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. Here are some key points about MLM:

• MLM companies sell their products or services through person-to-person sales, and participants are referred to as independent “distributors,” “participants,” or “contractors”.
• MLM encourages existing members to promote and sell products to their network of family, friends, and acquaintances, and to recruit new distributors to join the company.
• The MLM business model depends on the failure of the majority of participants, who inject money from their own pockets, so that it can become the revenue and profit of the MLM company, of which the company shares only a small proportion with a few individuals at the top of the MLM participant pyramid.
• MLM companies are designed to make a profit for the owners/shareholders of the company and a few individual participants at the top levels of the MLM pyramid of participants.
• According to the U.S. Federal Trade Commission (FTC), some MLM companies already constitute illegal pyramid schemes even by the narrower existing legislation, exploiting members of the organization.
• Most people who join legitimate MLMs make little or no money, and some of them lose money.
• Legitimate MLMs pay participants based on their sales to retail customers, without having to recruit new distributors.
• Pyramid schemes are fraudulent schemes, disguised as an MLM strategy, where there is no real product that is sold, and participants attempt to make money solely by recruiting new participants into the program.

In summary, MLM is a marketing strategy where participants sell products or services to their network and recruit new distributors to join the company. The MLM business model depends on the failure of the majority of participants, and most people who join legitimate MLMs make little or no money. Pyramid schemes are fraudulent schemes that are disguised as MLM strategies.