Probably been posted before, but this is taken from Wiki. Now I know everything is not gospel on there but interesting to read the bit I have highlighted...
Perhaps Begga might read it & see sense, but I doubt it...
Multi-level marketing (
MLM), also called
network marketing [1] or
pyramid selling,
[2][3][4] is a controversial
[5] marketing strategy for the sale of products or services where the
revenue of the MLM company is derived from a non-salaried
workforce selling the company's products or services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation
commission system. An MLM strategy may be an illegal
pyramid scheme.
[6]
In multi-level marketing, the compensation plan theoretically pays out to participants only from two potential
revenue streams. The first is paid out from commissions of sales made by the participants directly to their own retail customers. The second is paid out from commissions based upon the wholesale purchases made by other distributors below the participant who have recruited those other participants into the MLM; in the organizational hierarchy of MLMs, these participants are referred to as one's
down line distributors.
[7]
MLM salespeople are, therefore, expected to sell products directly to end-user retail consumers by means of relationship referrals and
word of mouth marketing, but most importantly they are incentivized to recruit others to join the company's distribution chain as fellow salespeople so that these can become down line distributors.
[1][8] According to a report that studied the business models of 350 MLMs in the United States, published on the Federal Trade Commission's website, at least 99% of people who join MLM companies lose money.
[9][10] Nonetheless, MLMs function because downline participants are encouraged to hold onto the belief that they can achieve large returns, while the statistical improbability of this is de-emphasised. MLMs have been made illegal or otherwise strictly regulated in some jurisdictions as merely variations of the traditional pyramid scheme, including in
mainland China.
[11][12]