Basic Terms and Definitions


A sponsor introduces new people to the opportunity and enrolls them. This is the act of sponsoring someone. Your sponsor invited you to look at the company, and then you joined. When you invite others, and they join, you will sponsor them into the company, and you will be their sponsor.


The terms representative, affiliate, partner, and associate are often used interchangeably with distributor. When you join a company, you become a distributor, because you distribute the company’s products or services.


A person’s upline is all the distributors directly above you. Your sponsor, your sponsor’s sponsor, and so on.


This is your team, group, or organization. Every distributor that you have sponsored, plus every distributor that your distributors have sponsored, and so on.


Anyone in your company, but not in your upline or downline, is your sideline. This is also referred to as crossline. Your sponsor’s other distributors are your sideline, for example.


This term is generally used to describe your downline. Distributors that you personally sponsor are considered to be on your first level. When your personally sponsored distributors enroll their own distributors, those new distributors are on your second level, and so on.


Distributors on your first level are your frontline distributors.


A leg is part of your downline. Each distributor that you personally sponsored will begin a new leg for you. That distributor’s downline will make up that leg for you.


Refers to how many distributors you personally sponsor onto your first level.


Refers to how many levels down your downline or pay plan goes.


Rank is also referred to as pin level, or sometimes just level, although this can cause confusion with the separate (and unrelated) term level that we’ve already defined, so we will stick with rank. Ranks are like promotions. Generally, you are eligible for additional commission each time you advance in rank. To advance in rank, you must bring in more business for the company. This usually consists of a combination of acquiring new customers, recruiting new distributors, and helping your downline increase in size and/or customer count. Often, especially for the higher ranks, you will need to help some people in your downline advance in rank. Typical names for ranks include bronze, silver, gold, platinum, and diamond. Sometimes corporate terms are used, such as partner, manager, director, and executive.


In most product based companies, every product (or package of products) is assigned a point value. Very often, the point value is different from the actual cost or price of the product. In service based companies, usually each customer counts as a point, or multiple points, depending on the type of customer. Points can have many different names, and some companies use several different types of points, which can make a little complex to understand. Typical names are point value (PV), commissionable volume (CV), and bonus points (BP). Points are generally used to calculate commissions, or to establish rank qualifications, or both. Many companies also count group points, which is usually the total of your points and your entire downline’s points.


In product based companies, every distributor is generally required to place a recurring monthly order to qualify for commissions. Because this order is automatically shipped to them every month, it is called an autoship.

Next: Stairstep Breakaway Compensation Plans


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