Accumulated Group Volume (AGV)
A Representative's group volume from the day he or she becomes a Representative
to present. This value does not clear or reset each commission period;
it continues to grow.
Accumulated Personal Volume (APV)
A Representative's personal volume from the day he or she becomes a
Representative to present. This value does not clear or reset each commission
period; it continues to grow.
Active
Only Active Representatives may have earnings. A Representative
is considered Active when they have a predefined minimum amount
of Personal Volume and/or a predefined minimum amount of Group Volume within
a set predefined period of time. Some plans impose other requirements as
well.
Back End
A term used to describe the portion of a Step-Level / Breakaway plan
which pays commissions to breakaway Representatives. (Also see Front
End)
Bonus Volume (BV)
The Qualifying Volume from the sales order that will be the volume
credited for a sale. It is added to the Personal Volume (PV) of the purchasing
Representative, his Group Volume, and the Group Volume of any upline Representatives
according to the plan. This volume may optionally be different than the
volume on which the commissions are paid (See Commissionable Volume).
Breakage
Many Representatives are either unqualified or ineligible to receive
some or all types of commission each month. When the company retains unpaid
commissions, it is called Breakage. Breakage also happens
when an order is placed by a Representative who is close to the top of
the genealogy such as a Representative sponsored directly by the company
or an orphan. In these cases, some or all of the commissions that
would normally be paid to an upline are retained by the company
because there are few, if any, Representatives in the purchasers upline.
Please note that commissions are always paid upline. When
the upline is small or nonexistent, the company retains the unpaid commissions,
causing Breakage.
Breakaway
When Representatives are promoted to a certain title, they "break away"
from their sponsors and are thereafter called "breakaway" Representatives.
Their group volume is no longer included in their sponsor's group volume.
Breakaways are entitled to additional compensation, which is usually referred
to as a Generation Override. Breakaway positions are usually considered
sales leaders.
Commissionable Volume (CV)
The pre-assigned value of each product purchased, and on which commissions
are paid. It is in the currency of the country in which the order was placed
(though the eventual commission check may be issued in yet a different
currency). Sales aids usually have no Commissionable Value. Commissionable
products have a Commissionable Value, which does not have to equal
the price paid for the product.
Commissions
An amount paid to a Representative on his or her direct and downline
Commissionable Volume. It usually comprises Commissionable Volume within
his own Group. Some plans call all forms of payment to Representatives
a "commission".
Compression
See Roll-Up. Also used to describe the impact on a genealogy
when a Representative is terminated. In this case, the downline of the
terminated Representative is linked to the sponsor of the terminated Representative
causing a "compression" effect on the downline.
Distributor
A person or entity in the genealogy with a class of "D" (Representative)
is a Representative. Anyone who gets credit for a purchase or can receive
commissions must be in the genealogy. All Representatives must sign a Representative
Agreement to avoid being considered employees of the corporation. Some
companies allow two or more people to join together as a single Representative
entity. Often called a Representativeship
or Independent Representative.
Downline
The Representatives personally sponsored by a Representative, as well
as all the Representatives they sponsor, etc. Example: You sponsor Jim,
who sponsors Mary, who sponsors Ted. All these Representatives are in your
downline.
Enrolling Sponsor
A Representative who recruits another (new) Representative or customer
into the business is a Sponsor. This person may be different from the Sponsor
assigned to the new recruit in some compensation plans such as Matrix or
Binary. It may also be different if the Enrolling Sponsor of a Representative
is terminated. In this case, the Representative is placed under the sponsor
of the terminated Representative. (Also see Sponsor, Compression)
Exemptions
Representatives may be permanently or temporarily exempted from meeting
certain requirements for qualification. These should be clearly defined
but not published. Representatives should not expect to be exempted when
they fail to meet their qualifications even when they have an 'excuse'.
Reality requires this capability, however, to deal with corporate mistakes
and other exceptions.
Front End
A term used to describe the portion of a Step-Level / Breakaway plan
which pays commissions to non-breakaway Representatives. (Also see Back
End)
Genealogy
The downline sales organization of a company or Representative often
called simply a Downline.
Generation
The relationship between an upline breakaway and a downline breakaway,
not including non-breakaways The first breakaway in any leg is called a
first generation breakaway. Generations are counted based on this period's
fully qualified title.
Generation Override
The commissions paid to upline Generations based on Group Volume. This
is only paid to Breakaways.
Group
A Representatives entire downline, but not including any breakaway
Representatives or their groups.
Group Count
The count of Representatives in a group not including one's self. Also
called Group Size.
Group Volume (GV)
The total of all Personal Volume (PV) sold by a group for a commission
period. This includes one's own Personal Volume (PV).
Inactive
Each commission period (month?) that a Representative is not Active,
he is considered Inactive.
Leg
Each personally sponsored Representative and all his or her downline.
Also referred to as Line of Sponsorship. If a Representative recruits
five other Representatives and places them on his first level, each recruit
comprises a Leg of the sponsor. Leg is also used to signify
a single chain of Representatives where "A" sponsors "B" who sponsors "C"
who sponsors "D", etc. Together, they are often referred to as a Leg.
