Glossary
The language of direct selling.
49 terms you will meet in plan documents, contracts and this platform.
A
- Active
- A member who meets the plan's activity rule for the period, such as a minimum personal volume or an active autoship.
- Autoship
- A recurring order placed automatically on a schedule, typically monthly, often used to maintain rank qualification.
B
- Binary plan
- A compensation structure with two legs per position where commissions are paid on the weaker leg's volume.
- Board plan
- A revolving matrix where a fixed-size board pays out and splits when full, also called a cycler.
- Bonus volume (BV)
- The value assigned to a product for commission purposes, often lower than retail price.
- Breakaway
- When a downline leader reaches a rank that separates their group from the upline's group volume, with the upline earning an override instead.
- Buy-back policy
- A commitment to repurchase unsold, resalable inventory from departing distributors, commonly at 90 percent.
C
- Cap
- A limit on the bonus a position can earn per cycle, or on total company payout as a percentage of volume.
- Carry-forward
- Unpaired volume in a binary plan retained for pairing in future cycles.
- Clawback
- Reversal of a commission when the originating order is refunded or charged back.
- Commissionable volume (CV)
- The portion of an order on which commissions are calculated.
- Compression
- Skipping inactive positions when counting paid levels so active members are paid on active volume.
- Cooling-off period
- A window after enrollment in which a new member can cancel for a full refund, required in many jurisdictions.
- Cycle
- The period over which volume accumulates before a commission run; also a completed pair in binary plans.
D
- Downline
- Everyone placed below a position in the genealogy.
- Dynamic compression
- Compression applied at calculation time without changing the tree.
E
- E-pin
- A prepaid code used to pay for enrollment or products in markets where cards are uncommon.
- E-wallet
- A ledger account per member holding commissions, with withdrawals to external payout methods.
F
- Fast-start bonus
- A one-time bonus on a new member's first order or first period, paid to the sponsor.
- Flush-out
- Expiry of unpaired carry-forward volume after inactivity or a time limit.
- Frontline
- Members directly sponsored or placed on the level immediately below a position.
G
- Generation
- A segment of downline that begins at a member holding a qualifying rank, used in generation plans.
- Genealogy
- The tree of sponsor and placement relationships between all members.
- Group volume (GV)
- Total volume of a position's entire downline, sometimes with per-leg caps.
H
- Holding tank
- A temporary queue where new enrollees wait before placement in the tree.
- Hybrid plan
- A compensation plan combining elements of two or more plan types on one genealogy.
I
- Income disclosure statement
- A published summary of actual participant earnings, including the median and share earning nothing.
L
- Leg
- A branch of the downline starting from one frontline position.
- Level
- Depth in the genealogy counted in positions from a given member.
M
- Matching bonus
- A percentage of the bonuses earned by personally sponsored members, sometimes across several generations.
- Matrix plan
- A forced structure with fixed width and depth, such as 3×7, where excess recruits spill over.
- Monoline plan
- A single-line structure where every member joins below the previous one in order of enrollment.
O
- Override
- A commission earned on the volume of a breakaway or generation group.
P
- Paid-as rank
- The rank used for bonus calculation in the current period, as opposed to highest achieved rank.
- Pairing bonus
- The core binary bonus paid when left and right volume match according to the pair ratio.
- Party plan
- A social-selling model where consultants sell through hosted events with host rewards.
- Payout ratio
- Total commissions paid divided by commissionable volume for a period.
- Personal volume (PV)
- Volume from a member's own purchases and their retail customers.
- Placement
- The position in the tree where a new member is inserted, which may differ from the sponsor.
- Pool
- A bonus funded by a percentage of company volume and divided among qualifiers by shares.
R
- Rank
- A status level with qualification requirements that unlocks bonuses, depth and recognition.
- Replicated store
- A company storefront presented under an individual distributor's identity and referral link.
- Roll-up
- Permanently moving a terminated member's downline up to the next active sponsor.
S
- Spillover
- Recruits placed below a member by their upline because the upline's frontline is full.
- Sponsor
- The member who enrolled a new member, used for sponsor-based bonuses.
- Stair-step breakaway
- A plan where members climb ranks and break away from their upline's group at a set rank.
U
- Unilevel plan
- A plan with unlimited width paying a percentage on a fixed number of levels.
- Upline
- Everyone above a position in the genealogy.
W
- Weaker leg
- In binary plans, the leg with less volume in the cycle; pairing is paid on it.