Glossary of Direct Selling Terms

Starting with "C"

Whether you are a new social influencer, brand ambassador, or a successful business builder, we're sure you've had a time when you heard a direct selling term you didn't know the meaning of or weren't sure if you were using the word correctly.

Here is a comprehensive glossary of industry terms used in the direct selling, multi-level marking (MLM), influencer marketing, and networking marketing industries to help you sound like an expert from day one.

If you found we missed a term, please let us know here!

Cold prospects

The meaning of cold prospects is consumers who are well-qualified but are unaware of your company or products. Typical businesses reach such clients through standard marketing techniques like cold calling, advertising, and public relations; e.g., MLM businesses reach them through their distributors.

Commission

In MLM business, a commission is any remuneration paid to the distributor and her downline team on each sale made. The commission percentage paid to the distributor may vary from company to company as per the regulations.

Compensation plans

A compensation plan is simply the process by which different MLM companies pay for each sale made by their independent sales force or distributors. In an MLM business, the compensation plans vary from company to company. Primarily, there are three types of compensation plans, including Binary, Unilevel, and Matrix.

Compression

Compression is the term used for bypassing inactive or ineligible distributors when determining rank qualifications or compensation plans as if they aren't a part of genealogy. It can be of two types, standard and dynamic. Standard compression includes bypassing only inactive distributors while determining rank qualification or compensation plans. In contrast, dynamic compression consists of both inactive and active but ineligible distributors.

Corporate

The definition of corporate is 'to be owned by a group of people'. A corporate business or corporation is any business entity owned by several stakeholders and authorized by the state. In MLM model businesses, the group may also include independent contributors, also known as the distributors.

Crossline

Crosslines are distributors sponsored by the uplines. For example, if you work as a distributor for an MLM company, you will likely be sponsored by an upline. Just like you, your upline can sponsor other distributors to the team. These other sponsored members are your crosslines. Although they belong to the same upline, they share no business interests.

Customer churn

The meaning of customer churn is the number of customers that stop working with you within a given time frame. For example, if you sell some SaaS product or service, your measurement metric is the number of subscribers at the start and end of a particular year. You can calculate your business churn rate by dividing the number of customers you lost during a specific time frame by the number of customers you had at the beginning.

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