A business that sells goods and services using a network of individuals, where each person is paid a commission based on their own sales and the sales of the people they recruit into the business. Also: multi-level marketing.
In multilevel marketing, all customers are potential distributors, and each level of distributor gets a cut of the earnings of the next level; the best-known example is Amway. Multilevel marketing networks, with sales in the tens of billions annually, are derided as pyramid schemes by critics, but the difference is that in an illegal pyramid scheme, money is earned by recruiting new members rather than by selling products.
—Eric Hubler, “Magnet magnate draws Broncos to his business,” The Denver Post, June 9, 1999
Offen readily agrees that the reality for most is much more modest than riches. “To say it’s easy to make a lot of money is a lie. Less than six-tenths of one per cent of all the people who go into multilevel marketing get to the $100,000-a-year income level.”
—Robert Johnson, “Want to be a millionaire?,” The Gazette (Montreal, Quebec), September 28, 1999
A crackdown on some chain referral distributor schemes was announced Monday by Atty. Gen. Robert. W. Warren.
The attorney general said many of the schemes may be in violation of state lottery and unfair business practice laws.
“Some multi-level marketing programs seem more concerned with the endless recruiting of distributors than with the actual sales of the product.” Warren said.
—“Crackdown on chain referral schemes ordered,” The Daily Tribune (Wisconsin Rapids, Wisconsin), August 19, 1969