MLM Glossary – I

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Incentives:

Rewards provided by network marketing companies to motivate their distributors and increase the downline’s enthusiasm. The goal of incentives is to excite members about selling the product or service, to offer rewards for performance, and to develop a fun culture within the network marketing organization. Incentives are often provided to distributors who have the highest volume, the highest increase in volume, or the highest increase in volume percentage. Other factors that determine who gets the incentives include the amount of retail products sold, the number of new distributors recruited per week, month or quarter, the total number of guests at MLM conference calls or opportunity meetings, and completion of training.

Independent Distributor:

See ‘Distributor

Inventory Loading:

Also called front-end loading, it refers to forced personal purchases of a particular distributor in large quantities in order to achieve sales goals and qualify for bonuses as well as retain a particular network marketing organization’s level or status. A distributor who makes these purchases is better known as garage qualified. In the MLM industry, this is perceived in both a positive and negative way. While this approach may benefit distributors in as far as bonus and leadership ranking are concerned, this may increase the risk of considerable economic loss over time, particularly when the stored products are not sold quickly. This process may encourage distributors to purchase the company’s products that may not be sold, returned, or consumed. While it is perceived in many different ways, inventory loading is widespread in the industry.

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