Definitions Of Some Network Marketing Terms (Pt 1)

Like every other profession, network marketing (multi-level marketing) is rife with numerous terminologies  that are frequently used by members to describe the functionality of the entire process. I would try as much as possible to define some of these general terms in few words. This is primarily to enable new entrants into this field have a better grasp and understanding of the subject matter.

1.BINARY: A type of Compensation Plan that limits your frontline to two (2) people and pays out weekly on one of the two legs of your organization.

2.BONUS POOL: A special fund set aside by a network marketing/MLM company, usually from its profits and distributed as a special incentive to qualified sales leaders.

3.BUSINESS BUILDER: A  distributor who is actively prospecting and gathering customers as opposed to one who is simply buying products at wholesale for personal use.

4.CIRCLE OF INFLUENCE: The people who are closest to you and who constitute your ‘warm market’(those you’re familiar with).It also includes those who might be easily influenced by you because of your reputation in a particular profession or community.

5.COLD MARKET: Prospects outside your circle of friends, family and associates.

6.COMMISSION: The percentage you earn from the sales volume of your organization.

7.DEPTH: The number of levels in your MLM/network marketing organization.

8.DISTRIBUTOR: A person who contracts independently to sell products or services for an MLM/network marketing company.

9.DOWNLINE: All the people recruited as distributors into a network marketing/MLM company constitute that company’s downline. Your downline consists of everyone whom you recruit, who is recruited by your recruits and so on.

10.INFINITE DEPTH: A feature of some compensation plans allowing distributors to draw earnings from deeper levels below their ordinary pay range.

11.LEADER: A top achiever in an MLM/network marketing company.

12.LEG: A downline within your downline, usually headed by one of your frontline ‘’leaders’’ distributors.

13.LEVEL: 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.

14.MARKETING PLAN: An alternate term for compensation plan or pay plan.

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

P.S: To be continued in my subsequent post.

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