Multilevel marketing, or MLM, is a business model that is a combination of direct marketing and franchising. The concept behind the model is simple: A company has a product that needs to be sold. Typical business operations will sell the product directly to consumers, or they will look for people who will sell it for them. MLM requires salespersons not only to sell the said product, but also to hire persons who will buy and sell the product, who will also, in turn, hire people who will purchase and sell the product for them, and the cycle goes on.
MLM businesses sometimes have a problem regarding corporate image because it if often hard to tell a legal MLM enterprise from the scams, although there are lots of legitimate MLM businesses operating in many states in the U.S. and in other countries. Neophyte firms may call their operations "home-based business franchising," or "affiliate marketing."
