Multi Level Marketing (MLM) is a business model or marketing strategy in which the distributors' income includes their own sales, and a percentage of the sales group they recruit, which is commonly known as their ‘downline’. Customers can also sign up as a distributor to sell the company’s product. Usually, the sign up fee will be the price paid to purchase the product.
In other words, MLM companies build and manage their sales force by recruiting and motivating independent distributors to go out and sell!.
MLM itself is a legitimate business strategy. However the subject of ethics can be rather vulnerable.
There are clear differences between the pyramid scheme and the MLM scheme. Because generating income in a pyramid scheme comes at the expense of another person, a win-win situation will never be possible. In MLM however, the sales of products can generate true revenue thus creating a sustainable ecosystem for both themselves and their downlines.
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