MLM glossary

Structure and placement

Upline and downline

Your upline is everyone above you in the network, starting with your sponsor. Your downline is everyone placed below you, whether you sponsored them or they arrived through spillover.

Sponsor and placement

The sponsor is the member who introduced a new joiner, and usually earns the referral income. The placement is the position in the tree where the new member sits. In binary and matrix plans the two can differ, because the sponsor's own positions may already be full.

Frontline

The members on your first level, directly below you. In a unilevel plan everyone you sponsor is on your frontline; in a binary or matrix plan the frontline has a fixed number of positions.

Leg

A branch of the tree that starts from one of your frontline positions. A binary plan has exactly two legs, left and right. The leg with more volume is often called the power leg, and the other the weaker leg. See it in the Binary MLM Plan.

Spillover

Placing a new member further down the tree because the positions above are already full. Spillover can give a member downline they did not recruit. See it in the Matrix MLM Plan.

Width and depth

The two dimensions of a matrix. Width is the number of positions on each member's first level; depth is how many levels commission is paid on. A 3×3 matrix has a width of 3 and a depth of 3. See it in the Matrix MLM Plan.

Genealogy tree

The map of a network that shows who sits where and who sponsored whom. Members see their own downline; the admin sees the whole tree.

Volume and pairing

Business volume (BV)

The value assigned to a sale for calculating commission, separate from the price paid. Binary pair income is usually calculated on BV.

Point value (PV)

Points assigned to a product, often used for qualification and rank, such as a minimum monthly personal PV to stay active. Some plans use PV and BV interchangeably, so the plan document should define each.

Pair matching

In a binary plan, pairing volume on the left leg against an equal amount on the right. The matched amount is what pair income is paid on. See it in the Binary MLM Plan.

Pair ratio

How much volume, or how many members, on each side make a pair. 1:1 is standard; some plans need a 2:1 or 1:2 first pair before income starts. See it in the Binary MLM Plan.

Carry-forward

Unmatched volume on the stronger leg of a binary plan, kept for the next cycle instead of being discarded. See it in the Binary MLM Plan.

Payout rules

Capping

The most a member can earn from an income type in a period, such as a daily cap on binary pair income. Caps often rise with rank. See it in the Binary MLM Plan.

Flush-out

Removing volume or income that will not be paid, such as the excess above a cap, or unmatched volume after a set period or when a member goes inactive. See it in the Binary MLM Plan.

Level income

Commission paid on business generated at each level of your downline, at a rate set for each level. See it in the Unilevel MLM Plan.

Compression

Skipping inactive or unqualified members when commission is calculated, so the active members below them move up a level. Common in unilevel plans. See it in the Unilevel MLM Plan.

Breakage

Commission that is not paid out because nobody qualified for it, for example when an upline member is inactive and the plan does not use compression. It stays with the company.

Matching bonus

A percentage of the income earned by the people you sponsored, paid to you, sometimes across several generations.

Cycling

In a board plan, the point at which a full board pays the member at the top and splits into two new boards. See it in the Board / Matrix Cycle Plan.

Re-entry

A new position given to a member who has cycled out of a board or completed a matrix, so they can earn from it again. See it in the Board / Matrix Cycle Plan.

Total-return cap

In an investment or ROI plan, the most a single package can pay across every income type, usually a multiple of the package value. See it in the Investment / ROI Plan.

Running the platform

Payout cycle

The period over which income is calculated and released, such as daily, weekly or monthly. The cycle boundary, including its time zone, decides which cycle a sale belongs to.

Rank

A level of achievement, such as Silver or Gold, reached by meeting volume or team targets. Ranks often unlock deeper levels, higher caps or extra bonuses.

Repurchase income

Commission earned on repeat product orders from members already in the network, as distinct from income on new joinings.

E-pin

A prepaid activation code bought from the company and used to register or activate a member. E-pins can usually be transferred between members.

Wallet

A member's balance on the platform, where every credit and deduction is recorded before money is withdrawn.

KYC

Know your customer: the identity check a member completes, usually with PAN and bank details in India, before withdrawals are allowed.