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MLM Glossary
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Achievement level:Reaching or achieving a target level by recruiting a certain number of distributors, or by selling a certain quantity of products within a fixed time period.
Eg : Meeting the target sales and recruits, a distributor reaches the achievement level.
Related terms : Bonus , Incentive
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Activation Rate:The percentage of new recruits who actually start selling.
Why it matters in direct selling : It shows how well new people are trained and supported at the start, and how quickly they get involved in the business.
Eg : If 50 people join and 20 make a sale, the activation rate is 40%.
Related terms : Active, Onboarding, Training, Recruit
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Active:On generating a target personal volume by a certain amount of sales or by recruiting a certain number of new distributors, a distributor can maintain a title ‘Active’. The sales can be customer or distributor purchases or personal purchases.
Eg : When the downline team becomes active, the whole team will be benefited.
Related terms : Downline, Distributor
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Active distributor:A distributor who meets the basic activity requirements, like making sales, purchases, or adding new members within a set time.
Why it matters in direct selling : Active distributors keep the business moving. They also stay eligible to earn commissions, which helps keep the whole network running smoothly.
Eg : Sarah sells products worth ₹10,000 every month, so she stays active and continues to earn commissions.
Related terms : Active, Distributor, Personal sales volume
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Add-on product/Add-on charge:An add-on product or charge is an extra item, service, or fee added to a purchase beyond the main product the customer wants.
Why it matters in direct selling : In this industry, it can include upsells, bundled subscriptions, event packages, success systems, back-office tools, training kits, or extra autoship options. These extras should stay optional and clearly explained.
Eg : Distributors were told not to present an optional training bundle as a required add-on product for business success.
Related terms : Upselling, Product, Autoship
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Administrative complaint:A formal complaint filed by a government agency, like the Federal Trade Commission. This is to start legal action through its own process instead of going straight to court.
Why it matters in direct selling : If a company is suspected of things like misleading income claims, pushing too much inventory, or using unfair sales practices, the FTC can take action by filing this type of complaint.
Eg : The company received an administrative complaint from the FTC for allegedly making misleading income claims through its field leaders.
Related terms : Compliance Monitoring, Ethical business, Scam
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Administrative Law Judge (ALJ):A judge who handles cases inside a government agency rather than in a regular court.
Why it matters in direct selling : Issues involving regulators, like the Federal Trade Commission, are often first reviewed by an ALJ, who looks at the evidence, hears the arguments, and makes a decision.
Eg : The dispute over the compensation plan was first reviewed by an Administrative Law Judge as part of the agency’s internal process.
Related terms : Compliance Monitoring, Ethical business, Scam
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Administrative proceeding:A legal process handled within a government agency, where a judge from that agency reviews the case instead of a regular court with a jury.
Why it matters in direct selling : A direct selling company may need to defend itself in front of an agency first, before the case ever moves to a federal court.
Eg : Instead of going straight to federal court, the regulator started an administrative proceeding against the network marketing company.
Related terms : Compliance Monitoring, Ethical business, Scam
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Affiliate:A marketing strategy letting third parties or affiliates to bring an increase in the sales of products or services by adopting own marketing techniques and get paid a commission.
Eg : Through affiliate programs, direct sales will get enough boost to maintain good business.
Related terms : Commission
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Agency enforcement action:This is when a government authority steps in to take action against a company for possible rule violations. The goal is to investigate the issue, stop harmful practices, and enforce compliance.
Why it matters in direct selling : For direct selling companies, this could relate to problems like exaggerated income promises, unproven product claims, misuse of subscription orders, or improper conduct by distributors. Such actions can lead to fines, restrictions, or required changes in how the business operates.
Eg : The Federal Trade Commission took enforcement action after finding concerns in the company’s sales training and marketing approach.
Related terms : Compliance Monitoring, Ethical business, Scam
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Anti-Money Laundering (AML):Rules and processes to stop illegal money activities.
Why it matters in direct selling : It helps protect the company from legal trouble and ensures all financial transactions are clear and legitimate.
Eg : Checking large or unusual transactions in distributor accounts.
Related terms : Cybersecurity, Ethical business, Enterprise management
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Anomaly Detection:Finding unusual patterns in distributor activities that don’t look normal.
Why it matters in direct selling : It helps catch fraud, rule-breaking, or suspicious activity early before it becomes a bigger problem.
Eg : If one account suddenly places a large number of orders, it may trigger a review.
Related terms : Cybersecurity, Automation
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Article II Challenge:A legal claim based on Article II of the US Constitution, mainly about the President’s control over government officials.
Why it matters in direct selling : Companies may use this to question whether regulators or their officials have too much independence or power.
Eg : The company’s lawyers argued that the regulator’s internal system gave its officials too much protection from oversight.
Related terms : Compliance monitoring, Ethical business, Enterprise management
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Article III Court:A federal court set up under Article III of the U.S. Constitution, where judges have strong independence (like life tenure).
Why it matters in direct selling : Some companies prefer their cases to be heard in these courts instead of an agency’s internal system.
Eg : The defendants argued that the case should be handled in an Article III court, not through the agency’s internal process.
Related terms : Compliance monitoring, Ethical business, Enterprise management
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Attrition Rate:The percentage of distributors who leave the business over a certain time.
Why it matters in direct selling : A high attrition rate can show problems with training, support, pay plans, or product satisfaction. Also, it can weaken business over time.
Eg : If 100 distributors join and 30 leave within a year, the attrition rate is 30%.
Related terms : Retention rate, Inactive, Team, Network
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Direct selling attrition – Understanding the concept and ways for effective management
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Audit Trail:A record of all actions, transactions, and activities in the system.
Why it matters in direct selling : It helps with compliance, investigations, and solving disputes by showing exactly what happened and when.
Eg : Keeping track of all changes made to distributor accounts and payments.
Related terms : Back office, Automation
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Automation:The act of implementing the control of equipment with advanced technology; usually involving electronic hardware.
Eg : Marketing automation helps businesses to increase their sales volume.
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Autoship:Autoship is a scheduled shipment program through which customers can make regular repeated purchases without the need for placing a new order every time.
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Auto-ship (Subscriptions):An automatic monthly order set up to keep products coming or to stay eligible for commissions.
Why it matters in direct selling : Auto-ship helps create consistent income for the company. Also, it will make sure that distributors stay qualified without missing requirements.
Eg : John sets up a ₹5,000 monthly auto-ship, so he stays eligible to earn commissions.
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Back office:The virtual portal that MLM companies provide for their distributors in order to access critical business information.
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Balancing leg:Only by balancing the volume in the two downline legs and by maintaining equal volume, one will get the maximized payout. This leg used to balance the volume is referred to as a balancing leg. Otherwise, the commissions will be paid considering the shorter leg i.e. the weak leg.
Eg : The balancing leg determines the maximized payout of a distributor.
Related terms : Strong leg, Weak leg
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Behavioral Segmentation:Grouping distributors based on their actions and level of activity.
