MLM stands for “Multi-levelmarketing”. You may also hear it referred to as “network marketing”. Multi-level-marketing represents a unique approach to marketing products and services to consumers.
The core idea behind any MLM is that of using independent representatives to refer customers to the company. Any purchase made by the customer results in the payment of a commission to the referring representative.
In essence, the representative can create his or her own business without needing to create a product for sale. He can also grow and increase his business by recruiting new representatives into the business.
It’s important to note that real MLM's are NOT pyramid schemes!Many people confuse the two because of the 'recruitment and referral' aspects common between each. However, in a pyramid scheme, things are set up so that only the person at the top (the originator of the scheme) gets paid.
In an MLM, any and everyone who refers a customer gets paid! Let's go ahead and look deeper now at how MLM really works, and I think you'll see why multi-level structures can be fair and profitable for all.