What is Multi-level Marketing? (Defination)

multi-level marketing
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Multi-level marketing or Network Marketing is a commission basis referring to business. 

In other words, When you sell a Company’s Products, You will make an amount of Commission from the Company.  

Network Marketing is the fastest growing business of the 21st Century which Must Be joined by every Man and Woman globally, Otherwise, you can never get the best of your youth Age. – Dr. APJ Abdul Kalam

A vitamin company in California, Nutrilite, first started this business in the 1930s.

So, Let’s get started…

1. What is Multi-Level Marketing?

Multi-Level Marketing or Network Marketing is one type of business that depends on referring sales commission. This is a distribution model companies use to get their products to consumers. 

May Network Marketing or MLM business requires you to build a Strong Team that will your Assets.

The company’s Associate usually works from home and buys products to sell at a private or online consumer. They are not considered employees. 

Instead, each sales representative owns their business.

 The multi-level aspect refers to the ability of each delegate to recruit and train other delegates to start their own business. As Associates sell and hire their own representatives, each person on top of them earns a commission.

2. How Multi-Level Marketing (MLM) Works?

In-Network Marketing, You will be hired by someone who is already in the Network Marketing Business.

Once you show interest after listening to the invitation by your friend, you can attend a seminar or webinar to learn more about the business. Then, You will be asked to sign a contract and purchase the list of some Products. 

Once these joining steps are completed, you will be the IBA or associate partner of this company and will start your new Business journey.

To understand how MLM or Network Marketing work, it helps to get acquainted with the Bussiness Word:

1. Planning: This includes the overall program, including the company’s marketing and compensation plan.

2. Sponsor: This refers to the representative who directly hires another person for the business. 

For example, MLM Partner, Associate member A in business B. Member A is responsible for sponsorship and Member B is responsible for training.

3. Recruitment: Also mentioned as a member of the team, it is a sponsor brought into the business as a new member. Employers are trained by their sponsors or more experienced representatives.

4. Downline: When you join some People under you, as Business Partner and they will be Junior. In-Network Marketing Business, they will be your Downline.

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5. Upline: When you joined by someone. And your position is down from them. It’s mean, Who Joined you, he is senior. In-Network Marketing Business, they will your Upline.

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6. Compensation Plan: It outlines all the ways to make money. In addition to the sales commissions created by you and your team, many companies offer bonuses and increase the commission split based on sales volume.

3. Is Multi-Level Marketing (MLM) Worth It?

Whether an MLM or Network Marketing is right for you depends on whether you have the money to invest, your passion for selling the product, and whether the specific MLM you are considering is legitimate. 

Nowadays, many people sell Products through Facebook ads without using the Traditional offline selling method. Many People know the traditional method of selling products, but This is the Digital Era.

You have to know, How to Sell Products Online. Most People do not know the Online method, and they will out of the market and quiet this industry saying, it is bad work, and there is no success.

That is why, you have to decide, Is it okay for you?

By the way, You have heard that MLMs are referred to as pyramid schemes, which are invalid.

 These are 3 things are required for MLM to be legal:

  • A quality product or service
  • Make Money by selling Goods or Sevices.
  • Company Focus on Product Sales, not a recruitment

In order to be legal and not be a scam, you need to make money from selling products and services instead of hiring new members. 

One Network Marketing Company has a low-quality product or focusing on getting paid per recruitment can be an illegal pyramid scheme, Definitely.

4. Is Network Marketing or MLM Illegal in India?

Network marketing is legal in India. There are also some multi-level marketing schemes that are illegal.

In addition to some businesses that invest in MLM schemes to trap innocent customers and traders do no direct trade in goods and services directly.

Rather there is only a promise that investors will earn a return. However, such promises are never implemented and cause huge losses to investors.

The government of India has noticed a few types of Network Marketing Scam company and its Strategies. Which company running their Business illegally in India. 

That’s why the Indian Government circulate the Direct Selling Guidelines in 2016 and make the Money Circulation Banning Scheme Act 1978.

These 3 types of Network Marketing Model is Illegal:

  • Money Circulation Schemes: The money-laundering scheme is defined under Section 2 (c) of the Price Cheats and Money Circulation Schemes (Prohibition) Act, 1978.
  • Pyramid Schemes: In Indian law, a pyramid scheme is defined as a scheme in which the organizers create a pyramid structure that begins with a person who presents the tip of the pyramid.
  • Ponzi Schemes: The Ponzi scheme is a fraudulent investment plan and is a form of MLM fraud that promises high expectations to its investors. Old investors are given returns by employing new investors cash flows.

In India, There are 400+ Active Direct selling or Network Marketing companies available.

These are the;

5. 4 Types of Best Network Marketing Plan

So, If you are planning to enter the Multi-Level Marketing industry or Direct Selling Industry as an Associate Partner, you should know the complete details of the Company Marketing Plan Model.

These are the top 4 MLM compensation plans for you. These will help you choose the best company to be a direct marketer and earn more money with the same level of effort.

1. Binary Plan: A binary plan is also very simple but the best MLM compensation plan. The binary MLM plan actually gives you the opportunity to benefit from the people listed by your employer. When you recruit 3 People in 1:2 or 2:1 Ration on both sides, You will earn money from this model.

2. X- Up Plan/ Step-Up Plan/ Australian Plan: The X-Up Plan is also known as the Step-Up Plan or Straight Australian Plan. Because it was first used by the American MLM organization in the 1980s to enforce Australian law. This plan is similar to the binary plan above. Here, too, every person you register hires sales from each other, including those they hire.

3. Mono-Line or Linear Plan: This MLM Plan works in a single line or linear way. This means you will act as a standalone Networker to promote products and services to the public. In addition, if anyone shows interest, you will list them as MLM Marketers. The more people you hire, the more discounts you will get on the product from the Company.

4. Stair Step Breakaway Compensation Plan: The Stair Step Breakway model existed in the United States in the early 1900s. This is a plan where no one feels the burden of doing MLM business and so strives for higher sales and more profit. The best part of the stair-step is that it cannot be used for scams. Instead, it is the most useful plan for legitimate companies to sell products. It works on the simple principle of making extra effort to get more profit.

You have to choose and Identified with your Mind that which plan is best for you. What types of Plan, you can comfortably get earning weekly basis.

Keynote on Multi-level Marketing

  • Multi-level marketing is a form of direct sales where individual representatives sell products or services to the end producer of an organization.
  • Sales agents usually work from home and purchase products to sell to private or online Customers.
  • Getting started with an MLM is relatively easy. You sign a contract, buy the Company’s Products list, then start selling.
  • Whether an MLM is right for you depends on your money, your enthusiasm for the product, and whether the company is reputable like Smart Value.


Here, I shared the complete details on Multi-Level Marketing. Now, This depends on you.

Are you want to be joined in Multi-Level Marketing? 

or Not?

However, in the next few posts, I will share with you the benefits and advantages of Network Marketing.

Now, I’d like to know from you:

Do you know this Business before?

Or, You already do a Business?

Let me know in the comment RIGHT NOW.

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