MLM Definitions

Following are my definitions for terms often used in the business world, especially focused on Multi-Level Marketing (MLM).

Read a detailed explanation of my philosophy on MLMs.

You’ll find the main Definitions page here.

strategy, strategic risk, risk management, definitions, reference

Affiliate Sales
Ambassador
Basement Qualified
BossBabe
Brick, Click, and Flip
Brick-and-Click
Brick-and-Mortar
Business Owner
Buyer
CEO
Check the Box
Click-and-Mortar
Direct Sales
Direct Sales Associate
Distributor
Downline
Employee
Enthusiast
Entrepreneur
Founder
Franchise
Front-Loading
Garage Qualified
Girl Boss
Goal
Goal Digger
Home-Based Business
Hunbot
Hustle
Independent Contractor
Marketing
Marketing Director
Multi-Level Marketing (MLM)
Network Marketer
Online Business
Owner
Preferred Customer
Promoter
Pyramid Scheme
Reseller
Sales Associate
Sales Representative
Salesy
Specialist
Sponsor
Team Member
Upline
WAMBAM

Affiliate Sales

A model where an “affiliate” enters into a contract with an established company (such as Amazon, Ebay, Walmart, etc.) to earn a commission for each visitor or customer that is funneled to the merchant by the affiliate’s own marketing efforts.

Another version of this is to purchase products through a brokerage network and receive a commission fee.business model, affiliate, affiliates, affiliate sales, network affiliate, affiliate sales business, strategic growth, risk management

Read more: What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Ambassador

An authorized high-ranking diplomatic official who is sent by her or his administration to serve as a permanent representative to another entity.

This is an Ambiguous MLM Rep Title and should be used with caution.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Basement Qualified

See Garage Qualified

BossBabe

A woman who presents herself as a successful business owner or Entrepreneur (but may actually be selling Multi-Level Marketing products).

Although this term is intended to encourage female strength, it can be perceived as demeaning and exploitative.

Brick, Click, and Flip

A business that integrates offline (“brick”) and online (“clicks”) access with a physical catalog or other marketing materials (“flips”).

Also known as WAMBAM (“Web Application Meets Bricks and Mortar”)business model, brick click flip, brick-and-click, brick click and flip store, business, physical business, website, catalog, strategic growth, risk management

Read more: What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Brick-and-Click

A business with a physical store (“Brick-and-Mortar”) that offers in-person purchases (“brick”) as well as a website that allows online shopping (“click”).

Also called Click-and-Mortar.business model, brick and click, brick-and-click store, business, physical business, website, strategic growth, risk management

Read more: What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Brick-and-Mortar

A physical storefront that provides products or services on-site, with no eCommerce options.business model, brick and mortar, brick-and-mortar store, business, physical business, strategic growth, risk management

Read more: What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Business Owner

An individual who has partial or full financial control of a business entity and receives a financial profit from its success.

Also known as Owner, Small Business Owner, or Boutique Owner.

Although an Independent Contractor (IC) is considered a small business “owner” for tax purposes, she or he is not a true Business Owner because they have no ownership, equity, or control apart from their contract with a parent company.

ICs who resell and recruit Multi-Level Marketing products often misrepresent and inflate their status by using terms like “Owner,” “Boss,” “CEO,” or “Entrepreneur.”

This is an Inappropriate MLM Rep Title and should only be used by a qualified professional.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Buyer

1) A person who acquires ownership of goods, or usage of services, in exchange for money.

2) A professional who specializes in selecting materials, goods, or services based on market analysis, purchase negotiations, bulk buying, and coordination of delivery. Also called a Purchaser. (Source: BusinessDictionary)

This is an Ambiguous MLM Rep Title and should be used with caution.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

CEO

A “Chief Executive Officer” holds the senior-most position in a corporation. Her or his primary responsibilities include:

  • make major corporate decisions,
  • manage overall operations and resources, and
  • communicate between the board of directors and corporate operations (often with a position as the board, usually as Chair).

See Business Owner

Check the Box

A fail-safe step in many MLM businesses which requires Independent Contractors (ICs) to state “I agree that I have sold at least 70% of my previous order.” Many ICs disregard this rule (often at the encouragement of their “upline”) with an overconfidence that they will sell it quickly, and that the discount is worthwhile.

