Multi-level marketing (MLM) is a business model that involves directly selling products to family and friends. Recruiting other people to do the same is where it gets its name, as participants are called “multi-level marketers” or “network marketers.”
This means that they are selling to customers and their networks of people interested in joining them. These businesses can make money from both sides of the deal, and it’s legal because there is no pyramid scheme involved.
There are some misconceptions about MLM that can make it seem like an illegal pyramid scheme or scam, but there’s nothing shady about it at all. These types of businesses are completely legitimate as long as they follow the rules set by the FTC (Federal Trade Commission).
This type of business structure has been around since at least 1949, when Amway was founded in Michigan by Jay Van Andel and Richard DeVos. It became more popular during the 1980s with companies like Avon, Mary Kay Cosmetics, Herbalife Nutrition, and The Pampered Chef.
Today there are thousands of MLMs worldwide, including household names such as:
- Tupperware Brands Corporation,
- Amway Global Inc., Herbalife Ltd.,
- Avon Products Inc.,
- Primerica Financial Services Inc.,
- Nu Skin Enterprises Incorporated,
- Melaleuca Inc.,
- Forever Living Products International LLC,
- Mannatech Incorporated, and
- Shaklee Corporation
These businesses can be successful because they have low startup costs compared to traditional brick-and-mortar businesses; however, they also require significant capital investment before any profits can be realized.
These companies have helped millions of women make money from home by sharing their beauty secrets with others in their community. Many people are attracted to this kind of work because they want to spend more time at home with their families while still making enough money for themselves and their loved ones.
Many multi-level marketing organizations operate from home offices, which helps cut down on overhead costs while maintaining their status as independent contractors for tax purposes even if they aren’t making money themselves.