission

    This is a percentage the distributor pays as a result of the sales. This is often calculated based on the total monetary value of the sale or personal volume. This will vary with each company.

    Compensation Plan

    The details of commissions will be determined by the personal revenue of a downline. This can also be called a Comp Plan. This documents all specific incentives for things such as recruiting, bonuses, and qualifications for generating income.


    This includes all rules and regulations for advertising, marketing, and promoting the company. This includes rules for exaggerating income, false product reviews, and other issues of mistrust. This communicates expected behavior of the representatives of the company and violation of the rules can lead to removal.

  • Conference Call

    This is a call where people participate over the phone. This allows all involved to listen to some key speakers. This is done to teach, engage, and inform distributors in various locations. Conference calls are usually hosted over Skype, GoToMeeting, and similar platforms.


    This is company’s products that are used for personal reasons by the disturber. This is common for health and household products.


    This is a form meeting between the distributors and a company. This can happen annually and at trainings. Additional education and training opportunities are often given.

  • Crossline

    The distributor is not structurally connected to the company. They are usually in the same physical location and are on the same team. Everyone is promoting the same thing and working towards the same goals.

    Customer Base

    The group of customers that the business serves. They are generated by independent distributors.

    Commissionable Volume

    Another term for the bonus volume.

  • Compression Plan

    A play plan that contains the bulk of the commissions.


    When the distributor quits or gets fired the space that they left open is filled by another contributor.

    Circle of Influence

    Friends and family and others people close to you that make up your warm market.

  • Cold Market

    People outside of your friends and family.


    A person that sells or finds customers for a MLM company. They are often independent contractors. The distributor has to file a 1099 Tax form . They are also referred to as representatives or partners. The distributor works to build a team and recruit sales. They may also sign up their own members to work for the company. They are not salaried and get paid by the amount of sales they generate. They may earn a certain percentage.

    Distributer Agreement

    This is a contract with the marketing of an item and the company. This includes a code of conduct, company polices, and expected behaviors of each party.

  • Distribution Kit

    This is usually the kit required to become a distributor. There are different size kits at different prices. They include training and marketing materials, clothing with the company logos, and sample products. The kit can be used for sale demonstrations and to show customers the product in person.


    This is the number of people the distributors have to recruit to join the organization to generate their own income.


    The distributer does not have to keep a large physical stock but will have their products shipped directly to customers. This is one of the ways in which distributors make their earning.

  • Duplication

    This is using previous knowledge and sharing it with others. This is how new enrollees find success in the company. Many state just to keep things simple.


    The number of level within a MLM organization.

    Direct Selling

    MLM representative who are working on commission sell the products face to face.

  • Duplicatability

    This is an MLM opportunity that can help out new recruits.

    Dream Stealer

    These are people who will try to talk you out of working for an MLM company.


    A system that is easy to repeat over and over.

  • Earnings

    Money the company gets from selling a product. This can include commission, bonuses, incentives, and residual income.


    This will help to attract potential distributors to a company. This also serves as an evaluation system based on success, earnings history, and relationships with the customers.


    This is the process of signing up new members. A person must sign up in order to be considered a part of the company.
    Elevator Speech:
    This is a short speech about a company.

  • Financial Freedom

    This is achieved when a person is debt free and able to enjoy their earnings. This can be achieved by reaching high sale volumes and compensation plans.


    This is when the distributor contacts a client after purchase to address any question or concerns the client may have.


    This is the number of member that you enroll. You get rewards based on the performance for these members.

  • Fast Start Bonus

    This is a bonus given for completing sales soon after starting.


    These are the distributors that work directly with the client.

    Garage Qualified

    This happens when a pile of products add up in storage. This is usually done to get rewards from a company. The distributor is able to try to sell these products at a later date.

  • Genealogy

    This is the list of members on the downline. All of the members work towards the goal of promoting their company.


    It is important to set short term goals and celebrate small accomplishments. Long term goals are something to work for in the future. This will help keep people on track.

    Group Volume

    This is the amount of money generated by a team of distributors.

