Achievement Level: A rank or title that is achieved by moving a certain amount of product per month and/or recruiting a certain number of distributors who themselves have attained a certain designated achievement level.
Affiliate Program: An Internet business, such as www.cj.com, that allows people to become affiliates simply by providing a link on their Web sites to a corporate home page, and pays affiliates a commission on all sales made through that link.
Angel investors: Individuals who have capital that they are willing to risk. Angels are often successful entrepreneurs who invest in emerging entrepreneurial ventures, often as a bridge from the self-funded stage to the point in which a business can attract venture capital.
Assets: Items of value owned by a company and shown on the balance sheet, including cash, equipment, inventory, etc.
Autoresponder: A Web site or a service Aweber that e-mails information automatically to anyone who clicks on the responder.
Balance sheet: Summary statement of a company's financial position at a given point in time, listing assets as well as liabilities.
Binary: A type of compensation plan that limits your frontline to two people and pays out weekly on one of the two legs of your organization.
Bonus Pool: A special fund set aside by a network marketing/MLM company, from its profits, and distributed as a special incentive to qualified sales leaders.
Bonus Volume: See BV.
Breakage: Sales volume generated by you or your downline for which you receive no compensation.
Breakaway: An abbreviation for "stairstep/breakaway," one of the four major types of compensation plan. It can also refer to a distributor in your downline who has met certain minimum monthly qualifications and has consequently "broken away" from your group.
Breakaway Leg: The organization or downline of a breakaway distributor. Breakeven point: Dollar value of sales that will cover, but not exceed, all of the company's costs, both fixed and variable.
Business Builder: A distributor who is actively prospecting and gathering customers, as opposed to one who is simply buying product at wholesale for personal use.
Buy-Back Policy: The money-back guarantee offered by all reputable MLM companies to distributors. Generally, companies will pay 70 to 100 percent of the wholesale price on any product that a distributor purchases, but then decides to return, for whatever reason.
BV (Bonus Volume): An alternate expression for point volume (PV) or business volume (BV). It is a value used by MLM/Network Marketing companies to calculate overrides and commissions, based upon the wholesale price of the items for which overrides and commissions are being paid.
Bridge finance: Short-term finance that is expected to be repaid quickly.
Browser: A computer program that enables users to access and navigate the World Wide Web.
Business idea: is a concept which can be used for commercial purposes.
It typically centers around a commodity or service that can be sold for money, according to a unique model.
There are several methods for developing and testing a business idea. The ability to come up with a business idea can be transformed into a viable business, where ideas supported by feasibility and a business plan can then be sold to interested investors, firms, and interested parties for a lump sum or a management contract, or as agreed. Business ideas, if introduced at the right time, when demand for such service or a product introduced by the idea is expected to surge, can lead to a very profitable business. Business ideas are always available through different sources; however, it is the application applied on these ideas, and timing makes all the difference in failure or success.
Business incubator: This is a form of mentoring in which workspace, coaching, and support services are provided to entrepreneurs and early-stage businesses at a free or reduced cost.
Business plan: A written document detailing a proposed venture, covering current status, expected needs, and projected results for the enterprise. It contains a thorough analysis of the product or service being offered, the market and competition, the marketing strategy, the operating plan, and the management as well as profit, balance sheet, and cash flow projections.
Capital: Cash or goods used to generate income. For entrepreneurs, capital often refers to the funds and other assets invested in the business venture.
Cash flow: The difference between the company's cash receipts and its cash payments in a given period. It refers to the amount of money actually available to make purchases and pay current bills and obligations.
Cash flow statement: A summary of a company's cash flow over a period of time.
Circle of Influence: The people who are closest to you and who constitute your warm market. Also, those who might be easily influenced by you because of your reputation in a particular profession or community.
Cold Market: Prospects outside your circle of friends, family, and associates.
Collateral: An asset pledged as security for a loan.
Commission: The percentage you earn from the sales volume of your organization.
Commissionable Volume (CV):An alternate term for bonus volume.
Compressed Plan: A pay plan that stacks or "compresses" the bulk of its commissions on the front end.
