What is an MLM Program?

Home >>

A multi-level marketing program is a business strategy in which participants make money by bringing in new members and selling goods or services. MLM systems, usually referred to as network marketing, are based on a tiered structure in which higher-level individuals receive commissions from both their sales and their recruits.

How MLM Programs Work?

In the most basic sense, an MLM is a program where people enroll as independent distributors, and their principal aim is to sell products to the end consumer. They also recruit others into the MLM program, which is their “downline.” Participants earn commissions through their own sales, as well as percentage sales made by their recruits.

MLM Programs use different compensation structures, including:

Pros of MLM Programs

Cons of MLM Programs

Are you looking for MLM Software?

MLM vs. Pyramid Schemes

Legitimate multi-level marketing programs generate profits primarily from product sales, while pyramid schemes generate money through recruitment fees, which do not benefit its members and produce no real value for a product. MLM companies are, therefore, regulated by governments from all corners to prevent consumer deception.

Final Thoughts

MLMs can be legitimate sources of income; however, a selling and networking IQ is crucial. Interested third parties should heavily research the company to understand the compensation plan, ensuring it has a real focus on product sales instead of recruitment.