For a beginner in the network marketing, understanding of the business terminology and principles is very important. The same terminologies are used in MLM Marketing software also. Let us see some of the terms and try to understand…
Distributor: A sales representative of an MLM company who has signed up an agreement with the company and pays a certain amount of fee. It is the member, who not only sells the products and services but also build his own team by recruiting other sales representatives under him. He/she is not the salaried person of the company, but he earns from the profits of selling the products/service of the company. Thus they are the independent business owners working in partnership with the MLM Company.
Sponsor: A sponsor is a member of a network who recruited another member in the same network. In the above diagram, A is the sponsor for A1 and A2. So, A can say he has sponsored two members A1 and A2. He may either be the leaders or a distributor.
Directs: The members which are sponsored in a network by an existing member of the same network. As in the diagram, A1 and A2 are directs of A. A3 and A4 are directs of A1and so on….
Downline: It is the entire group of members, distributors have recruited under him. Here in the above diagram, A1, A2, A3, A4 are the part of the downline of A. Sales and referrals done by A1, A2, A3, and A4 also generates income for A.
Upline: It refers to sponsor who recruited you and all the above members in the same line. As in diagram, A1, A is the upline of A3. It has same meaning as your sponsor and your sponsor’s sponsor and so on or your immediate boss and all the above big bosses.
Sideline: Members of the same network as yours but they are not in your downline or upline. In above diagram A2 comes in A3’s sideline.
Frontline: Frontline consists of the members which are directly recruited by you. There is no one between them and you. They will benefit you the most out of sales done by them.
Genealogy/Tree: It refers to the entire tree structure represented in a graphical form of the members in a downline who share the same goals of marketing & selling the main MLM Company’s products or services. They may or may not be in direct touch with each other. Each member keep records of their genealogy namely name, phone number, address, email id, their status etc. and generate reports as and when required. In network marketing, more the members, better it is. As it generates more income for main leader because he earns commissions and residual income from the business done.
Level: The vertical position of the member is known as the level. The first set of sponsored members are at level 1, their sponsored members will come at level 2. In above diagram, A1 & A2 are at level 1 and A3 & A4 are at level 2.
Leg: Each member you sponsor forms a leg in your downline. In above diagram A1 and A2 are on two leg – left & right of A. Further, A1 and A2 will recruit members under them and form legs for you.
Width: How broad your network is at first level.
Depth: Number of levels your network is going.
We will further see some more glossary terms in next part….