The concept behind Multi-Level Marketing is that of the sales "pyramid". Each participant has a place on that pyramid, and his or her job is to recruit others to their "downline". Those recruits will in due course, so the theory goes, recruit others to the tier below them, who will generate an income both for the participant's recruits and for the participant him or herself.
Typically MLM involves the selling of a product. However such is the marketing model that in actual fact it works equally well with or without a product to sell. The essence of MLM is that once a pyramid of successful marketers has been created the original participant will be able to sit back and watch the money flow in as those below him struggle to create portfolios of their own and to build their own vibrant downlines.
Where Multi-Level Marketing has worked it has been because those within a particular downline have been dynamic enough to fill out the spaces below with active, spending customers. Some people do make a considerable amount of money from MLM. The problem that arises however is that no matter how big the structure, there is always somebody who is going to be suffocating at the foot of it all, unable to find fresh recruits with which to create a new downline. With all the money in the system being provided by participants, for the person at the top to win somebody at the bottom needs to be out of pocket.
Those who are involved will tell you that there is a difference between Multi-Level Marketing and Pyramid Selling. In truth the only difference is that with MLM there is a token product being sold in order to justify the exchange of capital.
There are many MLM products and schemes on the market. Some require a buy-in on the part of the visitor. But all of them operate essentially the same way and for similar reasons.
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