Multi-level marketing (MLM), also known as network marketing or pyramid selling, is a marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling the companys products/services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system. MLM companies sell their products or services through person-to-person sales, and participants are encouraged to promote and sell the products to others, as well as recruit new participants to join the MLM.

The MLM business model depends on the failure of the majority of participants, as the revenue and profit of the MLM company come from the money injected by the participants themselves. MLMs have been a frequent subject of criticism and lawsuits, with legal claims against MLM companies including their similarity to traditional illegal pyramid schemes, price fixing of products or services, and collusion and racketeering in backroom deals where secret compensation packages are created between the MLM company and a few individual participants, to the detriment of others.

While MLMs are legal, the Federal Trade Commission (FTC) investigates MLM programs to ensure they dont operate as pyramid schemes, which are illegal. Most people who join legitimate MLMs make little or no money, and some of them lose money. MLM businesses operate in all 50 U.S. states, and some sources say that all MLM companies are essentially pyramid schemes, even if they are legal.