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'What does this mean?' If you’ve ever thought this before when looking into network marketing, then you are not alone! 

Whether you’re new to direct sales or a seasoned expert this glossary will help you out when you’re scratching your head wondering what a new phrase or term means. 

Use this Direct Sales Glossary to unpack the different terms and phrases used in the industry.

Anything missing? Let us know!  

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Active

To remain ‘active’ as a network marketer you often need a minimum Personal Sales Volume or minimum amount of products sold. All companies are different so double check the compensation plan. 

Attraction Marketing

Attraction Marketing is a popular marketing method used by direct sellers. Attraction Marketing is focused on sharing a seller’s personal experience with a product or service and how it has changed their life. 

Instead of telling people that a product is good, Attraction Marketing shows people that a product is good. This style of marketing is popular on social media and is deployed frequently by influencers.

See also Social Selling and Network Marketing

Associate/Consultant/Independent Business Owner/Distributor/Sales Representative/Ambassador/Coach

Various ways of describing people running a network marketing business. Most of these terms are decided by the direct sales company. Be aware of these terms for things like social media advertising, support articles and how to describe yourself to others. 

Autoship 

An Autoship in direct sales is when a product automatically ships to a customer. Setting up an autoship for a repeat customer is a great way to earn continuous income and guarantee a great customer experience as you don’t need to worry about accidentally forgetting your customer. 

Don’t let your autoship customers fall through the cracks! Penny sets up automatic tasks reminding you to touch base with your autoship customers each month.

Discover Penny >

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B

Business Builder

A term used to describe someone who is building their business but not working on it full time. They might have a full-time job and work their network marketing business on the side or they are using their network marketing business to supplement their income. 

Want to learn more about the different types of direct sellers? Check out The Types of Network Marketers in your Downline and How to Cater to their Personality Types!

C

Commission 

How much money you make on every product you sell and also a percentage of what your downline sell. 

Commissionable Sales Value/CSV

How much money you will make on each product and/or service sold after minusing the wholesale price and any company discounts as well as referring to your business’s specific compensation plan requirements.

Commissionable Sales Value is different at each company and varies depending on the product, service and level you are at within your company. Always check your Compensation Plan for accurate details. 

Compensation Plan

Every company has a unique compensation plan that details how you will be paid ‘compensated’ by the business. This is usually calculated through a combination of your Personal Sales Volume and your downline’s PSV, as well as different time constraints and rank demands. 

It is worth reading through your plan carefully to understand exactly how and when you will be paid so you can put your efforts into the top income producing activities. 

Corporate

Often, Corporate is used to describe the head office running a direct sales company in contrast to the Field which is made up of the Direct Sellers. 

Cold Prospects

A prospect is someone who you are actively pursuing/wooing in the hope they become a customer or join your team. A cold prospect is a way of categorizing prospects who are less likely to convert so you can choose to spend less time pursuing them or double down your efforts, depending on your strategy. 

See also. Prospecting and Hot Prospects.

Churn

In direct sales, churn is used to describe the rate at which direct sellers leave direct sales. Specifically, the rate at which direct sellers leave their company.  

Look at this metric while researching the direct sales company you plan to join. 

D

Demonstrator Kit/Marketing Package

Available free, for a fee or as part of your initial joining package, these kits give you all you need to sell and market your products. (Note: not all direct selling companies provide these)

Direct Sales/Direct Selling/Network Marketing/Relationship Marketing/Social Selling

These are the various terms used to describe the industry. Direct sales is the most popular term used by corporate, whereas the field uses a wider variety of terms. 

Direct sales literally means selling directly to a customer skipping out the physical store or online checkout process. (Although many direct sales companies now have personalized online checkout basket options for customers)

For more information read What is Network Marketing and How Does it Work?

Direct Sellers, Network Marketers, Social Sellers

The terms used to describe people running a direct sales company.

Note each company has a unique term to describe their direct sellers.

Downline/Team

Everyone ‘below’ a direct seller in their company line. The downline is also known as a team. The downline consists of everyone recruited into the organization by a single person. For example, Person A, recruits 3 people, who each recruit 7 people. All those people are in Person A’s downline and so on and so forth. 

 In most direct sales companies your compensation is based both on your sales and your downline’s sales. 

Dropshipping/Direct Shipping

Instead of purchasing products to then sell to a customer, dropshipping allows direct sellers to place the order on their customer’s behalf and ship their customer’s products directly to the customer from the head office. Dropshipping is used in direct sales to save time and money.

E

E-Commerce

Selling products and services on the internet.

F

Field

Direct sellers are collectively called the field to distinguish between the corporate side of the business. 

Each direct sales company has an administration side - Corporate creating the products, organizing the company, handling the payments, arranging digital solutions and in charge of overall marketing. While the field are the sellers out in ‘the field’ being brand ambassadors,  liaising with customers and offering a personalized customer experience for all.

G

H

Host

The direct seller leading a direct sales party. Or the person who booked the direct sales party (depending on company terminology). 

See also Party

Hot Prospect

A prospect is someone who you are actively pursuing/wooing in the hope they become a customer or join your team. A hot prospect is a way of categorizing prospects who are more likely to convert so you can choose to spend more time pursuing them for a hopefully easier sale. 

See also. Prospecting and Cold Prospects.

I

J

K

L

Leader

Anyone within direct sales who starts building a team becomes a leader. Different from being a customer or a seller, a leader is responsible for training, motivating and coaching their team. 

Leaders that build large teams are often sought out by the corporate side of the business to gain their insight on what the field needs to see success. 

