Downline

Downline is a term used in multi-level marketing (MLM) to refer to the individuals who are recruited into a business and whose sales or referrals generate income for those above in the program.

Overview

In MLM, the structure is designed in such a way that the first person to join the program, often referred to as the upline, recruits new individuals, known as their downline. The upline earns a commission every time the downline makes a sale or recruits another person into the program. This structure creates a hierarchy of multiple levels of compensation in the form of a pyramid, which is why MLM is also known as pyramid selling, network marketing, and referral marketing.

Structure

The downline members are placed under the direct sponsor in what is called a binary, matrix, or a unilevel structure. In a binary structure, each member has two downlines. In a matrix structure, the number of downlines is limited to a set number. In a unilevel structure, a member can have an unlimited number of downlines.

Compensation

The compensation plan in MLM is structured in such a way that a certain portion of the sales made by the downline members is given to the upline members. This is often referred to as a commission. The more members one has in their downline, the more commission they earn.

Criticism

MLM has been criticized for being a pyramid scheme, where the people at the top benefit from the work of the people below them. The downline members often make less money than the upline members, and in some cases, they may lose money.

See also

• Multi-level marketing
• Pyramid scheme
• Binary plan
• Matrix plan
• Unilevel plan
• Commission (remuneration)