Quick Definition

Multilevel marketing (MLM) is a strategy some direct sales companies use to encourage existing distributors to recruit new distributors by paying the existing distributors a percentage of their recruits' sales.

Examples

• 1A person joins a company selling health supplements and earns a commission not only on their direct sales but also on the sales made by people they recruit.
• 2A cosmetic brand uses MLM by allowing distributors to host parties where they sell products and recruit new sellers, who in turn do the same.
• 3An individual becomes part of an MLM scheme selling kitchen tools and earns bonuses for achieving certain sales targets and for the sales made by their recruited network.

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