Why it matters in direct selling : It helps companies give the right training, rewards, and communication to different distributor groups.
Eg : Separating “top performers” from “inactive recruits.”
Related terms : Target audience, Funnel, Conversion rate
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Binary:A popular compensation plan where a distributor can have only two front line distributors. The excess recruits are placed under the sponsored distributors as spillover.
Eg : Only two members are recruited under a distributor in a Binary plan.
Related terms : Active, Spillover, Strong leg, Weak leg
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Binary plan (update):The compensation plan with two legs, that is left and right. In this, each distributor can build two main teams.
Why it matters in direct selling : This will balance the distributor earnings and improve teamwork.
Eg : Ravi builds two teams. One on the left and one on the right and earns bonuses based on the weaker leg’s volume.
Related terms : Binary, Strong leg, Weak leg, Compensation plan, Team
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Bonus:The extra benefit in addition to the commission given to a distributor by a business owner considering his/her performance. It may be in terms of money or in the form of any rewards.
Eg : The sales representative in an MLM company will receive a commission or bonus for the new business or for adding new recruits.
Related terms : Commission, Infinite bonus
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Breakage:Breakage is the unpaid compensation. It is the difference between the total or maximum percentage of payout of a plan and the actual payout.
Eg : Breakage is when certain rules are imposed to qualify for commissions.
Related terms : Compensation plan, commission
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Breakaway:A popular MLM compensation plan, also known as the Stair step plan. When a distributor reaches a breakaway rank, he/she can break away from the existing group and can make an own group independently without depending on the upline.
Eg : The volume generated by the breakaway team will be part of that breakaway’s group.
Related terms : Stairstep breakaway, Upline
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Breakaway leg:The downline under a breakaway distributor, on achieving a certain level, can break away from his/her upline or sponsor.
Eg : When one of your recruits breaks away and forms another team, you will no longer receive the commissions from this breakaway leg.
Related terms : Stairstep breakaway, Upline
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Bonus pool:An income fund that is set aside from global sales or sales during a specific period that is distributed as a reward for qualified leaders.
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Business builder:Instead of buying products in wholesale rates for personal use, the distributor actively prospects and gathers customers.
Eg : Adding new prospects and customers, a business builder builds the team and brings business.
Related terms : Prospects, Team
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Business presentation (bp) or business opportunity presentation (bop):A formal meeting or business presentation that takes place in a formal set up or informally in a coffee shop, restaurant, home, or hotel conference room with an intention to invite others to become independent distributors or product customers.
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Buyback policy:It is an official agreement by a company to buy back sold products from distributors at its current price whne it is returned within a specified period of time.
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Business volume or bonus volume:Often referred to as BV, it is the real value a company uses to assess payable commissions which could vary with varying wholesale dollar values from company to company.
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A full review of Business Volume in MLM and network marketing
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CAC hub (Central America & Caribbean Hub):A regional setup to manage several countries together.
Eg : One office in Panama handles operations for Panama, Costa Rica, and the Dominican Republic.
Related terms : Organization, Enterprise management
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Channels (Sales channels):Sales channels are the various methods through which a business sells its products to customers.
Eg : A company might sell its products on its website and also have independent distributors who sell the same products directly to customers.
Related terms : Network marketing, Direct selling, Direct selling channel
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Churn Rate:The rate at which customers or distributors stop being active.
Why it matters in direct selling : A high churn rate can mean people are unhappy, not getting enough support, or not satisfied with the products. It’s an important factor to improve retention and to keep the business stable.
Eg : If many distributors stop placing orders or leaves the network in a month, the churn rate goes up.
Related terms : Attrition Rate, Retention rate, Inactive
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Civil Investigative Demand (CID):A Civil Investigative Demand, often called a CID, is a formal request from a government agency like the Federal Trade Commission. It asks a company to provide documents, data, or even testimony before any lawsuit is filed.
Why it matters in direct selling : Receiving a CID usually means regulators are closely reviewing how a company operates. It is often an early sign of a deeper investigation into business practices.
Eg : The company received a CID asking for distributor communications, income presentations, and complaint records.
Related terms : Compliance Monitoring, Ethical business
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Cold market:People outside your friend circle or family who may become a sales person’s future prospects. With social media and other ways of networking, we can make the cold market into a warm market.
Eg : Talk with people around when you go out and approach them with proper confidence and get those cold market prospects.
Related terms : Prospects, Organization
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Commission:The amount or percentage paid to a distributor for the efforts rendered or by considering the sales volume of your organization.
Eg : Distributors receive a commission for their sales efforts or for the number of recruits they enroll.
Related terms : Bonus
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Commissionable volume:Companies pay commissions considering the price of the items with certain conditions. Only a percentage of the total price or a value is used to calculate the commissions. This amount is referred to as commissionable volume.
Eg : Commissionable volume is calculated by considering a member's or his/her downline's purchases.
Related terms : Downline, Group volume
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Commissioners:The officials who are appointed to lead an independent federal agency such as the FTC.
Why it matters in direct selling : When it comes to the area of direct selling, the commissioners have the authority to authorize investigations, complaints, settlements, and final agency decisions that affect businesses.
Eg : The commissioners’ vote officially allows a complaint to be filed against the company. And it starts the legal or regulatory review process.
Related terms : Compliance monitoring, Ethical business, Enterprise management
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Community-based commerce:The process of selling through trusted relationships within friends, family, and local groups to improve brand engagement.
Eg : A distributor sells products at church meetings, family get-togethers, and local events.
Related terms : Word of mouth, Referral marketing
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Compensation plan:It refers to how commissions are paid to distributors which are determined by considering the personal sales volume and that of downlines.
Eg : Based upon the chosen compensation plan, the commissions or payouts are paid to distributors for their personal sales volume and that of their downlines.
Related terms : Marketing plan
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Compliance Monitoring:Consistent review of distributor actions to uphold compliance with company policies and legal standards.
Why it matters in direct selling : It helps avoid legal issues, keeps the company’s reputation safe, and reduces the risk of fines caused by false claims or unethical actions.
Eg : Checking social media posts to make sure distributors are not making improper income claims.
Related terms : Ethical business, Distributor, Enterprise management
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Compliance program:It consists of a company’s internal policies, procedures, enforcement, and processes created to make sure that it follows all the established laws.
Why it matters in direct selling : A proper compliance program is inevitable to observe the challenges like distributor claims, social media conduct, income representations, and customer treatment in the MLM industry.
Eg : The company improved compliance efforts with field training reviews and better claim controls.
Related terms : Compliance monitoring, Training, Ethical business, Distributor
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Consent order:An agreement to settle a case where a company accepts certain rules or actions without going through a full court process.
Why it matters in direct selling : Many cases in this industry end this way. Companies may need to control earnings claims, train distributors, monitor activity, or offer refunds.
