An MLM or a direct selling business isn’t that complex business anymore which you once thought wasn’t your cup of tea. Over the years, the industry has broken its conventional business models and kept its doors open for millennials and Generation Z alike to walk in and start making a living with their strategies and ideas. While some took it up as a part-time job, others ventured into the business to fulfill their dream of being an entrepreneur. With every nation making new directives and stringent mandates, the industry has gained more trust among people encouraging more individuals to be a part of or start up a new business in the direct selling sector.
Like branches that let a tree grow higher, upline and downline in an MLM genealogy tree define the structure and flow of direct selling business. Understanding the industry in a complete picture might not seem very easy. But thanks to the advent of the most sophisticated MLM business management software that makes compensations and calculations easy peasy lemon squeezy!
What is upline and downline in multi-level marketing
Uplines and downlines are the two most important concepts in network marketing that define the structure and working of an MLM business model.
What is an upline?
Upline is an individual who brings in a new distributor into an MLM company. The upline is also referred to as their sponsor. The sponsor who got them into the business will be their immediate upline and their sponsor’s upline will also be a part of the new distributor. They will also receive a percentage of new distributors’ sales which eventually encourages them to bring in more consultants.
What is a downline?
Downline refers to an individual who is introduced into the direct sales organization by an existing distributor. The referral distributor also receives compensation based on their sales as well as their downline sales. Distributors can place their downlines in favorable places to improve their growth and earning opportunities. A genealogy tree would be helpful to give a detailed picture of their downline team.
MLM upline and downline are the two deciding factors of an MLM business. To efficiently manage these factors favorable for the growth and profitability of a network marketing business, Epixel MLM Software has developed state-of-the-art features to manage downlines. Explore the possibilities of reinventing your direct selling business through an MLM software free demo.
According to the compensation plans structured by various companies, the genealogy tree also varies. Depending on the specifications of various MLM plans, new downlines are placed just below their sponsors.
In a binary genealogy tree, a distributor can add only two distributor downlines under them which is also known as ‘legs’. Though the binary levels can be unlimited, the two downlines per distributor restriction prevail. The commissions in a binary set-up are based on the leg that generates the lowest sales volume which is called the ‘pay leg’. In a binary MLM plan, leaders or sponsors are driven to motivate and engage their distributor teams in maximizing their earning opportunities.
In a unilevel genealogy tree, a distributor can add as many downlines as they want and each of these downline distributors can also have unlimited downlines in their corresponding frontlines.
In a breakaway genealogy tree, distributors are categorized based on their sales volume with which they qualify for a higher percentage of commission. They are also called stairstep breakaways which allow distributors to ‘breakaway’ from their downlines to start their lines when they attain defined personal and group sales volumes.
MLM downline manager
Direct sales companies will have tens of thousands of upline and downline distributors in their business making it difficult to manage and coordinate for the smooth running of the business. MLM Downline Manager is a platform that helps manage downlines effectively and helps organizations administer, encourage and expand their downlines. The software can efficiently onboard, train, and motivate distributors, keep their downline distributors engaged, help them grow through the right strategies, and improve retention rates.
Top-notch MLM Downline Manager features
Sales enablement tools help design strategies to meet downline demands. It is a system that connects content, marketing, and sales cycle allowing distributors to follow the sales process. Analytics tracking and usage of content give a clearer view of what works well for a business.
Marketing automation can automate the process of launching multifunctional campaigns across various platforms. It helps distributors to segment their customers based on demographics, psychographics, and purchase behaviors. The platform lets distributors stay in constant contact with their VIP customers, actively engage with them through rewards and loyalty programs, and thus improve customer retention.
Commission analytics assesses and gauges how effective compensation plans are and their effect on the business. This enables companies to boost their ROI and enhance distributor performance through transparent payout processes, real-time rewards, growth insights, performance management, and active sponsor support.
Report generation tools can help distributors get sales, marketing, commission, and individual downline reports to give them an overall idea of the growth and movement of their business.
MLM genealogy tree helps trace the relationship between MLM upline and downline distributors in the organization across a vast MLM network. More precisely, a genealogy tree portrays the hierarchy and information of a distributor such as a sponsor, their immediate downlines, referral downlines, etc. It also represents their sales, bonuses, commissions, and packages bought. This ultimately helps understand how distributors are associated with the company’s income opportunities, the sales they make themselves, and the percentage of sales generated by their downlines.
As an old Malaysian proverb goes, a tree with strong roots laughs at storms, and an MLM upline with a strong downline can build stronger roots for the direct selling business to grow far and wide.