By requiring ICs to check this box prior to placing an order for more products, the company can certify that:

  1. Their ICs are not “front-loading” (purchasing products with their own money prior to selling to outside customers);
  2. They are not operating as a “pyramid scheme,” because ICs clearly indicate the majority of their income comes from outside customers;
  3. If the IC tries to leave the MLM and ask for a refund of their remaining stock, the company can refuse to refund more than 70% of their last order—because the IC stated it had all been sold.

Click-and-Mortar

See Brick-and-Click

Direct Sales

A business generation method that uses a hired or contracted salesperson who has face-to-face (“direct”) interaction with customers and earns a commission for each product or service sold.

The terms “Direct Sales” and “Multi-Level Marketing” are commonly confused, although technically Direct Sales reps do not earn money by recruiting others to join their team.business model, direct sales, direct selling, direct networking, network sales, strategic growth, risk management

Read more: What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Direct Sales Associate

Divided into two models:

  • single-level marketing, where the salesperson makes money by buying products from an organization and selling those products directly to customers (an Appropriate MLM Rep Title); and
  • multi-level, where the salesperson earns money from both direct sales to customers, and by getting a commission payment for sponsoring new sellers who work under them.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Distributor

An independent agent who enters into an agreement to sell a company’s product but is not entitled to use the manufacturer’s name as part of its business name.

This is an Appropriate MLM Rep Title.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

 

Downline

In Multi-Level Marketing, the multiple levels below an Independent Contractor (IC), whose sales generate a perpetual commission from the IC and everyone in their downline (sales agents recruited under the IC).

See Upline and MLM

Employee

A person who agrees to perform services for a person or company in exchange for payment and whose performance, methods, and results are closely monitored and controlled by the company. Income taxes are withheld by the employer, and the employee is required to submit a W2 tax form in the United States.

Enthusiast

Someone who is very involved and interested in a topic or activity.

This is an Appropriate MLM Rep Title.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Entrepreneur

An individual who takes great risks to create something new and innovative in the marketplace, and creates a system that can run on its own (without the entrepreneurs constant involvement). Their system can be replicated and eventually sold at a profit.

Most business owners are not entrepreneurs.

An MLM rep is also not an Entrepreneur, because theyre NOT creating something innovative or developing a self-propelled delivery system (apart from those provided by the company with which they are contracted).

Variations on this title (which begin or ending with “-preneur) include:

  • Creativepreneur [“creative” + “entrepreneur”]
  • Entrepreneur-ess [“female entrepreneur”]
  • Fashionpreneur [“fashion” + “entrepreneur”]
  • Fempreneur/ Femtepreneur [“female” + “entrepreneur]
  • Ladypreneur [“lady” + “entrepreneur”]
  • Mompreneur or Mumpreneur [“mom” + “entrepreneur”]
  • Multipreneur [“multiple” + “entrepreneur”]
  • Solopreneur [“solo” + “entrepreneur”]
  • Soulpreneur [“soul” + “entrepreneur”]
  • Spapreneur [“spa” + “entrepreneur”]
  • Wellpreneur [“wellness” + “entrepreneur”]

This is an Inappropriate MLM Rep Title and should only be used by a qualified professional.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Founder

A person who establishes or sets up an institution. From the Latin word fundator meaning “to lay a foundation” or “one who casts metal.”

This is an Inappropriate MLM Rep Title and should only be used by a qualified professional.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Franchise

A business model that requires the purchase of an established, proven, systematized business. It includes all the branding, advertising, marketing, policies & procedures, and training materials needed to run a successful company. The franchisee invests a significant up-front cost and ongoing royalty payments in exchange for the license, strategic and operational support, access to a loyal customer base, and training from the company’s main office.business model, franchise, franchising, franchise store, physical store, strategic growth, risk management

Read more: What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Front-Loading

A Multi-Level Marketing tactic where Independent Contractors purchase products using their own money in order to qualify for bonuses or hit sales targets, with the overconfident belief that they will eventually sell the products to outside customers.

