MLM is a business model in which a distributor network is needed to build the business. Usually such businesses we call them multilevel marketing.
MLM is a type of business opportunity that is very popular with people looking for part-time, flexible businesses.Most MLM programs also ask participants to recruit other sales representatives. The recruits constitute a rep's "downline," and their sales generate income for those above them in the program. Multi-level marketing (MLM) is a marketing strategy applied by the companies in which they make a contract with the customer for compensating them if they sell their products or services. Not only this if they are recruiting other person under him, then their sell will also results in paying commission to first customer.
Multi-level marketing is one of the direct selling scheme in which the customer sells the products to other customers and get money in return.In multi-level marketing usually a person is introduced to the business by attending a meeting or a conference in which he is introduced to a plan.
In other words multi-level marketing or network marketing is a direct selling method in which independent-agents serve as distributors of goods and services, and are encouraged to build and manage their own sales force by recruiting and training other independent agents.In this method, commission is earned on the agent’s own sales revenue, as well as on the sales revenue of the sales-force recruited by the agent and his or her recruits which is also known as downline.
Things can get sticky when a multilevel marketing compensates participants primarily for recruiting others rather than for selling the company's products or services. A multilevel marketing system in which most of the revenue comes from recruitment may be considered an illegal pyramid scheme.
Many multibillion dollar companies are into multi-level marketing such as Amway, Tupperware, etc.