Compression: When a distributor quits or is terminated, his downline moves up one level, thus filling the empty space he left, and "compressing" the company's downline by one level.
Copyright: Copyright is a form of legal protection for published and unpublished literary, scientific, and artistic works that have been fixed in a tangible or material form. It grants exclusive rights to the work's creator for a specified period of time.
Corporation: A business form that is an entity legally separate from its owners. Its important features include limited liability, easy transfer of ownership, and unlimited life.
Depreciation: The decrease in the value of assets over their expected life by an accepted accounting method, such as allocating the cost of an asset over the years in which it is used.
Depth: The number of levels in your MLM/Network Marketing organization.
Direct Sales: See network marketing.
Direct Selling: A form of selling whereby independent MLM/Network Marketing representatives, working on commission, sell face-to-face outside of an established retail location.
Distributor: A person who contracts independently to sell products or services for an MLM/Network Marketing company.
Downline: All the people recruited as distributors into a network marketing/MLM company constitute that company's downline. Your downline consists of everyone whom you recruit, who is recruited by your recruits, and so on.
Drop-Shipping: The practice of shipping product directly to customers from the company warehouse, rather than through an independent distributor.
Duplicatability: The extent to which an MLM/Network Marketing opportunity can be easily mastered by new recruits.
Duplication: The process of replicating business builders in your downline.
E-commerce: The sale of products and services over the Internet.
Entrepreneur: A person who organizes, operates, and assumes the risk for a business venture.
Equity: An ownership interest in a business.
Group Volume: The total volume of wholesale purchases made by your personal group in a given month.
Heavy Hitter: A top sales leader in an MLM company.
Home-based business: A business, of any size or type, whose primary office is in the owner's home.
Home based business opportunity: a business model that has a clearly defined product and/or service, an in place marketing system and a compensation plan. This business model allows you the flexibility to set your own hours and work your business from home.
Home Meeting: An opportunity meeting held in a distributor's home.
Hotel Meeting: An opportunity meeting held in a rented hotel conference room.
Income - the total amount of money earned from work or obtained from other sources over a given period of time.
Income statement: Also known as a "profit and loss statement," it shows a firm's income and expenses, and the resulting profit or loss over a specified period of time.
Infinite Bonus: A feature that theoretically creates infinite depth in a pay plan.
Infinite Depth: A feature of some compensation plans allowing distributors to draw earnings from deeper levels, below their ordinary pay range.
Intangible assets: Items of value that have no tangible physical properties, such as ideas.
Internet: The vast network of networks connecting millions of individual and networked computers worldwide.
Internet business: is a company that does most of its business on the Internet, usually through a website that uses the popular top-level domain, ".com"
Inventory: Finished goods, work in process of manufacture, and raw materials owned by a company.
Joint venture: A legal entity created by two or more businesses joining together to conduct a specific business enterprise with both parties sharing profits and losses.
Leader: A top achiever in an MLM/Network Marketing downline.
Leg: A down line within your downline, usually headed by one of your frontline "Leaders" distributors.
Legitimate home based business: a business model that has a clearly defined product and service.
Level: The vertical position of a distributor in your organization. If you recruit someone, he is enrolled on your first level. His recruits will be on your second level, and the recruits of his recruits on your third level.
Liabilities: Debts a business owes, including accounts payable, taxes, bank loans, and other obligations. Short-term liabilities are due within a year, while long-term liabilities are due in a period of time greater than a year.
Limited partnership: A business arrangement in which the day-to-day operations are controlled by one or more general partners and funded by limited or silent partners who are legally responsible for losses based on the amount of their investment.
Line of credit: (1) An arrangement between a bank and a customer specifying the maximum amount of unsecured debt the customer can owe the bank at a given point in time. (2) A limit set by a seller on the amount that a purchaser can buy on credit. Liquidity: The ability of an asset to be converted to cash as quickly as possible and without any price discount.
Lukewarm Market: Prospects who are neither in your warm market nor your cold market, but somewhere in between. Can refer to people whom you have spoken to once or twice or people referred to you by others in your warm market.
