What exactly is multi-level marketing? There is always so much debate on the topic; however it is important to fully understand exactly what it is. Firstly it needs to be stated that multi-level marketing is a specific kind of marketing strategy. This marketing strategy relies on the sales people recruiting their own additional sales people. Therefore the sales force makes money both by selling and by recruiting.
The sales people which the sales force recruit are called their “down line”. These people who are recruited below them are then told to also go out and recruit people. This eventually leads to multiple levels of compensation. Other terms which may be used are: pyramid selling and referral marketing.