Eg : Instead of continuing the case, the company agreed to a consent order that required stronger compliance controls in the field.
Related terms : Compliance Monitoring, Ethical business, Training, Distributor
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Constitutional challenge:A legal claim that a law or government action goes against the Constitution.
Why it matters in direct selling : A company facing action from regulators like the Federal Trade Commission may challenge not just the claims, but also how the case is being handled.
Eg : The company filed a constitutional challenge, saying the agency’s process was not lawful.
Related terms : Compliance Monitoring, Ethical business, Enterprise management
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Consumer complaint:A consumer complaint is a report from a customer that claims a company acted in an unfair, misleading, or harmful way.
Why it matters in direct selling : These complaints can lead to closer review by regulators, especially if they involve income claims, product claims, refund issues, autoship problems, or high-pressure sales tactics.
Eg : The company’s compliance team reviewed all consumer complaints related to refund disputes and exaggerated income claims.
Related terms : Compliance Monitoring, Customer, Product, Ethical business
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Cross selling:It is selling of additional or subsidiary products or services according to customer interests while purchasing any of the company's products.
Related terms : Product
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Cross-border expansion:The process of business expanding into different countries.
Eg : A US distributor builds a team in the Dominican Republic using social media and online training.
Related terms : Growth market, Emerging markets
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Conversion rate:The rate at which leads are converted to customers or distributors.
Related terms : Network marketing leads, Distributor
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Coding bonus:Coding bonus is what companies pay their distributors based on their downline performance. When distributor’s downlines make sales, they are coded so that the original distributor is paid a bonus on their initial order, over and above their ongoing sales and personal orders.
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Compression:Compression is a type of compensation plan that compresses downline by one level if a distributor quits or is terminated.
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Customer Acquisition Cost (CAC):The cost of getting a new customer or distributor.
Why it matters in direct selling : It shows how efficient your marketing and recruitment efforts are, and helps ensure the business stays profitable.
Eg : If you spend $100 on ads and recruit 5 distributors, the CAC is $20.
Related terms : Lead generation, Conversion rate, Funnel
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Customer Volume (CV):The total sales that come from actual customers, not distributors.
Why it matters in direct selling : Sales from real customers are important to keep the business sustainable. They show that the company is selling real products beyond simply recruiting.
Eg : If 50 customers buy products worth ₹1,00,000, that amount counts as Customer Volume (CV).
Related terms : Personal sales volume, Group volume
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Cybersecurity:Cybersecurity is the practice of protecting assets that companies and individuals adopt to safeguard their critical systems and sensitive information from digital attacks.
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Depth:It is the number of levels in a personal network.
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Digital transformation:It is the process of transforming a business with innovative digital technologies by creating new business processes, culture, and customer experiences to meet changing business and market requirements.
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Businesses beyond benefits: Functional shifts reformulating direct selling operations
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Direct selling:Direct selling refers to the selling of products directly to the customers usually without any specific retail locations. The seller purchases the product from the direct selling company and sells them to the customers.
Eg : In direct selling business model, companies sell their products directly to customers in a non retail environment and a commission is paid to the distributors.
Related terms : Network marketing, MLM
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Direct selling channel:It is one of the oldest, simpler and fastest channels of distribution where the distributors sell products directly to end users and build teams.
Eg : A team leader may conduct small home events where customers can shop and also become a part of the distributor network.
Related terms : Network marketing, MLM
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Disclosure Statement:Many direct selling companies publish Income Disclosure Statement (IDS) to disclose the income an average distributor earns annually.
Why it matters in direct selling : It helps keep things transparent and prevents misleading income claims and shows the average earnings of individuals.
Eg : A company states that 70% of its distributors earn less than $500 per year.
Related terms : Ethical business, Compensation plan
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Discriminatory pricing:Based on factors like race or ethnicity people being charged different prices for products, which goes beyond fair business reasons.
Why it matters in direct selling : Even if it’s not a common MLM term, it’s important for compliance. Differences in pricing, signup fees, local offers, or payment options can create legal issues if they seem unfair or biased.
Eg : The company checked if any special offers in certain markets could be seen as unfair or discriminatory pricing.
Related terms : Retail, Product, Ethical business
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Disparate impact:This means that policies, processes, or systems that seems neutral at first, but ends up hurting a protected group.
Why it matters in direct selling : This can happen in areas like recruiting, promotions, event access, location limits, language support, or pay structures. Even neutral rules can create unfair outcomes.
Eg : The company asked a legal expert to check if its qualification rules were unintentionally affecting some groups more than others.
Related terms : Compliance Monitoring, Recruit, Ethical business
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Distributor:The person who markets and sells the products of an MLM company and he/she receives commissions for it. This distributor can recruit or add more people and make a team and their sales will also be considered for commissions.
Eg : Distributors buy products of an MLM company at a wholesale rate and sell them to the customers and earn commissions.
Related terms : Marketing materials
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Distributor-led growth:When most growth comes from distributors, not ads.
Eg : New customers mostly come through referrals instead of paid advertising.
Related terms : Referral marketing, Word of mouth
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Document production:Document production is the process of gathering and providing company records during an investigation or legal case. This can include emails, reports, policies, and other internal documents.
Why it matters in direct selling : For direct selling companies, this may cover compensation plans, rank advancement data, distributor scripts, training materials, and compliance reports. It gives regulators a clear view of how the business works.
Eg : The Federal Trade Commission asked the company for documents related to recruiting claims made at leadership events.
Related terms : Back office, Enterprise management
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Downline:The members who join the company or recruited under a distributor, whose sales or efforts will also be considered for paying out the commissions of their upline.
Eg : The network of members who are recruited by you becomes your downline.
Related terms : Genealogy
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Draft complaint:It is a first draft of a legal complaint shared before it is officially filed.
Why it matters in direct selling : Regulators may share this during discussions before filing a case. It gives the company a chance to respond or settle.
Eg : Before the case was filed, the company received a draft complaint explaining the agency’s concerns about earnings claims.
Related terms : Compliance Monitoring, Ethical business
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Dropshipping:A distributor need not have to maintain a physical stock of products as in a retail shop. The distributor can transfer the customer’s order and shipment details to the MLM company where he belongs and the company can send the products directly to the customers.
Eg : Distributors can take advantage of dropshipping as they need not have to physically stock the products.
Related terms : Products
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Due process:The right to fair treatment and proper legal steps before the government can take action against a person or business.
Why it matters in direct selling : Companies may raise this if they feel an investigation or legal process is unfair, such as lack of clear notice or a biased hearing.
Eg : The company’s lawyers argued that the process was not fair and affected their due process rights.
Related terms : Compliance monitoring, Ethical business, Enterprise management
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Duplication:The system through which new distributors are trained to duplicate or replicate the success of their upline.
Eg : Duplication of business ideas of successful uplines is a key factor for team success in network marketing.
Related terms : Sponsors, Uplines, Team, Network Marketing
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E-commerce:A business model for buying and selling goods with the help of the internet. Individuals or companies can list their products and conduct business.