  • Home Meetings

    This is when distributors meet people face to face and discuss the company. This is an important part of the recruitment process.


    A compensation plan that leads to the development of a new plan design. It can improve current plans. It increases income opportunities for the developer. These plans can be based on commissions or percentage of sales.

    Hotel Meeting

    A meeting held at a hotel conference room.

  • Heavy Hitter

    An individual that has had huge sales success

    Home Based Business

    A business that can be ran out of a home office


    A reward for meeting goals on the job. This is used to help keep employees motivated and focused.

  • Inventory Loading

    The personal purchase of a large order of good to receive bonuses for sales goal. These products may not be returned to the company.

    Infinite Bonus

    A pay plan with limitless earnings.

    Infinite Depth

    The chance for the distributer to earn money outside of their ordinary pay range.

  • Leads

    Lead Generation

    A person that supplies leads to a MLM business. This can be through advertisement, list purchases, cold calling, and use of the internet to find potential customers.


    A distributer who takes the responsibility of training a sales team.

    Lead Prospecting

    This is the building of a relationship between potential recruits and the business. This process if getting people interested in joining the company.

  • Level

    The placement that the distributor is at. As their sales increase the distributor will move up and have higher earnings and larger commissions.

    Lukewarm Market

    A market where sales are not high but are not too low either.


    A downline within a downline in the company.

  • Marketing Materials

    Materials that are used to help promote a company’s good or services. This can include flyers, videos, and sample products. This will help attract customers to the business.


    A networking system that has a limited number of downline people on each level of the organization.

    Multi-level Marketing

    A business opportunity for people to earn money by receiving compensation for their efforts. A person promotes a business or services and is paid when they sign up new customers or people to help with the recruitment.

  • Marketing Plan

    A payment plan

    Massive Action

    A one time activity to help the company make money.

    Max Out

    The highest volume of commission that a person can reach.

  • Momentum

    A phase of growing of a network and sales

    Monthly Volume Requirements

    The qualification a person must reach for the month

    Multi-Affiliate Program

    A program where a person is paid based on the number of people they recruit

  • Mentor

    A trusted teacher to show you how to succeed in an MLM business setting.

    Multi-Level Marketing

    A program where distributors are used to sell a product or service. They are paid based on their sales and the people they are able to recruit.

    Network Meeting

    A pyramid selling system where the member sell the products or services. Commission is based on performance.

  • Network Marketing Leads

    People that may be interested in the businesses’ products or services.


    A statement of disapproval from a company.


    A network made up of company employees including distributors, members, and customers. The distributors are able to recruit new membership. An organization has different levels including leaders and downlines.

  • Opportunity

    The chance to join an MLM network.

    Opportunity Meeting

    A meeting held by an MLM to recruit new distributors.

    Organized Volume

    Monthly sales of a company.

  • Overrides

    Commission a distributor receives from breakaway legs.

    Override Commission

    The income a person receives from a downline distributor.

    Passive Income

    This is also known as residual income. A member receives earnings with little effort from work they have previously done.

  • Passive Volume

    Income from a distributor’s sales , customer purchases, or both.

    Policies and Procedures

    A set of rules within a organization that employees and distributors must follow.


    When a distributor first signs on with a company they will be told what to expect and information that will make them excited about working for the company.

  • Presentation

    A way to display the companies compensation plan, profile, and the services they offer. This can be done in meetings, webinars, and conferences. This is done to attract people to the company.


    The goods that are sold to customers.


    The output to input production rate. The higher the output the better the company is doing. This is necessary for success.

  • Profit

    The amount of money a distributor makes for the sales of their goods or services. This is also the price they marked up the good to sell at minus the cost that they paid for it. This can also be the money they earned from new recruits after expenses.


    The way a business plans to bring in more money that what they invested. A distributor can earn money be selling goods or services and the number of people they recruited and their sales.


    A prospect is a potential customer of distributor.

  • Prospecting System

    A method of attracting new customers or distributors. They may involve mass emails and cold calling. The goal is to convert potential members into actual members.

