What is Multi Level Marketing (MLM)?

Multi-level marketing, also known as network marketing, is a form of direct sales in which individuals, known as distributors, sell products, usually over the telephone or go door to door. Distributors recruit other distributors who do the same.
Each distributor makes money on the products that their recruits sell in addition to the money they make from their own sales. The idea is that eventually the original distributor can just sit back and let the distributors he recruited make money for him.
For a fee, usually between $25 and $100, these MLM companies will sell people a distributor kit that includes informational brochures about the product they will be selling, price lists, order forms and an instructional manual.

Basics of MLM
When it started in the 1930s, MLM was a legitimate business practice that afforded a way for small businesses to get their products to consumers in rural areas that had no access to these products. The idea was much like that of the traveling salesman. At the time, the products sold themselves and the percentage that went to the owner(s) was regarded as an award to those who built the organization. The focus remained on the product.

MLM today
Today, with the advent of technology giving us the ability to travel far distances, there is no need for these "distribution systems." Therefore, the focus has shifted from the product to recruiting new people to buy into the program or to sell low-quality products for high-quality prices (for example, selling a face cream that costs $4 for $25).
The idea is that Distributor ‘A’ will recruit people who will pay to become distributors, and then Distributor ‘A’ will get a portion of the money paid for the distribution kits and the overpriced products sold by these new distributors.
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