Eg : E-commerce business model helps to gain good profit margin as it focuses on making user interaction easier.
Related terms : MLM, Products, Marketing Plan
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Ecommerce integration:The selling and buying of products and services through the blending of online shopping with direct selling.
Eg : Distributors share product links, and customers buy directly online.
Related terms : E-commerce, Replicated website, Conversion rate
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MLM integrated Ecommerce: A high-yield collaboration for business profitability
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Emerging markets:As the name suggests, emerging markets are nations whose economies are undergoing rapid growth and expansion but not yet fully developed.
Eg : The company expands to Peru as middle-class income rises and demand for health products grows.
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Global direct selling in 2026: Growth hotspots in a shifting $167 billion market
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Engagement rate:The number of people who took part in activities like training sessions, sales efforts, and events.
Why it matters in direct selling : When more distributors stay involved, it usually means they are motivated and active. This often leads to better sales, stronger retention, and improved team results.
Eg : About 60% of distributors join the monthly webinars.
Related terms : Training, Team, Network, Retention rate
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Enroll:Enroll refers to the adding or joining of new members into the MLM industry. Each new enrollee can enroll or add new members under him/her.
Eg : When a new member is enrolled, he/she can sell the products and services of the belonging company.
Related terms : Recruit
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How AI-integrated MLM software can improve distributor onboarding in direct selling
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Enrollment:The process of signing up a new distributor or customer into the system.
Why it matters in direct selling : Enrollment helps to expand the network. Also, it is the first step in building a distributor’s team and customer base.
Eg : With the use of a referral link, a new distributor will register and become part of your team.
Related terms : Enroll, Onboarding, Distributor, Network, Recruit
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Enrollment package:The initial package a distributor has to buy in order to join as a distributor for an MLM organization.
Eg : Each enrolment package has unique prices, and benefits vary accordingly.
Related terms : Distributor, MLM, Organization
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Entrepreneurial ecosystem:The entrepreneurial ecosystem is a blend of social, economic, and political factors that influence the development of entrepreneurs and small businesses.
Eg : When unemployment is high and communities are closely connected, people often rely on MLM for their main earnings.
Related terms : Network marketing, Business builder, Independent distributor
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Enterprise management:An Enterprise Management System (EMS) is a software package that supports the various requirements of complex organizations.The software allows personnel to manage multifaceted companies whose infrastructures are often scattered geographically.
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E-pin:E-Pin is an innovative payment system that allows MLM recruits and businesses to enable a highly secured option to gather payment.
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Ethical business:Doing business, following ethical business standards is referred to as an ethical business. A distributor should not make fake promises or false statements that mislead the customers or sales prospects.
Eg : Ethical business is staying away from unethical business methods.
Related terms : MLM, Network marketing, Marketing materials
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How to ensure compliance in direct selling business: A checklist to follow
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Fast start bonus:The initial bonus paid as an incentive to a distributor when a particular level of sales or recruitment goal is achieved in the initial month with the company.
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Federal appeals court:These are appeal courts that review the decisions that are made by the lower courts. It will investigate whether the law is fairly applied by the lower courts.
Why it matters in direct selling : These courts will take necessary actions to solve the constitutional disputes involving direct selling companies.
Eg : When a company experienced a loss at the lower level, it can appeal to the federal appeals court.
Related terms : Compliance Monitoring, Ethical business, Enterprise management
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Field Auditing:Its the process of monitoring and recording distributor actions to ensure compliance and ethical standards.
Why it matters in direct selling : It helps catch rule-breaking early and makes sure distributors present the company and its products correctly during live or in-person selling.
Eg : Attending a home presentation to check if everything follows company policies.
Related terms : Distributor, Ethical business, Enterprise management
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Field leadership:The top-performing distributors who lead, train, and guide their teams rather than just selling products.
Why it matters in direct selling : Strong leaders in the field help others learn, earn, stay motivated, and perform consistently. This is important for the better growth of the business.
Eg : A regional leader who runs weekly training calls for their team.
Related terms : Leader, Team, Training, Leadership bonus
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FOIA (Freedom of Information Act):The Freedom of Information Act is a US law that lets people request access to certain records held by federal agencies.
Why it matters in direct selling : People like journalists, lawyers, and compliance teams can use FOIA to get information about investigations, enforcement actions, or communications from agencies such as the Federal Trade Commission. This helps bring more transparency to how companies are being reviewed.
Eg : A lawyer filed a FOIA request to check if the agency had received official consumer complaints about the company.
Related terms : Ethical business, Enterprise management, Compliance Monitoring,
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Follow-up:It is a process of taking continuous effort to bring a prospect into the business convincing them about the company and its benefits.
Eg : Educating the prospects and follow- up them with best presentations and unique methods will bring more prospects into business.
Related terms : Prospects
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Forced matrix:A Forced Matrix is a system where the marketer limits the number of referrals their affiliates can refer.
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Frontline:A distributor who is directly under a specific distributor in the downline.
Eg : MLM companies reward the distributors for recruiting new members in the front-line.
Related terms : Upline
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Funnel:A structure through which leads could be guided to becoming customers or distributors.
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Genealogy:Genealogy is a tree-like structure to represent the downline members under a distributor. It includes the members you recruit and the ones recruited under them. A distributor can get the details regarding the enrollees from the genealogy also they can have a calculation about the commissions too.
Eg : Genealogy is a graphical representation of the member structure from sponsor to the downline members in an MLM company.
Related terms : Strong leg, Weak leg, MLM
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Group volume:The total sales volume or all purchases generated by a distributor’s whole team is termed as group volume.
Eg : A distributor's and the team's total purchases or business is considered as group volume and commissions are paid based on it.
Related terms : Personal sales volume
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Growth market:A business environment where rapid and strong growth creates high potential for sales and profits.
Eg : Mexico can be viewed as a growth market because more people are looking for additional income opportunities.
Related terms : Emerging markets
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Hybrid:A compensation plan that has the features of two or more plans. As this plan provides the benefits of more plans, the Hybrid plan offers high-income opportunities to the members.
Eg : Hybrid plan allows the MLM company to make high benefits as it is a combination of different plans.
Related terms : Compensation plan, Binary, Unilevel, Matrix plan
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Headhunting fees:Commission paid for recruiting new members to the network.
Eg : Some organizations stress on recruitment with a headhunting fee for each new recruit the distributor brings in.
Related terms : Commission, Network, Organization, Distributor
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Heavy hitter:A leader who generates large sales volumes and creates bigger teams consistently.
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Home meeting:It is a meeting held at distributor's home to create new opportunities. This would be the first presentation for new distributors to family and friends.
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Hotel meeting:It is a meeting held in a hotel room to create newer opportunities.
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Inactive:The enrolled or recruited members who are not making enough effort or not bringing enough sales can be called as inactive members in MLM.
