Glossary

ABC is a business analysis tool used in marketing to classify the importance of product groups or products according to percentage points of a company's total sales volume. Product groups and products rated category "A" should always be included in marketing measures.

In business terms, an accounting month is the period in which commissions are calculated and paid to distribution partners.

In direct selling or multi level marketing, activity criteria such as a minimum sales target per month can be laid out in the compensation plan. Distribution partners are referred to as 'active' when achieving the target in the current accounting month. Commissions calculation and payment requires activity.

Active income refers to income generated directly by a distribution partner via sales or by initiating sales deals.

An activity criterion is a benchmark which, for instance, describes which turnover over the last accounting period needs to be achieved in order to be entitled to a bonus.
synonyms: qualification threshold

Affiliate marketing systems are internet-based sales strategies whereby providers make their advertising material available to affiliates. Affiliates can use this material on their own websites or distribute it via other advertising avenues such as email marketing. Affiliates are remunerated by commission when a sale takes place due to the advertising material used.

The US American Association for network marketing professionals, the self-declared leading association of network marketing professionals worldwide. It functions as umbrella organisation for merchants, entrepreneurs and executives as well as strategic partners for the network marketing sector.
synonyms: Association of Network Marketing Professionals

See ANMP
synonyms: ANMP

A different type of binary plan.
synonyms: Australian MLM Binary Plan

A further type of the Pass-Up Plan. See Pass-Up Plan
synonyms: Australian MLM X-Up Plan

See Carbonus
synonyms: Carbonus

In it`s role as association for direct selling, the BDD, already in existence in 1967, represents the interests of companies whose marketing policy focuses on direct customer approach. The association's main objective is the positive positioning of this sales philosophy in the public as well as the promotion of its members' independent sales.
synonyms: Bundesverband Network Marketing e.V.

A binary compensation plan is the type of marketing plan limiting the Firstline to 2 partners whereby commissions will be paid to either one or both lines.
synonyms: Binary Plan, MLM Binary Plan

See Dinner Party

In business terms, 'bonus' refers to a form of compensation in the form of free add-ons granted to customers after the achievement of a certain volume of sales.

See Generation Bonus
synonyms: Generation Bonus

Breakage refers to the personal sales volume or the sales volume of the downline no compensation is paid for.

Breakaway describes a possible scenario as laid out in compensation plans. When a distribution partners achieves certain targets (e.g. sales targets or targets for the number of active distribution partners in the downline) over a certain period of time, they have the option of rising to the sponsor's level and thus developing himself as well as his downline.

See BDD
synonyms: BDD

See BVNM
synonyms: BVNM

BVNM or Bundesverband Network Marketing e.V. represents the interests of network marketers and their sector in all German-speaking regions. BVNM is mainly active in Germany and Switzerland. The association's main objective is to explain network marketing and to supply objective information on the topic.
synonyms: Bundesverband Network Marketing e.V.

A Carbonus is a further income category that can be established in compensation plans. Here, the distribution partners usually have to meet permanent targets such as turnover targets or targets for the size and activity of their own network over a longer period of time in order to qualify for further commissions or even for the co-financing of their own car.
synonyms: Autobonus

The rank you achieved as a distribution partner and which you currently range at.
synonyms: Rank

See Compensation Plan
synonyms: Marketing Plan, Compensation Plan, Reward Plan

Commission normally refers to the remuneration a company pays to distribution partners when sales have been made for the company. In network marketing, commission has a broader meaning as it does not only refer to sales effected by distribution partners themselves, but also to sales effected by other distribution partners recruited by the aforementioned first distribution partner or again by distribution partners recruited by recruited distribution partners. The amount of the commission is based on the regulations laid out in the compensation plan.

