MLM Glossary

The MLM glossary below defines commonly used MLM words, put in layman’s terms to heighten understanding surrounding Multi-Level Marketing. These definitions are not to be misconstrued as legal definitions.

Compensation Plan
1. Money received as payment for selling a product to consumers.
2. Money received as payment for a downline member selling a product.
3. The 'compensation plan' is the way a MLM company rewards the reaping of customers and recruitment of others who replicate this process.

Senior Member
1. A person who has signed an agreement to distribute SDL Products.

Downline
1. Any person you recruit to join SDL. “Sipho is in my downline.”
2. Any person recruited by someone you have recruited. “Susan has sixteen people in her downline.”

Ethical
1. Being in accordance with the accepted principles of right and wrong that govern the conduct of a profession.
2. Morally right or morally acceptable.

Ethical Business
1. A business that makes someone’s life better.
2. A business that runs in compliance to the above named principles.

Financial Freedom
1. Free from debt and having the means to buy all one desires.

Leader
1. A leader is a distributor who takes responsibility for those in his downline and ensures they are well trained to sell products to consumers and recruit others.

Note: A leader in MLM is not based on a resume (as in a traditional business), but on production only. Leaders can be found or they can be developed.

Multi-Level Marketing
A method of distributing a product to a consumer.

MLM
Acronym for Multi-Level-Marketing

Prospect
1. Someone who is a potential customer.
2. Someone who is a potential distributor.

Recruit
1. To enroll or seek to enroll as a member.
The difference between recruiting and hiring is that when one hires another, it means to engage a service (of a person) for a fee; to employ.
In MLM a person recruits another, or a company recruits a person, but they are not hired as employees. They are paid a commission for products they have sold.

Sponsor
1. The person who recruited you into your MLM business. “My sponsor recruited me last month.”

Upline
1. The person who recruited you into an MLM company. “Mr. Dlamini is my upline.”

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