multi-level marketing

n. MLM, businesses that operates by recruiting salespeople as independent contractors to sell a product or service and compensate them on the basis of their sales of product or service and on the sales achieved by the persons recruited into their downline

Multi-level marketing (MLM, now sometimes called network marketing) is a business model that combines direct marketing with franchising.Multi-level marketing businesses function by recruiting salespeople (also called Distributors, Independent Business Owners, IBOs, Franchise Owners, Sales Consultants, Beauty Consultants, Consultants, etc.) to sell a product and offer additional sales commissions based on the sales of people recruited into their downline, an organization of people that includes direct recruits, recruits' recruits, etc. 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, but in some MLM programs, there can be seven or more levels of people receiving royalties from one person's sales.
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a system in which a person receives a commission not just on sales they bring in, but also on sales by people they persuade to join in on the selling (see pyramid scheme).

a system in which a person receives a commission not just on sales they bring in, but also on sales by people they persuade to join in on the selling (see pyramid scheme).