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Distributor

A distributor is a member of a network marketing company. A distributor is not an employee of the business they are associated with, but an independent business owner who works with the MLM organization. In the USA, this means they are not paid “wages” according to the IRS (which would require a W-2 Tax Form) but are instead paid “nonemployee compensation” under a 1099 Tax Form. In this way, a distributor is not unlike an independent contractor.

A distributor is expected to build a downline “team” of other members. These members will usually also be distributors, and make downline “teams” of their own. All distributors are also expected to sell company output, whether that be goods or services.

Distributor payments are not hourly or based on a salary model, but instead receive payment based on sales — usually under a commission model, with occasional bonuses and incentive payments. Distributors may also receive a percentage of money from sales closed by their downline team. This corporate structure does not come easily, though, and requires constant cooperation, and a great deal of training and support.

A distributor must enroll with a MLM business, and pay a start-up fee in order to receive a starter kit that will help them begin selling and recruiting.

See: Representative

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