Level
The position a Representative has in a downline relative to an upline
Representative. Representatives personally sponsored are level one
to the sponsor. Those Representatives sponsored by a level one Representative
are level two, relative to the original Representative. (Also see
Qualified Level)
Level Override
The commissions paid upline Representatives based on relative position
in the genealogy. Note this is only paid to qualified levels. This type
of commission is usually paid only in Uni-level compensation plans, not
Step Level / Breakaway plans.
Orphan
When a new Representative joins a company, a Representative application
form is completed and sent to the company. On the application, the new
Representative's sponsor name and account number is noted so the company
can link the new Representative to his sponsor. Occasionally, the sponsoring
Representative noted on the application is either incorrect or nonexistent
making it impossible to correctly link a new Representative to an existing
sponsor. In such cases, the new Representative is called an orphan.
Procedurally, most companies have a Representative in their genealogy called
"Orphan Account" to which all orphans are temporarily linked until their
correct sponsor can be resolved. Commissions normally paid on the purchases
made by orphans are usually kept by the company (called breakage)
because orphans have no upline. Resolving orphan-sponsor linkages quickly
is a high priority with most companies to avoid problems caused by not
paying commissions to the correct upline.
Paid-as Title
The title a Representative is qualified for in each commission period.
This title is not necessarily the Representative's permanent "official"
title. The Paid-As Title may change with each commission run but the Title
does not. The Paid-As Title will never be greater than the permanent Title.
Personal Volume (PV)
The value of commissionable products purchased in a commission period
is called Personal Volume or PV. It is based on the sum of each purchased
product's Qualifying Volume. It is credited to one and only one
purchasing Representative in a commission period. It represents the total
value of commissionable product purchased. It is usually included in the
Representative's Group Volume. When retail customers buy directly from
the company, the Qualifying Volume of their order is usually included
in the Personal Volume (and Group Volume) of their sponsoring Representative.
Qualifying Volume
The value of a commissionable product applied toward Representative
qualifications in the compensation plan. This value is added to both Personal
Volume (PV) and Group Volume (GV) when purchased. It is different than
Commissionable Volume. Commissionable products have a Qualifying Volume,
which does not have to equal the price paid for the product. (Also see
Commissionable Volume)
Qualified
In most plans, a Representative is "qualified" if they can receive
Generation Overrides.
Qualified Level
Some Uni-level plans pay commissions based on Levels instead
of rank or title based on Qualified Levels. In these plans, a Qualified
Level is represented by each qualified Representative in a single
Leg or in a single chain of Representatives. Inactive Representatives
are not counted as Qualified Levels in these plans. (See also Roll-Up)
Recruit
A Representative recruited by another Representative to participate
in the compensation plan or business opportunity.
Retail Volume
The total retail value of commissionable products is called Retail
Volume. Retail Volume is seldom used by compensation plans; most plans
rely on wholesale values to determine Qualifying and Commissionable Volumes
used in their compensation plan.
Roll-up
If a commission payment cannot be paid to a Representative due to that
Representative's being inactive, unqualified or not eligible in a given
period, the payment will "roll up" to the next qualified, active and eligible
Representative upline. In most plans, the volume does not roll up
with the payment which would result in increasing the Group Volume of upline
Representatives based on the poor performance of their downline the practice
of volume roll-up is not recommended while the practice of commission or
override roll-up is recommended.
Sponsor
The Representative immediately upline of a Representative. It is usually
the person who originally recruited the Representative but may be different
if the Sponsor has inherited one or more people through Compression
due to the termination of previously sponsored Representatives. It may
also be different in plans that automatically place new recruits in certain
spots or positions based on plan rules such as in Matrix or Binary plans.
In these plans it is common for the sponsor to be different from the original
Enrolling Sponsor. (Also see Enrolling Sponsor)
Stacking
A usually undesirable technique used by Representatives to manipulate
the compensation plan. Stacking occurs when a Representative recruits other
Representatives placing them in a single Downline Leg or chain instead
of directly under the recruiting Representative.
Unencumbered Group Volume (UGV)
To avoid the Group Volume of one Representative inadvertently promoting
his sponsor (and his sponsor, etc., which is often called Stacking),
some plans require Group Volume used for advancement to Breakaway position
to be derived from sources other than new breakaway Representatives.
These other sources are most often other legs within the Group, which are
not being advanced to Breakaway positions. The Group Volume derived from
these other sources is considered Unencumbered Volume. This distinguishes
it from the Group Volume used by a downline Representative that breaks
away (encumbered volume).
Some plans allow a portion of the Group Volume of a Representative achieving Breakaway status to be included in the Unencumbered Group Volume of his sponsor. For example, a plan might allow the excess or unused Group Volume of a downline Representative who is achieving Breakaway to be included in his sponsor's Unencumbered Group Volume.
The purpose of Unencumbered Group Volume is to avoid Representatives manipulating the intent of the compensation plan by funneling all their volume into one downline Representative which causes an entire leg to be advanced to Breakaway status. (Also see Stacking)
Upline
A Representative's sponsor, along with his or her sponsor, etc. All
Representatives in the genealogy above a Representative are referred to
as his upline. For example, if A sponsors B who sponsors C who sponsors
D, then the upline of D consists of A, B, and C.