The compensation plan or marketing plan is the unique feature of companies in direct selling and mulit level marketing. The marketing plan set up by the companies defines qualification and compensation proceesses. An MLM software used for administrative and accounting purposes should have no specifications or restrictions regarding the computer system; instead it has to be able to display any product-specific characteristics and special features.
synonyms: Carreer Plan, Marketing Plan

See Distribution Partner
synonyms: Distribution Partner, Partner

See Partner Area
synonyms: Distribution Partner Area, Partner Area

In Multi Level Marketing, a crossline refers to distribution partners of your business that are not part of your own upline or downline.
synonyms: Sideline

DSA or the Direct Selling Association are associations under the same name which are mainly active in the USA, Great Britain, Australia, Malaysia, Singapur and New Zealand with the shared agenda of representing companies working in direct selling or multi level marketing.
synonyms: Direct Selling Association

Dan Jensen, specialist for compensation plans since 1978 and founder of Dan Jensen Consulting. He also founded Jenkon - by his own account, he has not been involved in this company sind 1999.

Difference Bonus refers to differing amounts on sales of a distribution partner in a downline.

The "Original Dinner Party" can be considered a pyramid system. This has been confirmed by the Attorney General of Missouri in 2003. In the European jurisdiction, pyramid systems are considered unlawful. The "Original Dinner Party" members also referred to it as gifting circle, heart circle, birthday club or round table.
synonyms: Gifting Circle, Heart Circle, Birthday Club, Round Table

Direct marketing is a marketing measure addressing interested parties and potential customers directly and prompting them to reply. The next level of marketing is direct selling.

Direct selling describes the sales of services and products directly to the end customer, mainly without selling the products along the trade chain via wholesale trade or distribution.

See D S A
synonyms: D S A

See DSWA
synonyms: DSWA

Distribution Partners in direct selling or MLM companies are people who mainly work as freelance consultants or agents for network marketing companies.
synonyms: Consultant, Partner

See Partner Area
synonyms: Partner Area, Partner Backoffice

The term distributor (lat. distribuere = hand out) refers to a whole saler acting as intermediary and managing the distribution of products from production to customer.

All direct and indirect distribution partners of your own MLM or direct selling organisation below your own position within the same line.

A direct or indirect distribution partner below your own position within the same line.

The DSWA is the American association for women in direct selling.
synonyms: Direct Selling Women's Alliance

Dynamic Compression can be part of a compensation plan. When a distribution partner fails to reach a necessary qualification threshold and becomes inactive, the commission will be attributed and paid out to the next higher-ranking active distribution partner.
synonyms: Roll Up

See Pass-Up Plan

A Fast Start Bonus is a further income category that can be established in compensation plans. One option is a bonus payout to new distribution partners upon receipt of their first orders. The objective is to facilitate their start.
synonyms: Quickstart Bonus

See FEDSA
synonyms: FEDSA

FEDSA is the umbrella organisation of European companies working in direct selling. It was founded in 1991.
synonyms: Federation of European Direct Selling Associations

See Frontline
synonyms: Front-Line, Frontline

A distribution partner you have recruited yourself. There is no intermediate between you and this distribution partner.

See Frontline
synonyms: Frontline

Frontloading means providing new distribution partners with the basic equipment of a product group.

The generation bonus is a further income channel used in some stair step breakaway compensation plans. In large structures, the generation bonus is usually the most important income element. In breakaway plans it usually constitutes a certain percentag of the generation volume of a distribution partner who performed a breakaway.

See Dinner Party

Group sales volume refers to the sales effected by a distribution partner together with his or her downline.

See Group Sales Volume

See Host reward
synonyms: Host reward

A German committee founded in 1967 and often referred to as the predecessors of the current BDD (Federal Association of Direct Selling Germany).

See Dinner Party

A home party is an event organised by a direct selling company's distribution partner. Each party takes place at a different home, the hosts vary. The goal is to sell products in a comfortable atmosphere. The hosts invite their friends and acquaintances to the home party, thereby constantly winning new potential customers and increasing the awareness for the products and the company.
synonyms: Sales party

Host rewards are normally presents given to the home party host. They are directly linked to the volume of sales at the home party. The party host can choose products for a defined percentage of the turnover as a reward for hosting the party.
synonyms: Guest reward

A Hybrid Marketing Plan consists of several compensation plan modules.
synonyms: Hybrid Marketing Plan, Hybrid MLM Plan

In direct selling or MLM, activity criteria such as a minimum sales volume per month can be laid out in the compensation plan. An inactive distribution partner has not been able to achieve that criterion within the current accounting month and hence does not get paid any commission.

