Multilevel marketing, or MLM, is a structure that is in place for promoting and selling goods or services with the help of a net of distributors.
Multilevel marketing programs function with a special emphasis on recruitment. Individuals become a distributor, via another distributor or occasionally through a publicized meeting. One of the attractive features of MLM network marketing is if an individual becomes a distributor with an a MLM company, he or she will net money through the sales of products and by enrolling other distributors. They will pocket a part of the income generated by the distributors.
The distributors enlisted by an individual are called “the downline,” while the distributor that initially recruited the particular individual is called “the upline”. Often the distributors render assistance and training to an individual while initiating them into the network.
Multilevel or “network” marketing strategies are aimed at selling legitimate goods or services through distributors. However, a disturbing trend has emerged known as illegal pyramid schemes. In pyramids, commissions are centered on the number of distributors recruited. Most of the product sales are available to these distributors and not to consumers in general. The core goods and services range from medicines to sophisticated gadgets. Joining a pyramid is risky because the vast majority of participants lose money to pay for the rewards of a fortunate few. Most people have little to cheer about except the costly products or marketing materials they purchased.