Industry & companies
Multi-level marketing (MLM)
A sales model where participants earn on their own sales and on sales made by people they recruit.
Also: MLM, network marketing, multilevel marketing
Multi-level marketing describes companies that sell through independent participants who are paid commissions on their own sales and overrides on the sales of participants they sponsor, through several levels. Network marketing is the same thing under a friendlier name.
Most direct selling companies today use some form of multi-level compensation. The model is legal when compensation depends on sales to customers; it becomes a pyramid scheme when it depends on recruitment. Where the line sits is the subject of most regulatory actions in the industry.
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