Multi-level marketing (MLM), also called pyramid selling, [1][2][3][4] network marketing, [3][5][... more Multi-level marketing (MLM), also called pyramid selling, [1][2][3][4] network marketing, [3][5][6] and referral marketing, [7] is a controversial marketing strategy where an MLM company's revenue and profit is derived from a non-salaried workforce (called "salespeople", "distributors", "consultants", "promoters", "independent business owners", etc) selling the company's products/ services, while the earnings of this non-salaried workforce is derived from a pyramid-shaped commission system via two potential revenue streams which, although dictated according to each MLM company's specific "compensation plan", has two common features across all MLMs: firstly, from commissions on sales by participants directly to their own retail customers, and secondly, from commissions based on the sales by other distributors below them who they had recruited into the MLM (in the organizational hierarchy, known as their " down line " distributors). [8] MLM salespeople are, therefore, expected to sell products directly to end-user retail consumers by means of relationship referrals and word of mouth marketing. Most importantly, however, they are incentivized to recruit others to join the company as fellow salespeople so that these can become their down line distributors [5][9][10] .
Multi-level marketing (MLM), also called pyramid selling, [1][2][3][4] network marketing, [3][5][... more Multi-level marketing (MLM), also called pyramid selling, [1][2][3][4] network marketing, [3][5][6] and referral marketing, [7] is a controversial marketing strategy where an MLM company's revenue and profit is derived from a non-salaried workforce (called "salespeople", "distributors", "consultants", "promoters", "independent business owners", etc) selling the company's products/ services, while the earnings of this non-salaried workforce is derived from a pyramid-shaped commission system via two potential revenue streams which, although dictated according to each MLM company's specific "compensation plan", has two common features across all MLMs: firstly, from commissions on sales by participants directly to their own retail customers, and secondly, from commissions based on the sales by other distributors below them who they had recruited into the MLM (in the organizational hierarchy, known as their " down line " distributors). [8] MLM salespeople are, therefore, expected to sell products directly to end-user retail consumers by means of relationship referrals and word of mouth marketing. Most importantly, however, they are incentivized to recruit others to join the company as fellow salespeople so that these can become their down line distributors [5][9][10] .
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