User:Broscott/MLM Terms and Lingo

MLM Terms and Lingo
As with any industry, not knowing the lingo is a quick identifier of a 'Green Horn' and often leads to being taken advantage of. Experienced MLM'ers will recognize a lack of knowledge and experience, simply from your vocabulary. Consultants, Software Vendors, and even Attorneys can quickly identify inexperience. Inexperience can make you a target for over-pricing and misguidance, in directing you with the development of your Business Model, Compensation Plan, Documentation, and or Marketing Materials, as well as the raw costs of necessary Products or Services.

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) Profit Sharing or Bonus Pools are established by setting aside a portion of every sale made by a company. Those funds are then divided among qualified individuals, or they are split into sub pools and then divided. Generally, there are two methods for division. Earned shares based on Sales Performance, or equal division of everyone in the pool based on equal rank or higher. The later is preferred.

Customer Acquisition Bonus (CAB) A Bonus, normally a % of CV, for acquiring new customers. This is a good bonus to use when the company goal is to encourage the Sales Force to be focused on Sales Performance to End Consumers.

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) A dollar amount or % of CV from the First Orders made by Customer or New Personally Enrolled Sales Representatives. Normally, when this bonus is used, the majority of available CV is used in the bonus which then requires that the items on this invoice not be included in CV totals and the regular compensation plan calculations. Future purchases by the same individual would provide CV disbursement based on the stated compensation plan. Sometimes referred to as Seller First Order.

First Order Bonus Tier 2 (FOB T2) The ability to assign an additional benefit to the Sponsor of an individual receiving the regular First Order Bonus. Sometimes referred to as Sponsor First Order.

Fast Start Bonus (FSB) An instant 'Spiff', normally tied to specific Sku's, this bonus is triggered upon the sale of a specific product and normally carries a specific dollar amount or % of CV. This bonus could be available to specific ranks, but is often available to entry level Sales Representatives, without other qualification requirements. Many companies will put a Fast Start Bonus on an Optional Product Assortment at the time of enrollment. This would benefit the Sponsor of the new Sales Representative who chooses to make an initial purchase. Sometimes referred to as Seller Fast Start.

Fast Start Bonus Tier 2 (FSB T2) The ability to assign an additional benefit to the Sponsor of an individual receiving the regular Fast Start Bonus. Sometimes referred to as Sponsor Fast Start.

Generational Bonus (GB) The potential to earn a % through my Sales Force until reaching another member of My Rank or Higher. Some programs will offer multiple Generations. Gen1 10%, Gen2 5%, Gen3 2%... in this example, I could earn 10% in my Sales Force until reaching a member of My Rank or Higher, I would then earn 5% in His Sales Force until reaching another member of My Rank or Higher, I would then earn 2% until reaching another member of My Rank or Higher, then stops.

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 the DownLine, as the 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) The potential to earn a % through infinity, or until blocked by another Infinity Qualified member of your Sales Force. Some plans allow multiple Infinity Bonuses. If I am qualified for the 10% Infinity Bonus, I would earn 10% through infinity, or until I reach another Infinity Qualified member of my Sales Force. If that Member is a qualified for a 5% Infinity Bonus, then he would earn his Infinity Bonus within His Sales Force, and I would be left to earn 5% within his Sales Force, until reaching another Infinity Bonus Qualified member. If in my Sales Force, I meet someone who is also qualified as 10% Infinity Bonus, then I would be left with 0% Infinity Bonus within his Sales Force.

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.

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) Normally an amount equal to a % of a sales commission earned by your personally sponsored Sales Representatives. Example: I Sponsored John who earns $500. If I am qualified for a 10% Matching Bonus, John would earn his commission, and I would also earn $50 as a Matching Bonus. Some companies will combine the Matching Bonus with a Generational Bonus. This method would provide a Matching Bonus through Generations of Personally Sponsored.

MultiLevel 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 MultiLevel 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 products or services 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).

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) A Bonus, normally a % of CV from the Sale of a Product or Service, sold during the sponsorship of a new Sales Representative.

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) Generally considered the First Bonus available to any Sales Representative, regardless of qualification. Sell products to end consumers, in person or by the company Website. End consumers pay retail price and the Sales Representative enjoys the difference between the consumer purchase price and the Sales Representative's wholesale purchase price.

Author: Scott H Leonard |  Source: www.MLMSoftwareCentral.com