Garage Qualified

A condition where the Independent Contractor (IC) in a Multi-Level Marketing (MLM) scheme purchases a large quantity of products in order to remain on “active” status, receive discounted rates, hit sales targets, and earn “bonuses” for their sales.

Unsold merchandise is stored in the IC’s garage, basement, closet, or storage unit for weeks or months—causing the products to become unsellable once they reach the “sell-by” date. MLM Companies also frequently introduce new products that eclipse the amassed pile of products sitting in the garage.

When ICs use this tactic to stay “active, it is a warning sign that the MLM company relies on its ICs as the primary consumers of its products—not as distributors who sell the products to outside customers.

Girl Boss

An enthusiastic young woman who has no particular talent or skillset yet is eager to gain fame and/or money on platforms like Instagram and YouTube.

Although this term is intended to encourage female strength, it can be perceived as demeaning and exploitative.

(Grace’s Take: Any female who is over 18 years old is a WOMAN, and should never be called a “girl.” /end rant)

Goal

The end result toward which effort is directed. In strategic terms, this is known as an Objective. A goal must be SMART (Specific, Measurable, Achievable, Results-Oriented, Time-Bound) and CLEAR (Collaborative, Limited, Engaging, Actionable, Refinable).

See Strategic Objective

Goal Digger

Someone who wants wealth and is willing to set goals and work hard to get there.

(A play on the term “Gold Digger,” whose interest in developing a relationship is motivated by a desire for money and stability).

Home-Based Business

A business model where the owner provides services (or sends products) to customers out of a home office, rather than a Brick-and-Mortar location. An owner has full decision-making control of their business.business model, home-based, work-at-home, working at home, home-based business, homestead business, strategic growth, risk management

Read more: What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Hunbot

A typically young to middle-aged woman who proclaims to “have her own business,” yet has actually fallen prey to a multi-level marketing scheme (such as It Works, Plexus, Younique, Lipsense, LuLaRoe, etc.).

The hunbot attempts to sell poor-quality, high-priced products to unsuspecting women by luring them to buy products and join their “team.” She frequently sends social media posts with excessive emojis, hashtags, and a patronizing use of the word “hun” (short for “honey”) using faux friendliness that is robotic (“bot”).

Hustle

The use of aggressive, forceful, and rapid movement to get something done, especially in business transactions. Frequently used to describe the energy needed to succeed as a Multi-Level Marketing sales rep.

See Multi-Level Marketing

Independent Contractor

A person who makes an agreement to perform services for a person or company, and whose performance and methods are not subject to the control of the company—only the result of their work.

An Independent Contractor is not considered an employee; their earnings are subject to Self-Employment Tax and are required to submit a 1099 tax form in the United States.

In Multi-Level Marketing, this role is also called a Sales Agent, Consultant, Distributor, Member, or Promoter.

See Owner

Marketing

The art and science of identifying needs and providing products and services that meet those needs, are easily available, and support the foundation of enterprise and economic activity.

Multi-Level “Marketing” is a poor attempt at selling, shilling, shystering, trickery, deceit, false promises, and quackery.

(Source: Discussion with Helen Woodruffe-Burton PhD, Professor of Marketing at Edge Hill University in the UK)

Marketing Director

An individual who is hired to oversee and manage a company’s ability to create, keep, and satisfy its customers including branding, product promotion, new product development, market study, and customer relationship management.

This is an Ambiguous MLM Rep Title and should be used with caution.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

 

Multi-Level Marketing (MLM)

A systematized compensation system in which an “Independent Contractor” (IC) sells products or services to consumers, AND where they are incentivized to recruit additional distributors under them in multiple “levels.”

MLM is also known as

  • Cellular Marketing
  • Concentric Marketing
  • Consumer Direct Marketing
  • Direct Selling
  • Dual Marketing or Dual-Level Marketing
  • Home-Based Business Franchising
  • Inline Marketing
  • Network-Based Affiliate Marketing
  • Network Marketing
  • Person-to-Person Marketing
  • Party Plan
  • Pyramid Selling
  • Referral Marketing
  • Seller-Assisted Marketing

More info at MLM Basics: Why are there so many names for MLM?

