Multi-level marketing (MLM), (also called network marketing, direct selling, and referral marketing), is a term that describes a marketing structure used by some companies as part of their overall marketing strategy. The structure is designed to create a marketing and sales force by compensating promoters of company products not only for sales they personally generate, but also for the sales of other promoters they introduce to the company, creating a downline of distributors and a hierarchy of multiple levels of compensation.
Risk and unsure starts
They go on to question the relevance of product placement plus the level of compensation in, as they term it, their multi-level compensation business which does not determine whether or not their plan is considered a janitor / pyramid scheme.
Future focus: noting the returns on small ownerships and their initial investments – industry sectors (print to digital and sourcing a more productive less risky approach)
The critical question for the FTC is whether the revenues that primarily support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture
Scheibeler, a high level “Emerald” Amway member: “UK Justice Norris found in 2008 that out of an IBO [Independent Business Owners] population of 33,000, ‘only about 90 made sufficient incomes to cover the costs of actively building their business.’ That’s a 99.7 percent loss rate for investors.”
Newsweek: based on Mona Vie’s own 2007 income disclosure statement “fewer than 1 percent qualified for commissions and of those, only 10 percent made more than $100 a week.”
Relevant / irrelevant
From spread-bets to penny stocks, and college to graduate employment or incentive schemes;
Business Students Focus on Ethics: “In the USA, the average annual income from MLM for 90% MLM members is no more than US $5,000, which is far from being a sufficient means of making a living (San Lian Le Weekly 1998)”