According to the Wikipedia ...
http://en.wikipedia.org/wiki/Network_marketingMulti-level marketing (MLM), also known as Network Marketing
is a business distribution model that allows a parent multi-level
marketing company to market their products directly to consumers by
means of relationship referral and direct selling.
Independent unsalaried salespeople of multi-level marketing referred
to as distributors (associates, independent business owners, franchise
owners, sales consultants, consultants, independent agents, etc.),
represent the parent company and are rewarded a commission relative to
the volume of product sold through each of their independent businesses
(organizations). Independent distributors develop their organization by
either building an active customer base, who buy direct from the parent
company and / or by recruiting a downline of independent distributors
who also build a customer base, expanding the overall organization.
Additionally, distributors can also earn a profit by retailing products
which they purchased from the parent company at wholesale price.
Distributors earn a commission based on the sales efforts of their
organization, which includes their independent sale efforts as well as
the leveraged sales efforts of their downline. This arrangement is
similar to franchise
arrangements where royalties are paid from the sales of individual
franchise operations to the franchisor as well as to an area or region
manager. Commissions are paid to multi-level marketing distributors
according to the company’s compensation plan. There can be multiple
levels of people receiving royalties from one person's sales.
It is sometimes difficult to distinguish legal and reputable MLMs from illegal pyramid or Ponzi schemes.
MLM businesses operate in the United States in all 50 states and in
more than 100 other countries, and new businesses may use terms like
"affiliate marketing" or "home-based business franchising". However,
many pyramid schemes try to present themselves as legitimate MLM
businesses.
In the most legitimate MLM companies, commissions are earned only on
sales of the company's products or services. No money may be earned
from recruiting alone ("sign-up fees"), though money earned from the
sales of members recruited is one attraction of MLM arrangements. If
participants are paid primarily from money received from new recruits,
or if they are required to buy more product than they are likely to
sell, then the company may be a pyramid or Ponzi scheme, which is illegal in most countries.
Go to the Wiki link above to read ALL of this.
Please be sure to read all of the terms of ANY company you consider to join.
Kenneth R Sword Jr