MLM Glossary – C

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Commission:

A percentage allotted to a distributor for services rendered that resulted in the facilitation of a sale. This can be calculated based on the dollar amount of the sale or the personal volume in which it generated and will vary from company to company.

Compensation Plan:

The details of how the commission of distributors in a multi-level marketing company will be determined on their personal sales revenue and that of their downline. Also abbreviated as a ‘Comp Plan’, this document also specifies incentives for recruiting, bonus structure, and necessary qualifications for generating income with the company.

Compliance:

Refers to the policy, or compliance policy, that defines the standards with which distributors are expected to comply. This policy often includes regulations for methods of advertising, marketing, and otherwise promoting the offerings of the company. Often detailing governance over making exaggerated income claims, false product testimonials, and other mistruths a multi-level marketing company’s compliance policy protects the company unfavorable actions that may be initiated by an individual distributor. This policy communicates what behavior is expected of representatives of the company and can be used to revoke one’s distributorship if ignored.

Conference Call:

A telephone call in which a host invites people participate and commonly used to engage large groups of distributors. Conference calls are most often designed so that all parties of the call can listen to a few key speakers. Many mlm companies organize conference calls on a regular basis to teach, engage, or inform their distributors throughout the world. Products such as Skype, GoToMeeting, and FreeConferenceCall are most commonly used.

Consumption:

Refers to the personal use of the companies own products by the distributor. Consumption is most commonly used when referring to nutritional, health, or household products.

Convention:

A formal meeting of the independent distributors within a multi-level marketing company. Often occurring on an annual or biannual basis these meetings often last several days including trainings, corporate announcements, and festivities. The education, training, and connections that mlm conventions offer are known to be one of the best ways for a multi-level marketers to grow their businesses.

Crossline:

A distributor of the same MLM company but who is not connected structurally or within the same line. Distributors that are crossline, also called sideline, are typically in the same geographical location and will often work with one-another as they are “on the same team.” Team in this sense meaning, they are in the same MLM business promoting the same products. See diagram.

Customer Base:

Is the group of customers that an mlm business serves. This can also be used to describe the customers generated by the independent distributor directly.

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