Glossary
Plan structure
27 terms, explained plainly. Where a term has a legal meaning we say which law; where it has a company-specific meaning we say to check the plan.
B
- Binary plan
A plan with exactly two legs where pay is calculated on the weaker leg's volume.
- Breakaway
When a downline participant reaches a rank that removes their group from the sponsor's group volume.
C
- Compensation plan
The document that defines how participants are paid: commissions, bonuses, ranks and requirements.
- Compensation plan change
Any revision to a plan's rules, rates, ranks or requirements, usually announced with little notice.
- Compression
Skipping inactive participants so that active ones move up a level for commission purposes.
D
G
- Genealogy
The tree view of a participant's organisation showing who sponsored whom.
- Generation
A group headed by a participant of a given rank, used to pay leadership bonuses across breakaways.
H
- Holding tank
A temporary area where new recruits wait before the sponsor decides their placement.
- Hybrid plan
A plan combining elements of two or more types, for example unilevel pay with a binary team bonus.
L
- Leg
One branch of a downline, starting from a directly sponsored participant.
- Leg balancing
The need in binary plans to keep both legs' volume close, since pay follows the weaker leg.
- Level
A participant's depth in the tree relative to someone above them.
M
- Matrix plan
A plan with fixed width and depth, such as 3×7, where extra recruits spill over.
P
- Party plan
Selling through hosted gatherings, in homes or online, with a host reward.
- Placement
Deciding where in the tree a new recruit is positioned, which may differ from who sponsored them.
- Power leg
In a binary plan, the leg that receives spillover from the upline and grows without the participant's effort.
R
- Roll-up
Reassigning an inactive or terminated participant's downline to the next active upline.
S
- Single-level marketing
Direct selling that pays only on personal sales, with no downline overrides.
- Spillover
Recruits placed below a participant by someone above them, because of structure limits.
- Sponsor
The participant who recruits and is credited with a new participant.
- Stairstep breakaway plan
A plan where participants climb ranks by volume and high-rank groups break away from their upline.
U
- Unigen plan
A unilevel plan that switches to generational pay at leadership ranks.
- Unilevel plan
A plan with unlimited width where commissions are paid on a fixed number of levels.
- Upline
The chain of sponsors above a participant.
W
- Width
How many participants can be placed directly under one person.