Multi-level marketing (MLM) is a mode of distribution that companies adopt for getting their products to the consumers. Rather than offer the product directly to the consumers online or through a physical store, this model uses sales representatives to sell and distribute their products. The sales reps work remotely by buying an inventory and selling at online parties or to people in person. They are not employees of the organization. Instead, each of the sales reps owns their business.
Multi-level here refers to the ability of each representative to recruit other people and train them into becoming sales representatives and owning their business the same way. As the recruits make Sales and recruit other people to become representatives, everyone above them in the pyramid gets a commission.
The income obtained from multi-level marketing is from the gain obtained from each person’s sales and the commission or percentage earned from the sales of other representatives that an affiliate recruits.
