As in any other kinds of businesses, the MLM marketing business has its own string of terminologies and jargons which a newbie has to be familiar with. Here are some of the common ones:

Upline
Your immediate upline is the one who recruits you into the business organisation. Then you in turn  begin to recruit people as your downline . An upline earns commission from your group volume of sales. Usually your upline is responsible in training and motivating you so that you would be able to succeed in the business. However if your upline is also new like you, then the upline leader or mentor would help in the guidance and training.

Upline Leader/Mentor
An upline leader actively trains and guides his group of dowlines. He needs to train  his downlines in many areas of the business such as the marketing plan, product knowledge or sponsoring techniques. Of course, when a newbie joins an organisation, it is his responsibility to attend meetings to learn from his upline mentor. An upline mentor is there to actively counsel his down lines especially new ones..

Builder
A builder begins his business by recruiting people to form his down lines. He is a distributor of the products or services he intends to deal with. Normally a builder is first convinced of the quality and  viability of the product or service he has confidence in and wants to recommend them to other people. At the same time he builds his   network marketing business with the products or service and recruits other people to join him too.

Depth
Depth refers to the level of your downline’s downline. A person who has built  depth usually would have sponsored many downlines who are actively getting their downlines to join him. Usually he would have reached a certain level where he has a secure organization.

Leg
A leg is a downline group in your network starting from the person you personally sponsored. He and all the downlines under him are considered one of your legs. Depending on the marketing plan of the MLM business,  a  distributor usually trains, motivates and develops many legs simultaneously.

Sponsor
When you join an MLM business, your sponsor is the one who directly introduces you into the business and you are placed  under  him or her.

Downline
The people who join you in your business under you or your downlines   in the organisation are your down lines. They may be many, many levels down your hierarchy and at times you may not even know them personally.

Sideline/Crossline
The people in the sidelines or cross lines are not considered in your organisation and you do not gain financially from their sales.
However, depending on the culture promoted in the company, they are either perceived as the worst competitors, or valuable allies. You have to know that  somewhere along the line, they are also in your upline’s group, so helping your sideline means helping your upline and his group.

Front Line
These are downlines that are personally sponsored by you or are directly under you. You must be directly responsible for their success because you are the one who introduced them to this business. The people in the front lines are very important in your organisation as they would eventually be your downline group leaders as they expand in the number of their own down lines . When they achieve successful levels of performance in the sales plan they would determine the status of  your achievement in the business too. Normally a builder tries his best to push the success of a few front lines and even strategise putting his new downlines in their groups to strength the teams and  increase their total sales volumes. The development of your frontline will determine the success or  failure of an entire downline group.

Width
The number of people you can personally sponsor. Matrixes and Binaries usually limit the maximum width. Normally a strong downline is one that builds and develops a very large width.

Override
An override means you are paid a certain percentage of sales volume over your downline’s  group. Normally an override is calculated on the performance sales volume of  your frontline only.

Profit Sharing Pool
Profit sharing is a bonus that is paid out to high  achievers who have reached certain conditions in the marketing plan. A pool is a collection of sales volume from distributors all over the company regardless of whether the sales volume comes from your sideline.

Maintenance
A mandatory (sometimes optional depending on certain criteria) sales volume a distributor must achieve. This is only fair in the sales plan otherwise it will look as if your down lines work so hard to make money for you. At the same time you are not showing a good example to your downlines  if you do not generate sales volume too. Often maintenance is done to override your downline, become eligible for profit sharing, or maintain a certain rank or even the distributorship.  This is enforced because the company needs to make money as well.

Total Payout
A  percentage of a product sold by the company  is set aside for distributors and retail sales only. The company only keeps the remainder.

In MLM or network marketing businesses, compensation plans are what distributors really want to look into as that is how he is going to earn his income from commissions from his and his downlines’ volume of sales. Compensation plans differ in every organization. It is indeed very overwhelming or even confusing for a newbie to comprehend the big circles and small circles at the first sponsoring or introduction into the business.

Therefore it would be an advantage to sponsor someone who is familiar with network marketing in the first place. However if a newbie is introduced then the distributor has to be patient and slowly familiarize him or educate him with the compensation plan and help him along the way in his new found business. The distributor has to find the right compensation plan that works for him and that can help him earn money. Therefore what’s most important is that he understands the plans well especially on how he can earn his commissions based on his downlines’ volumes and his own volume of sales.