Eg : If the team under a distributor is inactive, it will also reflect in the distributor's income.
Related terms : Active
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Incentive:For motivating the distributors for more business, the companies give special rewards or bonus considering their increase in the sales volume and the increase in the number of new recruits. This is referred to as incentives. This will help the distributors to bring more business.
Eg : Incentive will encourage the distributors for bringing more business by increasing the sales volume.
Related terms : Bonus, Commissions
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Income Claim:A statement about how much money someone could earn from the business.
Why it matters in direct selling : If these claims are exaggerated or not proven, they can cause legal trouble. So, it’s important to keep them accurate and backed by facts.
Eg : Saying “You can easily earn $10,000 a month” is an income claim and needs proper proof.
Related terms : Scam, Ethical business, Compliance Monitoring
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Independent distributor:A distributor who introduces the company’s products to the people through proper marketing channels and finds the customers to buy the products directly are independent distributors.
Eg : Independent distributors sell products and services through the marketing approaches followed in MLM industry.
Related terms : Distributor, Product
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Infinite bonus:Considering the total group volume of the team or organization, an additional commission is paid to the distributors beyond the normal commission paid as per the compensation plan. This bonus structure is good to get help from the up lines and one needs to provide help to the downlines.
Eg : Infinite bonus is paid to distributors in MLM industry for their higher rank and on total group volume.
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Injunction:A court order that tells someone to stop doing something or to take a specific action.
Why it matters in direct selling : Regulators may use this to stop things like misleading earnings claims, product claims, recruiting practices, or autoship charges.
Eg : The regulator asked for an injunction to stop misleading business opportunity claims.
Related terms : Compliance monitoring, Ethical business, Enterprise management
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Inventory loading:Purchasing of stock initially as enrollment packages by distributors which cannot be sold out completely.
Eg : Inventory loading is a mandatory rule set by MLM companies to clear off their inventory by dumping it on the distributors.
Related terms : Enrollment packages, Distributors, MLM
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Infinity bonus:An incentive paid to distributors when they achieve a level of success and maintain the same for a longer time period.
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Informal economy:The informal economy refers to that part of national economies comprised of small businesses and activities that are not regulated or taxed by government authorities.
Eg : Without any formal business registration, a distributor can sell skincare products in their neighborhood and receive cash payments.
Related terms : Direct selling, Independent distributor
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KYC (Know Your Customer/Distributor):A process to verify a person’s identity and make sure they are genuine.
Why it matters in direct selling : It helps prevent fraud, follow legal rules, and build trust and make sure that everyone in the business is real and accountable.
Eg : Asking for ID verification during onboarding.
Related terms : Cybersecurity, Distributor, Ethical business
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Landing page:A webpage that a lead will be redirected to when they click on a particular ad or a link.
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Leader:A top achiever /distributor who recruits new members into his/her team or organization, and ensures they are well trained about marketing and product selling are made leaders by the company. These leaders are motivated by the company through rewards.
Eg : Leader trains and supports the members in his/her team , talking to new prospects about the products and services and build the team.
Related terms : Team, Upline, Sponsor
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Leg:The downline under one of the downlines headed by a frontline distributor is referred to as a leg.
Eg : MLM plan structure begins with legs, right and left legs.
Related terms : Strong leg, Weak leg, Downline
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Lead generation:The process of generating leads by converting prospects into new potential members through different methods.
Eg : Lead generation helps a distributor to contribute more in the business.
Related terms : Prospects, Prospecting
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Level:When a new member is enrolled, he/she will be vertically placed under you in the first level. These new enrollees can recruit more and can be placed under them. They will become your second level.
Eg : The distributor network in MLM is expanded to different levels and payouts or commissions are paid according to the levels.
Related terms : Commission, Downline
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Leverage:The combined effort of a network of members that creates a positive impact on the network marketing business as a whole.
Eg : Levarage in MLM is what can make or break the business.
Related terms : Network marketing, MLM, Network
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Leadership bonus:The bonus paid to a distributor who attains a particular leadership position within the company.
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Lead: A prospective customer or recruit for an MLM company.
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Lifetime Value (LTV):The average revenue that a customer or distributor generates throughout their lifetime with the business.
Why it matters in direct selling : It helps companies understand the value of a customer or distributor and the way they thrive through better compensation plans. Also, this will help make better decisions about recruitment and retention.
Eg : If a distributor sells $5,000 over 2 years, their LTV is $5,000.
Related terms : Customer Acquisition Cost (CAC), Retention rate
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Local leadership:Letting people from the country take charge and lead.
Eg : A top distributor in Brazil starts giving national training sessions and guiding new members to the business.
Related terms : Leader
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Logistics infrastructure:The network of systems and facilities that store and deliver products.
Eg : A company opens a warehouse in Panama to speed up deliveries across Central America.
Related terms : Dropshipping, Inventory loading
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Matching bonus:The bonus paid to a distributor depending upon the sales and commissions earned by their downline.
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Market entry strategy:These are the necessary steps, resources, and methods a company uses to enter new markets.
Eg : The company partners with a local delivery service and changes its pricing to match Colombian customers’ budgets before launch.
Related terms : Growth market, Emerging markets
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Marketing plan:MLM business follows a plan to make the business established. It is according to this plan the distributors add new members and bring new business. It is otherwise known as a compensation plan.
Eg : It is the chosen marketing plan that decides the commission or bonus to be paid to the distributor.
Related terms : Compensation plan
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Marketing materials:In order to bring awareness about the company and the products, certain promotional tools need to be used. These include brochures or any kind of training videos which clearly detail all the information about the product and services.
Eg : Marketing materials are the tools that help to grow an MLM business.
Related terms : Compensation plan
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Market resilience:The capacity of a market to recover quickly from the losses caused by tough economic times.
Eg : Even when the currency changes, people still buy everyday products, so sales stay steady.
Related terms : Market entry strategy, Emerging markets
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Matrix plan:Matrix plan is one of the popular compensation plans where a limited number of members can be recruited at each level. But it will not restrict the number of recruits a distributor can totally have. The additional members can be added to the next level and complete the matrix.
Eg : Compensation in Matrix plan is calculated with a formula of width *depth.
Related terms : Hybrid
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Matrix:A matrix is a pyramid structure where employees/team members are arranged into a fixed number of rows and columns.
Related terms : Pyramid Scheme
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Minimum Personal Volume (MPV):The minimum sales threshold a distributor needs to qualify for commissions.
Why it matters in direct selling : MPV makes sure distributors stay active in selling products, instead of depending only on recruitment.
Eg : You need to generate ₹3,000 in sales each month to stay eligible for commissions.
Related terms : Personal sales volume, Qualified, Monthly volume requirements
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MLM:A business opportunity that helps people to earn a good income apart from traditional jobs. MLM is a marketing strategy where the company can sell the products and services to the customers through word of mouth marketing with the help of distributors who gets a commission for the business they do. The distributors get a commission based on the compensation plan opted by the company. Network marketing is the alternate term used for MLM business.
