August 31

What Is A Downline ?




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).

Untitled Infographic

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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.

downline

 

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. 

recruit more

 

Downlines or How to Lose Sight of your Customers


Building a downline means you will hunt down all those who do not recruit enough to increase (or at least maintain) your income. This is why most MLMs collapse or why the people who are successful with MLM have joined and dropped many different companies after they made money with them. Sooner or later they are no longer able to recruit enough people. And as it often happens, the products sold are not that good anyway, so their main activity is in the recruitment and coaching of their team.
 
A lot of people think that because they are going to build a downline they will earn tons of money quickly and easily. But what they don’t tell you when you join an MLM company is that it is NOT easy to make referrals and you actually need a loooooot of referrals to earn a real full time income. Your sponsors will always encourage you to recruit more not out of the kindness of their heart, but simply because they need you to earn more money.




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 …

If you want to make a living online, legally, without stress and without having to harass strangers (or your family/friends) all the time, I recommend affiliate marketing. Here’s an article I wrote about Affiliate Marketing ! =)

 

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Thank you for dropping by! Feel free to leave a message in the comment area ; I will be more than happy to connect !! 
Cheers ! =)
Sarah
Earn Money Online

Earn Money Online




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10 Comments on "What Is A Downline ?"

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Tiffany
Guest

I love your definition and pictorial explanation of a downline. For MLM, a downline sometimes got really complicated for me, esp in terms of levels and payout percentages etc. But I also like how you capture the essence in that with downline compensation you risk becoming more focused on the money and the product and less focused on real relationship building. Its true. And its one of the reasons why MLM has a high turn over rate too.

Andrew
Guest

Hi, this is a really good article, thanks for informing us. I was already aware of what a down line was but I have never been involved in MLM so didn’t really know the full implications.

Am I right in thinking that you need to be constantly adding more people to the down-line and also encouraging them to do the same? I can imagine this being very difficult to achieve if you get a few lazy people on board!

I think I will stick to building a business around affiliate marketing as you suggest.

Thanks!

s a h
Guest

Hey there how are great site I’m glad I found this now because I am well interested when it comes to making money online from home. I have tried before but with no success, Thanks for the opportunity I found everything I was hoping to find. Now I find myself in a great position to go out and earn some real coin.

Thabo
Guest
How do you talk about a serious subject and still give hope to people? I ran into a web site that answers this question well. Here’s what I mean. Sarah spells out the concept and pitfalls of MLM marketing and then shows you how affiliating marketing is different. For example, she explains that the foundation of MLM marketing is a concept called downline. This she says is when “People you recruit after you joined a program and whose sales or referrals generate income for you”. What I really like about Sarah’s web site is that it gives you a window… Read more »
Chris
Guest

Always shudder when I come across the downline subject – so many scams and pyramids linked to it! I so t of like the way the sellers are compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. It’s just the success rate of building downlines is pretty poor among most people! What do you think?

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