Glossary of Direct Selling Terms

Whether you are a new social influencer, brand ambassador, or a successful business builder, we're sure you've had a time when you heard a direct selling term you didn't know the meaning of or weren't sure if you were using the word correctly.

Here is a comprehensive glossary of industry terms used in the direct selling, multi-level marking (MLM), influencer marketing, and networking marketing industries to help you sound like an expert from day one.

If you found we missed a term, please let us know here!

Ambassador Marketing

Ambassador marketing is when brands leverage their top customers, industry experts, celebrities, or employees, by turning them into brand influencers or brand ambassadors. Ambassador marketers build communities of influencers through social media channels, face-to-face, and word-of-mouth.


Autoship is a method by which products are automatically ordered periodically and shipped automatically to the customer or distributor. The autoship order is usually monthly but can be weekly or daily in some cases.


Binary is a term used to define the organizational structure of the genealogy tree of distributors. In a binary tree, each distributor or rep may only add two downline members under them. These represent their right and left legs, in which additional members will be added.


The meaning of Bonus, as used in the multi-level marketing industry, is the money or product given to a distributor as compensation for performance or hitting key sales objectives.


The definition of breakage is when the actual payout of the company compensation is less than the maximum defined by the compensation plan for any given compensation period. There are several ways breakage can happen, from unearned bonuses to vacant positions still earning commissions.


Breakaway is a compensation plan in MLM companies that includes breakaway groups. A breakaway group consists of a leader who has reached the breakaway rank and anyone below who has broken away. After the breakaway, the new group leader is paid a differential commission based on his entire group's volume.

Business builder

Business builders are individuals who combine vision, strategy, and systematic tactics to help a business grow through achieving sales and customer development goals. A business builder model relies on creativity, persuasion, and ethical implementation of business building techniques.

Cold prospects

The meaning of cold prospects is consumers who are well-qualified but are unaware of your company or products. Typical businesses reach such clients through standard marketing techniques like cold calling, advertising, and public relations; e.g., MLM businesses reach them through their distributors.


In MLM business, a commission is any remuneration paid to the distributor and her downline team on each sale made. The commission percentage paid to the distributor may vary from company to company as per the regulations.

Compensation plans

A compensation plan is simply the process by which different MLM companies pay for each sale made by their independent sales force or distributors. In an MLM business, the compensation plans vary from company to company. Primarily, there are three types of compensation plans, including Binary, Unilevel, and Matrix.

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