Eg : MLM is a marketing strategy where the ones enrolled in to this marketing can earn profits based on the efforts they make.
Related terms : Network marketing, Compensation plan, Bonus
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Momentum:It is the rapid growth period where sales and the introduction of new customers and distributors accelerates rapidly.
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Monthly volume requirements:It is the manadatory sales volume that a distibutor has to produce inorder to reach a commission milestone.
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Multi-level marketing:See MLM
Eg : Multi-level marketing companies sell goods and services through a network of distributors.
Related terms : Network marketing, Compensation plan, Bonus
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Network:Group of members working under the same upline or sponsor or those promoting products for the same organization.
Eg : Smart and reliable MLM network is a key factor that contributes to the growth of an organization.
Related terms : Upline, Downline, Sponsor, MLM, Organization
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Network expansion:The process of recruiting new members into the existing network infrastructure to increase team capacity and the customer base.
Eg : A team grows from 50 to 500 people in a year through referrals and social media.
Related terms : Recruit, Downline, Team
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Network marketing:See MLM
Eg : Network marketing is also referred as MLM or direct selling business where a network of distributors bring business and earn benefits.
Related terms : MLM, Compensation plan, Bonus
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Network marketing leads:The active members who have a great interest in network marketing and consider this as a good business opportunity and will have much interest in products and services.
Eg : Good network marketing leads will bring you good results enhancing earning opportunity.
Related terms : Leader, Opportunity meeting
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Opportunity meeting:A business meeting to make the people aware of MLM business opportunities and give a chance to have a better understanding of the company, its products, and its services.
Eg : Hosting opportunity meeting in a well organized way considering the cold market and warm market prospects will results good.
Related terms : Prospecting, Prospects
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Override:The monthly commission one receives from the business of the breakaway legs.
Eg : The sponsor or upline can receive an override commission on the sales efforts of the downlines.
Related terms : Stairstep breakaway, Breakaway
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Organization:Organization refers to the team of members including the leader and the downlines in a network marketing business. We will be able to receive the commission from the downlines business.
Eg : The team of members including the leader put enough efforts to build the organization strong.
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Onboarding:Getting a distributor on to your team.
Eg : Distributor onboarding in direct selling should be done strategically.
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Onboarding funnel:The steps that help a new recruit move from signing up to becoming active in the business.
Why it matters in direct selling : A good onboarding process helps new distributors stay involved, learn the business faster, and start working with confidence.
Eg : Training → first sale → building a team.
Related terms : Onboarding, Funnel, Training, Retention rate, Recruit
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Passive income:The income earned by a member or a distributor for the effort of the downlines where the member doesn’t need to put much effort. The income is based on how bigger he/she build the team. Passive income is also known as residual income.
Eg : MLM business is one of the best ways to earn passive income.
Related terms : Residual income
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Payout:The distributors receive commissions and bonuses for their and their downline’s business. These commissions are paid out by the company by sharing a percentage of the company’s total revenue.
Eg : The distributors will get a share or percentage of company's profit as payouts when they bring business to the company.
Related terms : Commissions, Residual income
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Pay plan:The pay plan is the alternative term for compensation plans in the MLM business.
Eg : According to the chosen pay plan, the distributors will be paid commissions.
Related terms : Compensation plan, MLM
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Penetration rate (Market penetration):This measures the rate at which a product or service is being used by consumers compared to its target market.
Eg : If 2 out of 100 people are distributors, the penetration rate is 2%.
Related terms : Conversion rate
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Personal sales volume:The total sales volume of a distributor in a month which includes the distributors' personal purchase and customer’s purchases.
Eg : Distributor's monthly payout will be based on the personal sales volume.
Related terms : Group volume
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Personal Volume (PV): The total sales made by a single distributor.
Why it matters in direct selling : PV is important because it’s used to calculate earnings, track performance, and decide when someone qualifies for higher ranks.
Eg : If you sell products worth ₹20,000, your Personal Volume (PV) is ₹20,000.
Related terms : Personal sales volume, Group volume, Commission, Qualified
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Personal volume (PV) (update): The total amount of products and services an individual salesperson or distributor personally sells and purchases in a given month.
Why it matters in direct selling : Through personal volume one can measure commissions, rank progression, and performance of each individual within the compensation plan.
Eg : When a person sells $500 worth of products in a month, it will be equal to 500 PV.
Related terms : Personal sales volume, Commission, Rank advancement, Qualified
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Prelaunch:A period of months during which a company sets itself up and creates a major marketing push prior to its official launch.
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Predictive Analytics:The method of determining future performance through current and historical data using statistics and other techniques.
Why it matters in direct selling : It helps companies understand distributor behavior, improve retention, and spot problems early.
Eg : Using past activity data to predict which distributors might quit soon.
Related terms : Automation, Digital transformation
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Product:The goods that are offered by an MLM company for the purpose of selling it to consumers. The company offers products of different categories which include cosmetics, nutritional supplements, clothing, toys, etc. By adopting different marketing tactics the distributors make the product reach the customers and earn commissions for their sale.
Eg : MLM companies sell unique products which are not available in retail shops through distributors.
Related terms : Distributor, Residual income
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Product Claim:An assertion a company holds about a product's benefits, performance, or characteristics.
Why it matters in direct selling : These claims must follow legal rules. If they are false or exaggerated, they will be subjected to legal trouble, fines, and loss of trust.
Eg : Saying a supplement “cures diabetes” is not allowed.
Related terms : Product, Ethical business
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Prospect:A potential customer or distributor who has some interest in MLM. A prospect can show interest in buying the product from the company or he/she can be a part of the business and become a distributor.
Eg : Converting prospects into customers will help the distributors to expand their team and improve their business.
Related terms : Prospecting
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Prospecting:The process of finding new prospects and bringing them into the business through personalized calls and emails and follow-ups until those prospects become active members.
Eg : Through prospecting a distributor can bring new members to his/her team and widen the team.
Related terms : Prospect
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Pyramid scheme:Unlike MLM or direct selling, the pyramid scheme offers no actual product or services. The people who join a pyramid scheme are offered payments for enrolling new members. The people who join in the beginning make money but there is no guarantee for the money and hence it is considered as a scam.
Eg : Pyramid scheme is an illegal way of making more people enrolled into a business through fake promises.
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Pyramid scheme: Its cause and effect on society, and the direct selling industry
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Qualified:Each member or distributor will have a target to achieve. Personal sales volume and each member needs to recruit a certain number of new recruits each month in order to remain qualified.
Eg : A distributor who achieve the target sales will be qualified for the commissions and bonus.
Related terms : Personal sales volume
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Rank:The position given to a distributor in the company structure based on their sales and downline volume.
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Rank advancement:The process by which a higher rank is achieved in the company hierarchy.
