MLM Glossary – S

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Scam:

Also known as confidence trick, a scam is an attempt to cheat or take advantage of a person or group by earning their trust first. This has stained the MLM industry’s reputation over the years where fly-by-night companies that have proliferated tricking people into instantly earning four to five figures a week when they sign up for a corresponding fee. Typically, these schemes don’t have corresponding merchandise or services to offer in exchange for the signup fee. Members earn through the enrollment fees of new members, which is not allowed in a legitimate network marketing company.

Two of the most popular scams in network marketing are illegal Ponzi scheme and pyramid scheme, which are scams intended to make money solely through recruiting, without offering a product. An MLM scam is simply cheating other people’s money for the personal interest of the organizer of an illegal network marketing company.

Shared Leg:

This involves sharing the dominant leg to the sponsor or people above a member. While the sponsor continues to place new members on a distributor’s right leg, you, as the distributor, build your left leg which is then shared to your sponsor. This is designed give assistance to members on the downline from members on the upline.

Leg is basically the downline in a particular team, which starts from a sponsor’s recruit and subsequent recruits under him. Every new recruit is placed one below the other. In a network marketingbinary plan, there are two legs involved, the left and the right leg.A sponsor can choose where to put a new member – either on the right or left leg. The system goes on creating a pyramid shape organization. This type of system is considered to promote team work and effort.

Sideline:
See Crossline

This refers to a “member” in a network marketing team but not in a particular distributor’s sponsorship. Also called crosslines, these don’t earn revenue from one another’s sales or efforts as they are not associated structurally. However, they may work as a team since they are on the same group; they are a part of the same company with a primary goal to promote the company’s products or services.

Sidelines are someone else’s downline and perhaps in one of the upline’s team. One can have as many sidelines as one member can get. In this case, a leader or distributor will constantly have more crosslines than downlines and uplines. Hence, team work is a crucial step to keep the business in the forefront.

Sign-Up:
See Enroll

In the network marketing industry, this term is widely used to validate or confirm membership in a particular company. This is a process a prospect or lead must go through when he or she agrees to join an MLM company. Before one can be called a member, he or she has to sign-up first. Typically the enrollment, or signing up, comes with a fee equivalent to a product kit or services the member will receive upon enrollment. While there are schemes that sign up members for a fee without any goods in return, this is not acceptable in a legitimate MLM business.

Spillover:

Spillover refers to a part in the binary pay system where an upline can place his or her new recruits under a particular member in the group. Since an MLM binary plan entails leg building to form a pyramid-type organization, every member has two members below him or her. If a certain upline or member signs up 3 recruits, these new recruits are assigned to other members in the team with no pairings. This is referred to as “spillover.” Members who cannot recruit a person on their leg can benefit from this system since an upline will assign almost all of his new recruits to members under him to build a balanced group/leg.

Sponsor:

1. Noun. This refers to an individual who has personally recruited or signed up a prospect to join an MLM business he is a part of. The newly recruited member becomes part of the sponsor’s team and form part of the downline. A sponsor may either be a leader, distributor or member of the company.
2. Verb. To recruit someone into an MLM business. “I sponsored 2 people last month.”

Stairstep Breakaway:

This is a type of network marketing compensation plan that consists of representatives (usually group leaders) responsible in boosting up sales volume, whether for group or personal sales. This is done by product retailing and recruitment of new members. Once the target volume is realized (individual and/or team volumes), a group leader or representative moves one step up. This process continues until the group leader breaks away from his upline. A representative can be someone with one or more recruits in his team. Once this representative and his downline “detaches” from their upline, they no longer form part of their upline’s team, thus the term “breakaway.” This type of compensation plan is based on the highest earners. What is perceived as the drawback in this Stairstep Breakaway system is the members’ tendency to stockpile inventory just to earn ranking in the organization.

Strong Leg:

The network marketing industry consists of a weak leg and strong leg (left and right leg). Leg refers to the team/downline of a particular distributor, which may be formed simultaneously by a single leader or distributor. This is usually used in an MLM binary plan where strong leg is longer because all the members above a certain member are continuously adding new members under the said member. This particular member then gets free paying members below him or her. For a networker, being part of the strong leg is an advantage because as the name implies, it is stronger than the other leg. Commission wise, all the members in the strong leg will benefit from new members enrolled by the uplines of this particular leg.

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