Distributors will always be looking for new downlines to join him in his organisation. But before he goes a step further in roping in his downlines, it is almost imperative of him to master the knowledge of his company’s compensation plans. One will never know when one would meet someone who might have just left another company and is well versed with compensation plans already. How can the distributor be a good leader, exude the type of confidence so needed to influence others into the business if he himself is not well trained in the business yet?

It is not true that people join an MLM business because of a superior compensation plan. More often than not distributors might already know his new downlines as he would like to share his money- making venture with them too. Or they could be his customers who have confidence in his products or services and give him repeat sales. It can be said that it is actually the leadership, influence and confidence that attract new downlines to a good distributor. There could also be that chance opportunity that a company collapses, distributors have a fallout with his upline and there you are, some well trained people waiting to join you in your company. You will never know!

Now that we have set the record straight, knowing your plan and their plan well will bring you one step to closing a new sale or sponsoring a new distributor from another company.

It sounds unethical to pinch downlines from other companies. There is actually no rules that say you can’t really. However be careful not to do this within your company as you might be disqualified or terminated in your distributorship. Some form of competition is healthy but it would be better for the distributor to sponsor new people out of the company. Remember, your downlines might also want to leave you to join other companies too! Then it is time to realize and look into the reasons and improve in areas like leadership qualities, support and motivation that you might have failed to provide them with.

Having said so much about compensation plans of MLM companies , it is then advisable that a distributor invests a lot of time and effort at learning the details of his own company plans as well as other companies’ plans too. It would benefit him a lot to attend as many opportunity meetings as possible to gain more knowledge about compensation plans and other aspects of the business in order to succeed in his network marketing business.

A new kid on the block in the Multi-Level Marketing affiliate program often makes some mistakes at the beginning. Many of them are too naive, enthusiastic and ill-prepared that they fail to make an in-depth survey of the background of the company leadership. They do not check out whether the company has enough experience in this field too. The newbie also lacks the knowledge of basic marketing principles too. As such he would meet a lot of problems or failures in the beginning of his venture into the MLM business.

A newbie has to be very careful to make the right choice of a dependable and trustworthy company that can show proof of success in such affiliate marketing. He could be misled into believing in the fantastic offers which more often than not are actually of short term high rewards by some fly by night companies that do not consider the long term benefits for the companies. Often a newbie realizes too late that he had been misled and finds that he has lost lot of money and time in the company.

Before venturing into such a business, he should gather information about the rules and principles of MLM marketing strategies.. He should get in touch with experienced people who are skilled in MLM marketing and join hands with them in the affiliate programs. Simply recruiting anyone interested in your program won’t do as he needs recruits of caliber, skilled and experienced who would be able to help generate sales volume. A newbie should refrain from being desperate in his recruiting efforts. He should carefully pick and choose ones who have enough experience to help him succeed in the MLM marketing program together.

Strategy plays an important role in recruiting down lines. He should target those who are able to help him generate links and sales. Understanding the marketing plan is of utmost importance as he would be able to build his down line strategically in order to maximize income and sales. He should make calculative moves in placing his recruits under his down lines in order to generate revenue from the groups. Thus he should actually know the number of down lines and recruits and build the hierarchy under leaders so that he can earn the ideal income from them.

Probably another mistake a newbie makes is signing up his own family members and friends in his MLM program. He should venture out of family and kin and look for new faces and people who possess some entrepreneurial aptitudes to join him in his MLM business .Of course people who are experienced and possess skills and knowledge of the MLM programs.

When a person is new in the MLM business, he may be overly enthusiastic and try to push or force sell products that he hardly know anything about. Thus it is always advisable to invest some money in some products, use them to be convinced about their worth. In this way the customers can see through your sincerity and belief in the benefits of the goods. Most of the time, customers buy out of obligation and the next time they will try to avoid seeing his face again. Once the customers are convinced of the quality of the products or services, they would naturally follow-up and the newbie does not need to try selling to them at all cost.

Perseverance and motivation are key factors in making a success out of an MLM business. A person has to be patient in building the down lines who believe in him and the products or services. A newbie cannot afford to be idle and expect to generate income from down lines who work hard. He has to work together with the new down lines giving them motivation and transferring skills and knowledge about the strategies of the business to them. He has to give customers confidence in his services or products as they would also recommend new customers to him. And of course once a customer has confidence in a product or service from his company, he would like to expand his usage of other products too. In this way then only can he generate more revenue in his business. Leadership by example is the way in MLM programs- a successful leader or up line in the business works and trains his down lines hard in order to build his team successfully.