Incentive refers to extra premiums which can be earned by reaching targets such as specific order or sales volumes.

The Infinity Bonus is a further income channel forming part of some compensation plans. Infinity means that distribution partners theoretically can gain commissions all they way down to the end of the downline. This, however, only applies when no other member of the downline has already partly or completely claimed the bonus.

"initial order" refers to the first order at a network marketing company necessary to be included in the network.

See Lead
synonyms: Lead

See Dan Jensen

Lead refers to the information about insterested parties. This includes information about parties interested in the services and products as well as potential end customers or parties interested in working as distribution partners.
synonyms: Interested party

In Network Marketing a level refers to the rank a distribution partner has achieved, also called unilevel depth.
synonyms: Rank

A Bonus paid for unilevel depth.

See Compensation Plan
synonyms: Career Plan, Compensation plan, Reward Plan

A Matrix Plan is a type of compensation plan limited in terms of depth and width. E.g. when the first 5 spots of a 5 x 5 matrix are filled, the free spots of the second level are filled next and so forth. When all places on all depth levels are filled, a new matrix has to be established.

See Multi Level-Marketing
synonyms: Multi Level Marketing, Network Marketing

MLMIA (Multilevel Marketing International Association) is a US association.
synonyms: Multilevel Marketing International Association

A type of compensation plan
synonyms: Monoline MLM Plan

See MLMIA
synonyms: MLMIA

Multi Level Marketing is a new form of direct selling allowing distribution partners to recruit and teach new distribution partners. They are compensated with commissions for the time and effort spent for the administration and care of their new distribution partner network.
synonyms: MLM, Network Marketing

European business journal for direct selling

See Multi Level Marketing
synonyms: MLM, Network Marketing

A Networker is a distribution partner for a direct selling or MLM company.

Opportunity Meeting is a meeting organized by an organisation's distribution partners. The goal is to present opportunities available at the company and to attract new distribution partners.

A type of bonus

See personal sales volume

See Distribution Partner
synonyms: Distribution Partner, Consultant

The protected webspace of a software for direct selling or MLM companies allowing your distribution partners to perform their business operations.
synonyms: Consultant Area, Partner Area, Distribution Partner Area

See Partner Backoffice
synonyms: Partner Backoffice, Consultant Area, Distribution Partner Area

A partyplan is a type of marketing plan with particular focus on the sales at home parties.
synonyms: Direct Selling, Partyplan, MLM Partyplan

In direct selling or MLM, activity criteria such as a minimum sales volume per month can be laid out in the compensation plan. A passive distribution partner has not been able to achieve that criterion within the current accounting month and hence does not get paid any commission.

In Multi Level Marketing, passive income refers to any income distribution partners gain through the sales of their distribution partners in the downline.

A type of compensation plan where a share of the compensation are transferred to the Upline.
synonyms: X-Up MLM Plan, Dynamic Pass-up Plan

See Sponsor
synonyms: Sponsor

Pay Line refers to the depth of the downline from which commissions can be achieved as laid out in the compensation plan.

See PCI-DSS
synonyms: PCI-DSS

PCI-DSS is a proprietary information security standard used by all major credit card organisations when processing credit card transactions.

The large credit card companies Visa and Mastercard state in their guidelines that a company handling customer credit card data has to obtain a PCI-DSS certification. When implementing Upline, this also applies to the service provider. See also PCI-DSS

In MLM, personal consumption refers to products distribution partners actually use themselves or demonstrate to interested parties or distribution partners at sales presentations. Many marketing plans include a small monthly personal consumption rate for the qualification process.

The term "personal group" refers to all distribution partners in your downline that have not yet performed a breakaway.

Personal Sales Volume refers to the sales volume achieved by distribution partners themselves. It is also often referred to as own "business volume" which is not 100% correct in economic terms where "business volume' normally describes an entity's own business volume as part of the turnover together with customer volume and own consumption.

