Multi-level Marketing (MLM) also referred to as direct marketing and network marketing can be a controversial marketing plan for the sale of products or services where the revenue of this MLM company comes from a non-salaried work-force (also called participants, also popularly called “salespeople”, “distributors”, “consultants”, “promoters”, “independent organization people” attempting to sell the company’s products/services, whereas the earnings of the participants will be derived by a pyramid-shaped commission program.

Although each MLM company dictates its own special “compensation plan” for the payout of any earnings to their various participants, the frequent feature that is found across all MLM is that the compensation plans theoretically payout to participants only from the two potential revenue streams. The flow of reimbursement can be paid out from commissions of earnings produced by the participants for their retail customers. The second flow of compensation can be performed of commissions on the basis of the earnings made by additional vendors under the participant who’d recruited the other participants in the MLM; in the organizational hierarchy of MLMs, those participants are referred to as one of “network” suppliers.

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