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Recruit:A person who is enrolled as a member of an MLM company to sell the products that the company offers is a recruit. The recruits are paid a commission for the business they bring to the company.
Eg : A team member in an MLM organization is recruit.
Related terms : Downline
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Referral marketing:MLM products are mostly marketed or promoted through word of mouth marketing. When a customer uses a product and satisfied he/she is asked to recommend the products to prospects and encourage them to become customers or join the team.
Eg : Using personal relationships products are marketed in referral marketing.
Related terms : Word of mouth
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Regulatory oversight:The process of conducting hearings, investigations, and audits to make sure that government programs are implemented as intended by law.
Why it matters in direct selling : The MLM industry is facing many problems related to advertising, compensation, and consumer protection. Because of this, the concept is very important in the industry.
Eg : Direct selling companies need business systems that can withstand tough regulations.
Related terms : Compliance Monitoring, Ethical business, Enterprise management
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Required purchase misrepresentation:It refers to the way of making false statement to get people to buy something which they don't actually require or need.
Why it matters in direct selling : This often happens when recruits are told they must buy starter kits, training tools, monthly autoship, or event tickets to join or succeed. Even though it’s not really needed.
Eg : Compliance team found that some leaders wrongly told new recruits they had to buy the premium starter kit to get started.
Related terms : Enrollment package, Autoship, Product
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Remediation:Steps taken to fix a problem after a rule is broken.
Why it matters in direct selling : It helps reduce legal risk, keeps standards strong, and protects the reputation of the network.
Eg : Taking down a misleading post and warning the distributor.
Related terms : Ethical business, Cybersecurity
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Removal protection:A rule that limits when certain government officials can be removed from their position.
Why it matters in direct selling : This can come up when companies question whether regulators or administrative judges have too much protection from oversight.
Eg : The lawsuit challenged whether the protections given to administrative judges were lawful.
Related terms : Compliance monitoring, Ethical business, Enterprise management
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Replicated website:A replicated website is the reproduced website template created for business purposes. Multiple users will have the same website with the same website content and information but with different user names and profiles. This helps a company to ensure strong web presence and achieve the targeted business growth.
Eg : Replicated website is created to give each member a personalized website to bring maximized results.
Related terms : Business builder
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Residual income:The income earned with much less effort and with less participation. The income is generated through building or expanding your team.
Eg : Through sale of products and services and by generating repeat sales, a distributor earns residual income.
Related terms : Passive income
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Respondent:Respondent is the party who is required to respond to a court order or petition filed.
Why it matters in direct selling : When it comes to an FTC administrative matter, the direct selling company and sometimes its executives may be named as respondents.
Eg : The FTC listed the company as the respondent in the case.
Related terms : Distributor, Ethical business, Enterprise management
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Retail:The distributors can buy the products for a wholesale rate and resell it to the customers taking a margin. This process of taking profit, making it an income opportunity is referred to as retailing. The distributors try to reach out to more customers so that they can make those customers buy the products and get qualified.
Eg : The distributors get the products in a wholesale rate and resell them to the buyers in a retail rate.
Related terms : Products
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Retention rate:Retention rate is the percentage of distributors or members who continue to stay with the company as active members. If the retention rate is high, it is an indication of a profitable MLM business.
Eg : Retention rate is calculated by counting the active members in the business.
Related terms : Active
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Risk Scoring:The process of assigning a risk level to distributors based on their behavior, activities, and patterns.
Why it matters in direct selling : It helps spot potential problems early, so companies can focus on high-risk cases and avoid rule violations.
Eg : A distributor may get a high-risk score if he made aggressive income claims online.
Related terms : Cybersecurity, Ethical business, Enterprise management
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Salesforce:A distributor network working for an MLM company.
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Sales Velocity:How quickly products are sold through the distributor network.
Why it matters in direct selling : It shows the strength of demand and the effectiveness of the network. It also helps companies plan stock, spot popular products, and improve sales strategies.
Eg : If a product sells out in 2 weeks, it has high sales velocity.
Related terms : Product, Personal sales volume, Group volume
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Scam:A scam is an illegal way of enrolling new members into a network without offering any product or services. The members of this scheme earn from the enrollment fees of the new recruits. Ponzi scheme and Pyramid scheme are the popular scams in the MLM business.
Eg : Though MLM is a legitimate business, people often misunderstood it as a scam.
Related terms : Pyramid scheme, MLM
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Sentiment Analysis:Reviewing communication tone to understand public perception, especially on social media.
Why it matters in direct selling : It helps companies understand how distributors feel, spot dissatisfaction early, and protect the company’s reputation.
Eg : Noticing negative comments from distributors on social media about the company.
Related terms : Digital transformation, Target audience
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Settlement:An agreement to resolve a legal or regulatory issue without going through a full trial.
Why it matters in direct selling : A settlement can include refunds, changes to business practices, proof for claims, or updates to distributor incentives.
Eg : The company chose to settle the case to avoid a long legal process.
Related terms : Compliance monitoring, Ethical business, Distributor
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Seventh Amendment Right to Jury Trial :The right in some civil cases to have a jury decide the facts instead of just a judge.
Why it matters in direct selling : This can matter when regulators try to impose penalties or handle cases through their own internal process.
Eg : The company argued that the case should be decided by a jury, not only by the regulator’s internal system.
Related terms : Compliance monitoring, Ethical business, Enterprise management
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Sign up:Sign up refers to signing up or enrolling as a member of a network marketing company. While joining or signing up, the member will receive a product kit which is equivalent to the enrollment fee.
Eg : The people or members who sign up under you in your team becomes your downline.
Related terms : Marketing materials, Downline
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Spillover:In some compensation plans, the number of members that can be placed to your frontline is fixed or limited like in Monoline, Binary or Matrix. When the upline wants to place a new member beyond that limit, he/she can place the new member under his/her downline. This process of placing new members under your downline by your upline is referred to as spillover.
Eg : Spill over helps to develop the team with the teams efforts and the sponsor as well as the downline benefits from it.
Related terms : Binary, Compensation plan
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Sponsor:When a distributor or a leader who personally enroll or recruit new members to his/her team as a downline, then that distributor becomes the sponsor of the newly enrolled member or the new downline.
Eg : Sponsor helps a distributor to build a business and will be responsible to train the ones he/she recruits.
Related terms : Leader, Upline, Frontline
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Sponsorship:The process of roping in new distributors into an MLM company.
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Stairstep breakaway:Stairstep breakaway is a compensation plan where a member or distributor can break away from the team on achieving a certain level. When the target sales volume is achieved the distributor moves a step up and can break away from the upline or sponsor’s team.
Eg : Building bigger team and getting good compensation rate is the advantage of the stairstep breakaway plan.
Related terms : Breakaway, Compensation plan
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Starter Kit:A package that new distributors buy to get started with the business.
Why it matters in direct selling : It usually includes the basic tools, product samples, and training materials needed to begin selling and building the business.
Eg : A ₹7,500 starter kit that includes products, brochures, and training materials.
