MLM Terminology

If you are new to the MLM world, there are a lot of acronyms and slang that you are going to need to pick up on, and quick. In order to understand the basics of working within an MLM — from wrapping your mind around the compensation plan, the ins and outs of the company hierarchy, and of course the products. So rather than racking your brain and spending hours and hours on Google, start with this quick read and go from there.


This is an abbreviation for Multi-Level Marketing. There are many different names for MLM: including network marketing, direct sales, referral marketing, home-based business. There are other names of course, but these are the most common. Some have referred to MLM companies as pyramid schemes, however, pyramid schemes are illegal and the FBI and SEC routinely monitor the industry for pyramid schemes operating posing as an MLM.


If you just signed on with an MLM, you are officially a distributor. Each MLM calls it something different. You might be known as a consultant, marketing executive, independent sales representative, but your responsibility is simple: sell. Sell the products. Sell the services. And then train others to sell the products and services.


Your downline consists of the salespeople under you that are also selling products and services. As the people under you sell products and services, you can earn a piece of their profit. As they recruit people under them and grow their own downline, your business grows and grows. For this reason, a career in the MLM world has the potential to be very lucrative after you have grown a significant downline.


A leg refers to a piece of your downline. Depending on your MLM company’s compensation plan, you may have an incentive to not only grow your downline top to bottom, but also side to side. A leg is one of the branches in your downline. The more legs you have, there is more potential to have steady income from your downline each month and to reach more incentives and bonuses.


Stands for personal volume. Usually the MLM company requires a certain amount of product to be purchased regularly by distributors to be sold to consumers. Distributors usually can purchase products at wholesale prices or at least a discounted rate that is typically unavailable to consumers. Sometimes PV can go by BV (Bonus Volume) or Business Volume.
Bonus Pool
The bonus pool is a piece of the MLM profits that is used to reward top distributors on a regular basis. The bonus pool is usually only available to qualified distributors who have achieved a certain threshold of sales within a given period. Make sure to research the requirements within your MLM.

Car Bonus

Only a few MLMs have this bonus still, including Mary Kay, Thrive, Kyani, Visalus, and many others. The car bonus program is often advertised as receiving a free car after reaching a certain sales threshold. The truth is that instead of receiving a free car, you simply receive a monthly reimbursement for the car payment. The car itself is registered in your name and you are responsible for maintaining the payment.

These are just the basics to understanding the MLM world. If you have any questions, you should direct them to your sponsor, or the person who helped you register as a distributor. They will point you in the right direction so you can start working on your downline and continue to help grow theirs.

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