The typical multi level marketing system has a pyramidal structure. Its members form a hierarchy and are financially rewarded in two ways:



-the sales they make;

-sales made by the people they brought.

The only problem is that multi level marketing is sometimes very controversial. This is because there are illegitimate companies which promise financial rewards for their members only for recruiting new ones.

This is also the reason one must very carefully analyze a multi level company's compensation plan before plunging in. If the main commissions are earned for signing up other people, this is illegal and this sort of organization is called an illegal pyramid or a Ponzi scheme.

The great breakthrough of MLM companies has produced in the early 80s, when companies made a sudden turn and started paying people for their sales. This was a good thing, because their members had nothing else on their mind except for selling. The companies would take care of depositing and delivering products, as well as calculating commissions. Much like it is the case today.

When the internet arrived, it was an even more important breakthrough for everything that MLM meant. Most of the network marketing companies decided to go online, and this is rightfully acknowledged as online MLM.

The immense network of interconnected people that the internet is forms a huge opportunity for all MLM companies. Recruiting new members is easier, also for the company itself as for the members also. Having a network of people as large as possible also means more and more money for the respective company, as well as for their sellers.

But as more and more legit MLM companies have decided to go online, so id the illegal ones. The truth is that sometimes the internet can be a very good media for frauds to develop. The only advice I can give you is, when you decide to get into an MLM business, just check their commission policy. If you get money just for recruiting new members, this is illegal and you don't want to be involved in that.

As controversial as it may be, network marketing has made many people achieve their financial freedom much more easily than standard ways. And this has been done not through illegal ponzi schemes, but with the help of the networking system that connects so many people. In the end, this is what MLM is all about.