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What is multi-level marketing (MLM)?

Multi-level marketing (MLM) is a method of selling products directly to consumers using independent sales representatives.

How does MLM work?

MLM encourages existing members to promote and sell their offerings to other individuals and bring new recruits into the business. Distributors are paid a percentage of their recruits’ sales. New recruits become the distributor’s network or downline and are, in turn, encouraged to make sales to earn money.

Is MLM a legitimate business?

Although MLM can be a legitimate and legal business strategy, controversy over fraudulent MLM models known as pyramid schemes has widely discredited MLM as a practice. A multi-level marketing business leverages individuals’ social connections to make sales. Some MLMs are legitimate businesses, but beware of pyramid schemes.

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