The Multi-Level Marketing business model is primarily focused on attracting sales representatives to consume and promote poor-quality and over-priced products, who are encouraged to influence, recruit, and mentor others to join the company in multiple layers of compensation. Anyone at a level above the IC is called an “upline,” and everyone recruited by the IC (and by each of their recruits) is called a “downline.”

This type of business often uses very predatory tactics by targeting people who are financially, emotionally, and mentally vulnerable, and using cult-like tactics to pressure them into joining their “tribe.”business model, multi-level, multi-level marketing, MLM, MLM company, MLM sales, MLMs, network marketing, strategic growth, risk management

Read more:
Why I Hate MLMs: My Story,
What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM? and
11 Ways Multi-Level Marketing is Like a Cult

Network Marketer

A person who acts as an independent agent or distributor of the goods and services of a distribution network; they are also encouraged to build their own sales force by recruiting and training other independent agents. (source: BusinessDictionary)

This is an Appropriate MLM Rep Title.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Online Business

A business that only exists online, with no physical presence. All marketing, service or product delivery, and communication occurs virtually.

Also called Online Shopping, Click Business, and e-Commerce.

Sub-models can include:

  • Advertising based
  • Affiliate sites
  • Drop Shipping
  • Physical Product Sales
  • Subscription-Based Site

business model, online business, website business, online sales, web sales, strategic growth, risk management

Read more: What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Owner

See Business Owner

Preferred Customer

A highly valued [i.e. Preferred] recipient of a good, service, product, or idea obtained from a vendor via a financial transaction [i.e. Customer].

This is an Appropriate MLM Rep Title.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Promoter

A person who helps to generate interest, raise money, or support a cause or aim.

This is an Appropriate MLM Rep Title.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Pyramid Scheme

A form of investment where a paying participant contributes money and recruits additional participants (with investment returns given to the earliest “investors”), but where no product or service of inherent value is being exchanged. (See Helpful Info About MLMs)

business model, pyramid business, pyramid scheme, pyramid model, pyramid MLM, pyramid company, strategic growth, risk management

Read more: What’s the Difference Between Brick-and-Mortar, Franchise, Direct Sales, and MLM?

Reseller

A company or individual who purchases goods or services with the intention of selling them rather than consuming or using them.

This is an Ambiguous MLM Rep Title and should be used with caution.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Sales Associate

An employee of a company whose primary task is to sell the company’s product or service. Technically, an MLM Contractor should not use this title, because she or he is not employed by the company.

This is an Ambiguous MLM Rep Title and should be used with caution.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Sales Representative

A person selected by a company to solicit business [i.e. Sales] on its behalf in a specified territory [i.e. Representative].

This is an Ambiguous MLM Rep Title and should be used with caution.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Salesy

A term the implies a pushy, overly aggressive style to generate sales.

Most MLMs encourage reps to connect with buyers in every possible circle (family, friends, neighbors, children’s friends, acquaintances, etc.) and begin with non-sales-related messages at first, to appear as if they are building a genuine friendship, before presenting an “opportunity” to invest in the products. Reps who send constant messages (spam) or pressure people to buy (“I’m doing this business for my family!” “Help me out!”) are using salesy tactics.

Can also be spelled “sales-y” or “salsey” [sic].

Specialist

(Includes job titles like Personal Trainer, Health Coach, Aromatherapist, Nutrition Specialist, Health and Wellness Expert, Makeup Artist, Skin Care Specialist)

An individual who has special training, skills, and proven abilities to provide value to customers.

This is an Ambiguous MLM Rep Title and should be used with caution.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Sponsor

In Multi-Level Marketing, the person who recruits someone into an MLM company. This person (and all levels above them) is considered the recruit’s “upline” and receives a percentage of the recruit’s sales.

See Upline and MLM

Team Member

A person who belongs to a specific group which endeavors to reach a common goal. This is an Appropriate MLM Rep Title.

Read more: Which Titles to Use if You’re a Direct Sales or MLM Rep

Upline

In Multi-Level Marketing, the multiple levels above an Independent Contractor (IC) who earn sales commissions from the IC and everyone in their downline (sales agents who are recruited under the IC).

See Downline and MLM

WAMBAM

An acronym for the term “Web Application Meets Bricks and Mortar.”

See Brick, Click, and Flip

 

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