MLM stands for Multilevel Marketing. It is also known as Network Marketing , Referral Marketing, Word-Of Mouth Marketing and is a form of Direct Sales. It is a business model where products are moved from the company through a Network of Independent distributors to the end consumer. It started in 1945 with a company called California Vitamin company, later known as Nutrilite.
In MLM you are compensated for selling the product and also for building a sales team on which you get overrides. When a person asks “What is MLM” several companies come to mind. One of the oldest and most established companies is Amway which went though intense scrutiny in the late 70’s by the FTC.
In re Amway Corp. (93 F.T.C. 618; full name In the Matter of Amway Corporation, Inc., et al.) is a 1979 ruling by the United States Federal Trade Commission concerning the business practices of Amway, a multi-level marketing (MLM) company. The FTC ruled that Amway was not an illegal pyramid scheme, but ordered Amway to cease price fixing and cease misrepresenting the apparent success achieved by the average distributor.
Some older and more established MLM companies you may be familar with include Amway, Avon, Herbalife, Mary Kay, Melaleuca, Primerica, Shaklee, and Tupperware. Some newer companies include Send Out Cards and Visalus.
What is MLM? – It’s Not a Pyramid Scheme!