A multi-level marketing business is one in which products or services are sold by a non-salaried workforce using a

compensation plan based on seniority, which in practice means that someone brings you into the fold,

sets you up to sell the product or service this company provides, and that person who signed

you up gets a portion of your profits,

as does the company itself. You also generally pay some kind of franchisee fee or sign-up fee

or initial stock fee to get your first batch of products to sell and marketing materials

and things like that. And both the company and that person who signed you

up, divide that lump sum between themselves. The kicker is that you, now part of the company,

can do the same thing. You can sell those products and services to make some money, sure,

but you can also sign up other people, encouraging them to become independent salespeople like you.

And then you will earn a part of the profits that they bring in.

And a portion of that introductory fee that they will pay, sharing part of that with the company,

and importantly, the person who brought you in as well.

Each new person who is brought in in this

way is considered to be a downline distributor of the person who brought them into the fold,

and of the person who brought that person in, and the person who brought that person in,

and so on, all the way back to the original founders. So each person at each earlier step in the

hierarchy has the ability to increase their own income by bringing in new people who bring in new

people who bring in new people. And research has been done that shows the majority of these sorts of

schemes set things up in such a way that it's actually more profitable to focus

on bringing in new independent contractors than it is to sell the products or services that you

ostensibly sign on to sell. Multi-level marketing is also sometimes called relationship or network

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