Definition of Multi Level Marketing (MLM)

system of retailing in which consumer products are sold by independent businessmen and women (distributors) usually in customers' homes. Distributors are also encouraged to build and manage a sales force by recruiting, motivating, supplying, and training others to sell the products or services. Distributors' compensation is then based on the sales of the entire sales force in addition to personal sales. What distinguishes multilevel marketing from illegal pyramiding is the possibility (however small) of making money at a single level, without sponsoring representatives at lower levels.