Looking to grow your business and become a leader? Read How to Start Building a Team?

Leg

In network marketing, leg’s refer to the teams that the people you recruited are building. 

Different companies have different leg plans. Some limit the amount of legs you can have, other’s limit the amount of people that can be recruited at each level of a leg, in some companies there are no legs.

Note legs are usually only in reference to people building teams and do not affect how many customers a direct seller can have. 

Check your company’s compensation plan to see how many legs you can have so you know where to focus your efforts building your business. 

M

MLM/Multi-level Marketing

The MLM business model is predominately used by the direct sales industry. Direct sales companies sell products through unsalaried distributors who earn on commission. To earn more, distributors are encouraged to recruit more sellers to the direct sales company, hence, creating a multi-level marketing business model.

N

Network Marketing

Network Marketing is a business model in which products and services are sold from person to person, meaning directly from the salesperson to the consumer. 

While Direct Sales and Network Marketing are interchangeable some differentiate the two as direct sales focussing more on selling high-value one off items whereas network marketing is leveraging your close network of friends and family to sell day-to-day products. The size of your network is then directly related to your success. 

See also Direct Sales.

O

Opportunity

In direct sales, an opportunity is how starting a direct sales business is described to potential new sellers. 

P

Party

Lots of direct sellers host parties as a fun way to demonstrate products and encourage sales. Depending on the product depends on the type of party. 

Parties were one of the original ways direct sellers gained business. 

Penny/Penny App

Penny in direct sales is an app and enterprise solution. For direct sellers, Penny is the app of choice for running your business. 

For direct sales organizations, Penny goes so much further than a social sales enablement app. It provides companies with the data they need to see how the field is working, includes direct sales training and onboarding within the app, builds good habits from day one for the field,  and opens up communication between corporate and the field. 

Ask your direct sales company if they’re using Penny or download the free Penny app today.  

Personal Sales Volume (PSV)/ Personal Volume (PV)

Personal Sales Volume is the value of the products you personally have sold that month. This includes the products you have bought yourself and the products your direct customers have bought. (It does not usually include the products your downline have sold)

In many direct sales companies to remain ‘Active’ as a direct seller you must maintain a certain PSV each month. Double-check your company’s compensation plan for the details. 

Personal Volume is the same as Personal Sales Volume. 

Prospecting

When direct sellers are looking for customers and team members the process of researching, contacting and wooing them is called prospecting. Until a person becomes a customer or a team member, they are called a prospect. 

Also see, Cold Prospect and Hot Prospect

For more information check out What is Prospecting? 

Q

R

Ranks

Ranks in direct sales are the different levels within the field that direct sellers can attain by meeting certain criteria. For example, hitting a specific Personal Sales Volume or having your downline each reach a specific Personal Sales Volume. 

In some companies, depending on what rank you are in depends on how large you can grow your business. For example, only those hitting a certain Personal Sales Volume will be allowed to add more legs to their team. 

Each direct sales company has different ranks. Check your Compensation Plan to understand the different ranks and what you need to do to move up the ranks.

Rank Advancement

The process of moving up the different ranks within your organization. Consult your Compensation Plan to see exactly what the ranks are and what you need to do to move up the ranks. 

At each level, there’s different criteria to maintain that rank and move to the next rank. Different ranks usually come with different perks, bonuses, compensation plans etc. 

Rank Advancement is unique to each company. 

Recruit/Enroll

Recruit in direct sales and enrol mean to actively bring people into your company. Recruit generally means to bring them on as a new seller, while enroll means to bring them on as a new customer. However, these terms can sometimes be used interchangeably between teams and companies. 

For more information about effective recruitment techniques, check out Building a Team and Prospecting Playlist in the Pennyverse. 

Relationship Marketing

Often seen as synonymous with direct selling and network marketing, Relationship marketing in direct sales is a business management style focused on fostering long term relationships with committed customers (vs continuously seeking new customers).

Relationship marketing, more so than others, puts the customer first. 

Relationship marketing is also a marketing strategy outside of the direct sales industry. 

See also, Direct Sales and Network Marketing

Retention

For network marketing, this means how many associates/sales reps continue to work at a company. Retention rates are usually worked out over a period of time. Looking at a retention rate of a company can be a good indicator of the support available for direct sellers however it can be affected by many outside factors. 

For leaders, looking at the retention rate of customers and team members in their downline helps evaluate the level of customer service provided and the success of team training, management and motivation. 

Rewards/Bonus/Incentives

Physical gifts, discounts, holidays, money etc. are given as rewards for high performance, consistency or hitting certain ranks in direct sales.

Most Compensation Plans detail what rewards can be expected at each rank. 

S

Social Selling

Social selling in direct sales means leveraging social media to both sell products and discover new audiences. Social media can be used to find new customers, connect with existing customers and generate demand for products. 

It is also a marketing strategy outside of the direct sales industry. 

Social selling, like direct selling, network marketing and relationship marketing is a term used by direct sellers to describe the industry they are in. 

See also, Direct Sales and Network Marketing

Sponsor

A sponsor in direct sales means the person who ‘sponsored’ you to join the company. Your sponsor acts as your guide through network marketing. You can ‘sponsor’ other people to join your company and they will join your downline. 

See also Upline, Downline, Leader

T

U

Upline

The opposite of downline. Sometimes known as a sponsor, your upline is the person who recruited you into the company. Your upline continues until you reach the person who originally joined the direct sales organization. 

V

W

Y

Z

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