Marketing: The process of researching, promoting, selling, and distributing a product or service. Marketing covers a broad range of practices, including advertising, publicity, promotion, pricing, and packaging.
Marketing plan: A document describing a firm's potential customers and a comprehensive strategy to sell them goods and services.
Massive Action: A sustained, one time barrage of prospecting activity.
Matrix: A comp plan that limits the number of people on your frontline, usually to two or three.
Max Out: A comp plan is said to be maxed out when you have put enough people in place, moving a sufficiently high level of monthly volume, to qualify you for the maximum level of commissions available in the plan. Mentor - A wise and trusted counselor or teacher. MLM/ Multilevel Marketing: Generally, an alternate term for network marketing. It can also be used to distinguish those particular network marketing plans that permit distributors to draw income from more than one level.
Momentum: The phase of a network marketing company's growth when sales and recruiting begin to grow at an exponential rate.
Money: is anything that is generally accepted as payment for goods and services and repayment of debts.[1] The main uses of money are as a medium of exchange, a unit of account, and a store of value.[2] Some authors explicitly require money to be a standard of deferred payment.[3] The dominant form of money is currency.
Online business: any business that uses the internet to market and sell goods and services.
Monthly Volume Requirements: An alternate term for qualifications.
Multi-Affiliate Program: An affiliate program that allows affiliates to recruit other affiliates and to be paid multilevel commissions on sales of their recruits.
Network Marketing: Any form of selling that allows independent distributors to recruit other independent distributors and to draw a commission from the sales of those recruits. In a direct sales sense one sale is made and one person is paid.
Network Marketing Leads: Leads are people that have indicated an interest in a product, service or business opportunity.
Networking: (1) Developing business contacts to form business relationships, increase knowledge, expand a business, or serve the community. (2) Linking computers systems together.
Niche marketing: Identifying and targeting markets not adequately served by competitors.
Outsourcing: The practice of using subcontractors or other businesses, rather than paid employees, for standard services such as accounting, payroll, information technology, advertising, etc.
Opportunity: The chance to join a MLM/network marketing distributorship, or another term for the distributorship itself.
Opportunity Meeting: A recruiting rally or business briefing held by MLM distributors for the purpose of presenting the opportunity to prospects.
Organization: That portion of your downline from which you are allowed to draw overrides and commissions. It includes all distributors placed on levels that fall within your pay range.
Organizational Volume: Monthly sales volume generated by your organization, through product purchases from the company.
Overrides: The monthly commission you receive from your breakaway legs.
Partnership: Legal form of business in which two or more persons are co-owners, sharing profits and losses. . Patent: A property right granted to an inventor to exclude others from making, using, offering for sale, or selling an invention for a limited time in exchange for public disclosure of the invention when the patent is granted.
Passive income: is monies received on a regular basis, with little effort required to maintain it. – also called residual income.
Payout: The percentage of a company's total revenue that it pays out to distributors, in the form of overrides, commissions, and bonuses.
Pay Plan: An alternate term for compensation plan.
Pay Range: All levels of your downline from which your comp plan allows you to draw overrides and commissions.
Personal Group: All distributors in your pay range, whom you have personally sponsored, but who have not broken away.
Personal Sales Volume:The volume of product that you personally sell in a given month.
Personal Volume: The volume of product that you buy at wholesale from the company in a given month.
Point Volume: An alternate term for bonus volume.
Pre-Launch: The period just before an MLM/Network Marketing company's official launch.
Prospect: A potential customer or recruit.
Prospecting: The process of seeking customers or recruits for your Network Marketing/MLM business.
Pyramid: is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, often without any product or service being delivered.
Qualifications: Monthly quotas that distributors are required to meet, in order to qualify for a given achievement level. Quotas are usually set in terms of group and personal volume. Occasionally, there are recruiting quotas, requiring that you bring a certain number of people onto your front¬line each month.
Recruit: A prospect who has agreed to join your downline as a distributor.
Renewal Fee: A yearly membership fee paid to an Network Marketing/MLM company, in order to maintain your status as a distributor.