Phase before the launch of a new MLM system; distribution partners can register with the direct selling company before the launch via e.g. a web form.

Margin between recommended sales price and wholesale price

See Personal Sales Volume

See activity criterion
synonyms: activity criterion

A "qualification turnover" is a monthly turnover goal distribution partners have to reach to move to a certain qualification level or to receive commissions on their group turnover.

See Fast Start Bonus
synonyms: Fast Start Bonus

See Level
synonyms: Level, Career Rank

See Multi-Level-Marketing
synonyms: Relationship Marketing

Many MLM companies grant rookies a return guarantee for products as well as a refund guarantee for the purchase price.

See Referral Marketing
synonyms: Referral Marketing

Replicated Websites allow distribution partners to run their own personalised web presence, including a webshop on a real subdomain. The company hereby promotes its distribution partners' sales.
synonyms: Virtual Webshop

See Dynamic Compression
synonyms: Dynamic Compression

See Dinner Party

See Override

See Home Party
synonyms: Home Party

See Crossline
synonyms: Crossline

A Single Level Plan or Single Level Compensation Plan is a type of marketing plan focusing on own direct sales.

A type of compensation plan

Term referring to a distribution partner that has directly brought another distribution partner into the business.
synonyms: Patron

A Stairstep Breakaway Plan is a type of compensation plan where branches of your downline can break away when distribution partners reach specific targets such as sales volume targets or active downline distributor targets over a certain amount of time. Upon achievement of these requirements, distribution partners have the option of developing themselves and their downline, mainly via "royalties" or "override bonuses" to compensate the sponsor for the breakaway.

"Testimonial" is a term originally used in advertising and synonymous with "personal account".

Time is a physical quantitiy that should be invested well in order to succeed. We wish you a lot of fun browsing our pages and a lot of success for your start into direct selling. Please do not hesitate to contact us for feedback.

In German-speaking countries, Tupperparty is a fixed term for a home party organized by the US company Tupperware to sell their products.

A Uni Level Plan or Uni Level Compensation Plan is a type of marketing plan containing commissions payment depending on career level and achievement of specific levels.

See URSSAF
synonyms: URSSAF

See UVDV

A specialized software product for direct selling and MLM companies by Upline GmbH which has been successfully implemented since 1993.

A distribution partner's "upline" is the direct sales line the distribution partner belongs to whereby upline refers to higher-ranking distributors.

The French URSSAF (Unions de Recouvrement des Cotisations de Sécurité Sociale et d'Allocations Familiales, meaning the organisation for the payment of social security contributions and family benefits) is a network of private organisations founded in 1960. Its main task is the collection of social security contributions from employers and employees. Companies paying commissions to consultants with residency in France are obliged to pay specifc lump-sum social security contributions to the French social security system.
synonyms: Unions de Recouvrement des Cotisations de Sécurité Sociale et d'Allocations Familiales

UVDV or Unternehmensverband Direktvertrieb e.V. (Registered Association for Direct Selling) was a German Association operating until 2011. The association's main goal was to establish direct selling as an accepted sales avenue.

Companies paying commissions to consultants with residency in France are obliged to pay specifc lump-sum social security contributions to the French social security system.
synonyms: Vendeur à domicile indépendant

See VDI
synonyms: VDI

See Replicated Website

A virtual webshop - virtual end customer shop allows the distribution partners to run their own personalized web presence with their own web shop on a real subdomain. Companies hereby promote their distribution partners' sales.
synonyms: Replicated Website

The WFDSA is the international umbrella organisation for companies in direct selling throughout the world. The umbrella organisation represents about 60 national associations.
synonyms: World Federation of Direct Selling Associations

See WFDSA
synonyms: WFDSA

See Pass-Up Plan

Snowman from the Himalayas. - This has nothing to do with network marketing or direct selling and does not really belong into this glossary. If you have a suggestion for a term starting with "Y", please contact us. Maybe you will soon be able to find your suggestion right here. Many thanks!