The Definition In Multi-Level Marketing
In multi-level marketing, a downline refers to the people you have recruited after you joined a program and whose sales or own referrals generate income for you. A downline can thus provide multiple levels of compensation (hence the designation Multi-Level Marketing) depending on the compensation plan which differs according to each company. =)
Some use the term “affiliate marketing” although the latter is a little too broad (and incorrect) to apply the a “downline.” A downline goes down on several levels (in a pyramidal scheme) while affiliate marketing is up on only one level of remuneration, which means you can not earn income on your referrals’ referrals (and so on).
How Does A Downline Work?
Why do people build a downline? The independent partners of MLM companies (ItWorks, tupperware, avon and many many more) do not only sell products but also try to find and recruit other people who themselves sell products and recruit new people. The recruiting part is often called sponsoring.
Most of the time (if not always) it is the recruiting of more referrals that generates most of their income (in contrast to affiliate marketing that focuses on the product(s) and not on recruiting new sellers).
When someone (say Paul) becomes an independent distributor of a company, he is then someone’s sponsor (say Mary). Paul does not only receive commissions from his own direct product sales but also from the sales of Mary and every other person he has sponsored. This also extends to further levels : Paul also receives commissions for sales from Mary’s recruits, their recruits etc. Paul’s Downline then would include all persons who work as independent contractors/distributors for the same company and for who’s product sales he is entitled to receive commissions.
This will entice them to recruit more people.
The Implications In A Downline
What bothers me with the concept of a “downline” is that the principle quickly implies massive recruiting of people (without really being interested in them) rather than selling a quality product. I tried lots of MLM companies but always ended up dropping them because building a “downline” became sooner or later (sooner more than later actually) an “obsession”, without which no (or little) income was possible.
A downline means you gradually see people as a source of money and not as human beings in their own right. To put things as they are, you end up using people for your own benefit. I hated that and the people who succeed in MLM on the other end don’t give a crap about it.
Downlines or How to Lose Sight of your Customers
An Alternative To Building A Downline
Or should I say, an alternative to MLM? Yes!
If you have joined an MLM company and you don’t seem to be able to build your downline, just let go. Either the product is not good enough and you are not likely to make a living selling it. Or you will have to redouble your efforts to (constantly) recruit new people who will do the same as you.
Building downlines is a very stressful job, if you ask me. Especially if you are at the bottom of the “pyramid“. When you join an MLM business at its early stage, you ARE likely to attract many people very quickly with the new concept … but a company that has already been out there for several years leaves little room for the new members. The new affiliates will only serve to increase the income of the oldest. Whatever the products that are initially sold …