Related terms : Enrollment package, Onboarding, Business builder
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Stay/stayed proceedings:It's a formal court order to pause a legal case temporarily. The case will not be dismissed, but the hearings, trials, and other related processes will be interrupted.
Why it matters in direct selling : A company may request a temporary pause in one case until a related case is resolved.
Eg : The administrative case was stayed while the constitutional challenge moved forward in federal court.
Related terms : Compliance monitoring, Ethical business, Enterprise management
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Strong leg:A leg in MLM refers to the member added under a distributor. A distributor will have two legs; a strong leg and a weak leg. The strong leg will grow as the new members will be added in this leg in order to achieve more commissions.
Eg : Strong leg generates more volume as this leg is an important factor in the long time success of the MLM business.
Related terms : Compensation plan, Binary
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Stockpiling:The practice of stocking products overstock than one can sell in order to achieve the target and to get qualified for more commissions.
Eg : Without enough orders some distributors stock pile the goods which is not a recommended practice in MLM.
Related terms : Products
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Target audience:The group of people who might be interested in a company’s product or services and to whom one can market the products.
Eg : Identifying the target audience and offering the product and services to fit their needs is important in the MLM industry.
Related terms : Prospect, Cold market, Marketing materials
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Team:The people or members who are recruited in a network marketing company. A team includes the members recruited by a distributor and the recruits of this distributor. An upline may not know each member of the team, as members are not directly recruited by this leader.
Eg : As one build one's team big, bigger will the commissions earned.
Related terms : Leader, Distributor, Frontline, Sponsor
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Team Volume (TV):The total sales made by a team (downlines).
Why it matters in direct selling : TV is used to calculate your commissions, track your rank growth, and determine any leadership bonuses.
Eg : If your team sells products worth ₹5 lakh, that becomes your Team Volume (TV).
Related terms : Group volume, Team, Downline, Commission
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Tele conference:A conference held over the phone with distributors dialing in from any location. Teleconferences are often used when relaying major news or creating a major push to bring in new team members and customers.
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Temporary Restraining Order (TRO):A short-term emergency court order that quickly stops something before a full hearing takes place.
Why it matters in direct selling : TROs are used in urgent cases, like stopping misleading promotions, freezing payments, shutting down websites, or limiting distributor activity.
Eg : The agency asked for a TRO to stop ongoing deceptive promotions right away.
Related terms : Ethical business, Compliance Monitoring, Scam
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Three way calls:Used as a training method and prospecting technique, a three-way call allows a team member to bring a more experienced colleague into a conversation with a prospective team member. The experienced team member explains the business and answers questions, which helps instill confidence in both the new distributor and the prospect.
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Training:Training in the MLM industry focuses on the overall development of distributors enabling them to achieve business by winning clients. Through training, an individual acquires enough knowledge and skills that help in the overall development.
Eg : Proper training helps the distributors to remain active and will be able to utilise the skills to achieve more business.
Related terms : Leader, Sponsor, Marketing plan
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Unauthorized charge:A purchase charge made to a customer without their clear permission or awareness.
Why it matters in direct selling : This can happen with autoship plans, signup packages, replicated websites, subscription tools, or event bookings.
Eg : A customer was put on a monthly subscription without knowing about it, and they were charged every month.
Related terms : Autoship, Ecommerce, Product
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Unilevel:Unilevel is one of the simple compensation plans that allow a distributor to recruit unlimited members to the frontline. Width is not limited and hence it will encourage the distributors to recruit a large number of members to the frontline and allows their downlines to do the same.
Eg : Uni-level compensation plan allows a distributor to add unlimited members into the front-line.
Related terms : Compensation plan, Frontline
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Upline:In an MLM business, all the people or distributors above you are uplines. When further explained, an upline is a person who recruits a new member as a downline.
Eg : Uplines help the downlines to find new prospects and develop the team.
Related terms : Sponsor, Downline
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Upselling:A sales technique where a seller invites the customer to purchase more expensive items, upgrades, or other add-ons to generate more revenue.
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Unjust enrichment:An unfair trade practice that pays unlimited levels of commissions to distributors benefitting those at the top.
Eg : Unjust enrichment leads to the collapse of the business resulting in financial loss for those at the lower levels.
Related terms : Level, Commission, Distributor
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Volume Points (VP):A point value given to products, used to calculate commissions.
Why it matters in direct selling : VP helps keep things consistent across different products and regions and makes it easier to calculate earnings.
Eg : A product priced at ₹1,000 might be assigned to 100 VP.
Related terms : Commissionable volume, Bonus volume, Personal sales volume
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Upline:In an MLM business, all the people or distributors above you are uplines. When further explained, an upline is a person who recruits a new member as a downline.
Eg : Uplines help the downlines to find new prospects and develop the team.
Related terms : Sponsor, Downline
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Upselling:A sales technique where a seller invites the customer to purchase more expensive items, upgrades, or other add-ons to generate more revenue.
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Unjust enrichment:An unfair trade practice that pays unlimited levels of commissions to distributors benefitting those at the top.
Eg : Unjust enrichment leads to the collapse of the business resulting in financial loss for those at the lower levels.
Related terms : Level, Commission, Distributor
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Warm list:A list of contacts that includes your friends, family, and close acquaintances that is used to determine which ones can be approached regarding your business, product, or service.
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Weak leg:In binary compensation plan, a distributor has two legs; weak leg and strong leg. He/she can add two members in his frontline to his right and left. The weak leg is shorter leg with fewer members than the strong leg. A distributor has to balance these legs. Otherwise, the commission is paid based on the business of the weak leg. Hence it is also termed as money leg.
Eg : Weak leg generates less volume of sales and is considered for payouts.
Related terms : Binary, Compensation plan
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Webcast or webinar:An online presentation that distributors, prospects, and customers can view live online instead of having to travel to hear the presentation. Many webcasts are also recorded, making them a valuable training tool.
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Wholesale pricing:This is a lower price given to distributors so they can buy products and resell them for profits.
Why it matters in direct selling : It helps distributors make a profit with prices attractive to customers.
Eg : If a product is bought at ₹800 (wholesale) and sold at ₹1,000 (retail), the distributor earns ₹200 profit.
Related terms : Retail, Distributor, Product
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Width:The number of people that your company compensation plan dictates you can have on your first level. In some cases it is limited to two, and in many there are no limits.
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Word of mouth:In MLM business, marketing of the products is mainly done by word of mouth. A distributor directly sells the product to the customers and when a customer uses a product and gets satisfied, he/she will refer it to his/her family and friends. This way of oral marketing is known as word of mouth marketing.
Eg : Word of mouth marketing is one of the best ways of marketing products in MLM industry.
Related terms : Marketing plan, MLM
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Workforce entry growth:Workforce entry growth refers to an increase in the number of people joining the job market.
Eg : When many young adults start looking for work, more of them explore flexible income options.
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