Network Marketing – According to Wikipedia, “network marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit.” This strategy is used by hundreds of companies of which some of the best known include Amway Global, Mary Kay, Shaklee, Avon, and Monavie. Network Marketing is also known as Multi-Level Marketing (MLM) and Relationship Marketing. While not synonomous with Direct Selling, Network Marketing often involves Direct Selling techniques.
Distributors – A distributor is an individual who has signed up on the sales force of a network marketing company for which he or she distributes the company’s products or services. Distributors are known by several other designations such as Independent Business Owners (IBOs), Promoters, Independent Sales Representatives (ISRs), Independent Distributors, etc.
Upline – The opposite of a downline, an upline is a reference to distributors who are above you in the chain of distributors. While it can refer to the person who recruited a distributor directly, it can also refer to anyone higher up in the distribution chain.
Downline – The term used to designate those sales representatives that a distributor has recruited into a network marketing business. Because network marketing company’s compensation plans are structured in such a way as to reward distributors who recruit more distributors into the company, building a downline (or group, or team) is one of the most necessary tasks of any distributor.
Pyramid Scheme – A misnomer often applied to legitimate, safe network marketing businesses. Pyramid schemes are technically, non-sustainable businesses that rely primarily on recruiting new distributors rather than the sale of the products or services for revenue and are illegal. In recent years, the Federal Trade Commission has shut down companies such as Fortune High-Tech Marketing and Zeek Rewards. The term “Ponzi Scheme” is sometimes used to describe Pyramid Schemes though they are not, strictly speaking, the same.
Sponsor / Sponsoring – The term used to describe the action of a distributor recruiting a person into a network marketing company. Generally speaking, interested people cannot sign up to become distributors directly with the company but must do so by way of a distributor which is called their “Sponsor.” This helps to ensure that each distributor has a reference point for support in building his or her business.
Depth and Width – These terms refer to the building of a Downline. “Width” refers the number of front-line positions available in a compensation plan whereas “Depth” refers to the levels of distributors who have recruited other distributors. Look at the image on this page as an example. If this were a downline, we could say that it has a “width” of two (for the two people directly “under” the first person) and a “depth” of two levels because there are two levels of distributors going downward in the downline. We could also say that each of the second level of distributors has a business with a “width” of three. The term “Driving Depth” is used to refer to helping someone in a downline recruit distributors to go “under” them in “depth.”
Prospect / Prospecting – A Prospect is anyone who is or may be interested in joining a network marketing opportunity. Prospecting is the activity of finding people who might be interested in joining the networking opportunity and subsequently showing the opportunity to them.
3 Way Calls – One of the most used forms of recruiting, a three way call is when a distributor calls both a prospect and his or her upline using 3-way-calling. The purpose of this technique is to put a new recruit in contact with an upline who can answer their questions, who has results, and who has more experience than the distributor who is attempting to recruit a person.