    Pyramid Scheme

    A business model where a person enrolls others into a scheme where no actual products or services as sold. No revenue is generated within the company other then their own distributors.


    The amount of a company’s revenue that is paid to distributors.

  • Pay Plan

    Another name for compensation plan

    Pay Range

    The different levels that a person can earn money.

    Personal Group

    All distributors that you have sponsored that are getting paid.

  • Pre-launch

    The time before an MLM company is officially open for business.

    Personal Sales Volume

    The amount of sales you made in a month

    Point Volume

    Another term for bonus volume.

  • Pique

    A question to get a person’s interest in a business.

    Pyramid Scheme

    A plan where a person gets paid on recruiting other and is not based on actual sales.


    People that are potential numbers and show interest.

  • Qualifications

    Distributors that have met regulations to move onto the next level. This includes meeting sales and recruitment goals.

    Qualifying Questions

    Specific questions asked to leads to see if they are really interested in joining.


    The act of seeking new members. A person who is enrolled with the company.

  • Referrals

    A marketing method to promote a business. This is usually done through word of mouth.


    Short for representative or distributor.
    Someone who can speak about the benefits of a company.

    Replicated Website

    A replicated website is a website template redone for multiple users and made for particular business uses. This is done to make the company a strong web presence and produce target leads that can help in business growth. The website information and contents remains unchanged except for the user names and profiles, which are changed according to each worker’s detailed information.

  • Residual Income

    Residual income is income received on a regular basis without applying more work or effort to earn it. It’s different from regular pay where the paycheck is based on the number of work hours for a particular period. In network marketing, residual income is created through team building and team growth.


    Retail refers to the sale of products or services to customers for profit. In network marketing, retailing is done by members who get goods at wholesale price and resell them to end users at markup.

    Retention Rate

    Retention Rate refers to the percentage of people or members who continue to stay with a particular company. Members who leave the company aren’t considered to be retained members.

  • Renewal Fee

    A yearly membership fee paid to a Network Marketing in order to maintain status as an issuer.

    Retail 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 guaranteeing if you fail to qualify for commissions in a given month, because you didn’t meet the quota, you’re considered inactive, and won’t receive any commission for that particular month.

  • Scam

    It’s also know as the confidence trick. Scams is an attempt to cheat or take advantage of a person or group by earning their trust first.

    Two of the most popular scams are illegal Ponzi scheme and pyramid scheme. They’re scams planning to make money solely through recruiting- without offering a product. It’s simply cheating other people’s money for personal gain of an illegal network.

    Shared Leg

    This involves sharing the main leg to the sponsor or people higher than a member. This is designed to give help to members on the lower lever from members on the higher level.This system is considered to promote team work and effort.


    This refers to a “member” in a network marketing team but not in a particular issuer’s sponsorship. Known as crosslines, they don’t earn revenue from other sales or efforts. They are someone’s else lower level worker and in one of the higher level’s team.

  • Sign-Up

    This term is widely used to validate or confirm membership in a particular company.


    Upline is the person who recruited you into a company or the person who’s connected within the same line.


    Volume is the number of items sold, or the number of recruits in the networking business. Depending on the type of business, there are various definitions.

  • Warm Market

    A Warm Market is defined as a potential customer base that can agree to sales pitch that has previous knowledge about the product or business.

    Weak Leg

    Weak Leg has less members, but in compensation plans a particular issuers has to keep both legs balanced to qualify for a paycheck.


    A term used to describe the products or services of a particular business. This product or service is usually bought in large quantities at low costs to be retailed for profit.

  • Word-of-Mouth

    Word-of-Mouth refers to sharing information from one person to another through talking. It’s generally believed to be an inexpensive way to advertise and promote.

    Work from Home

    The term refers income-earning attempt that people can do work from home. Many Network market companies are work from home businesses.

    Warm List

    A personal contact list made up by new recruits that represents their warm market.

  • Width

    The number of people in a issuer front line, or the number of people allowed by the rules of the compensation plan.

    Warm market

    Potential prospects that you know personally.