Residual income: earned by a sales person, generated from the payment of a product or service that must be renewed on a regular basis, in order to continue receiving its benefits - also called passive income.
Retail Profit: The spread between the wholesale price you pay for product, and the retail price at which you sell it to your customers.
Roll-Up: A feature in some plans stipulating that if you fail to qualify for commissions in a given month, because you did not meet your quota, you are declared inactive, and will receive no commissions from your downline that month.
Saturation: The theoretical point at which a network marketing/MLM company runs out of potential customers and recruits, and stops growing.
Service Core of Retired Executives (SCORE): A non-profit organization dedicated to entrepreneurs' education and the success of small business. It is sponsored by the SBA to provide consulting to small businesses.
Search engine: A computer program that facilitates the location and the retrieval of information over the Internet.
Seed financing: A relatively small amount of money provided to prove a concept; it may involve product development and market research.
Server: A computer system to provide access to information or Web sites.
Sifting and Sorting: The practice of quickly identifying the most promising prospects and focusing your recruiting efforts on them, while ignoring the rest.
Small Business Administration (SBA): Created in 1953, it is an independent agency of the U.S. federal government that aids, counsels, assists, and protects the interests of small business. Small Business Development Centers (SBDC): SBA program using university faculty and others to provide management assistance to current and prospective small business owners.
Social entrepreneur: Someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Social entrepreneurs often work through non-profit organization and citizen groups, but they may also work in the private or governmental sector. Many successful entrepreneurs, such as Bill Gates of Microsoft, have become social entrepreneurs. Sole proprietorship: A business form with one owner who is responsible for all of the firm's liabilities.
Sponsor: A distributor in an Network Marketing/MLM company who recruits and trains another distributor.
Stairstep: An alternate term for an achievement level, or for a stairstep/breakaway compensation plan.
Stairstep/Breakaway: A type of compensation plan that requires distributors to meet monthly volume quotas, in order to qualify for an ascending series of achievement levels, or "stairsteps." When a distributor reaches a certain level, he "breaks away" from his sponsor's group.
Start-up financing: Funding provided to companies for use in product development and initial marketing. It is usually funding for firms that have not yet sold their product commercially.
Stockpiling: The practice of buying and hoarding more product than you can possibly sell, usually in an attempt to meet excessive monthly quotas, to qualify for commissions.
Teleconference: A recruiting rally or business briefing that is broadcast by telephone. Prospects are told to phone in at a certain time to hear the event.
Three-Way Calls: A prospecting technique that allows distributors to build a downline while training recruits. When a raw recruit wants to interview a new prospect over the phone, he will 3-way his sponsor into the call. The sponsor gives the presentation while the recruit listens and learns.
Trademark: A form of legal protection given to a business or individual for words, names, symbols, sounds, or colors that distinguish goods and services. Trademarks, unlike patents, can be renewed forever as long as they are being used in business.
Two-Level Plan: Another name for the compressed plan, derived from the fact that many compressed plans stack the bulk of their commissions on the first two levels.
Unilevel: A type of compensation plan in which you must qualify for achievement levels, but in which people in your downline cannot break away.
Unsecured loan: Short-term source of borrowed capital for which the borrower does not pledge any assets as collateral.
Upline: All of the people above you in a network marketing/MLM organization. Also, an alternate term for sponsor.
Variable costs: Costs that vary as the amount produced or sold varies.
Venture capital investors: An institution specializing in the provision of large amounts of long-term capital to enterprises with a limited track record but with the expectation of substantial growth. The venture capitalist also may provide varying degrees of managerial and technical expertise.
Work from home: is a work arrangement in which employees enjoy flexibility in working location and hours. In other words, the daily commute to a central place of work is replaced by telecommunication links.
Warm List: A list of personal contacts drawn up by new recruits that constitutes their warm market.
Warm Market: All potential prospects for your business whom you personally know, either because they are family members, friends or business associates.
Width: The number of people in a distributor's frontline, or the number of people allowed in a distributor's frontline by the rules of the compensation plan. World Wide Web: The part of the Internet that enables the use of multimedia text, graphics, audio, and video.
