In short, MLM can be defined as a business that engage in Multi-level Marketing. In this type of business, there are various levels of distributors. These distributors of the company represent the company to bring the company's products to the individuals of the public.
The distributors of the company are not paid a fixed pay. They are only paid a commission when they successfully make a sale. Commissions are awarded based on the volume of their personal sales volume and also based on their group volume. These distributors can be termed as independent business owners or franchise owners because they are not an employee of the company.
Many distributors build their business by increasing their base of customers to increase the sales volume or to increase his group size by recruiting members to join him as a downline and engage in the business with him so that he can get an overriding commission on the downlines' sales volume
Distributors earn commission from their personal sales effort as well as the leveraged effort of their downlines. Commission is paid to distributors based on the companies' compensation plan. There can be multiple levels of people receiving commission from one person's sale.
