What Is A MLM?


If you're wondering "what is a mlm?" the simple answer is that mlm stands for multi-level marketing.

A more complete answer is that a mlm is a business opportunity that allows the average person to market products and then make a commission on the sales of those products.

Multi-level marketing also allows you to receive a commission when the people that you bring into the organization and support, make sales as well. 

This illustration shows one of the differences between a traditional job where every man for himself vs. mlm where helping others, helps you succeed.

"If you can dream it,
then you can achieve it.
You will get all you want in
life if you help enough other
people get what they want."

Zig Ziglar

Is MLM a Pyramid Scheme?

What is a mlm, isn't it just a pyramid scheme?

Although some people think that mlms are pyramid schemes most multi-level marketing opportunities are legitimate.

A pyramid scheme is just a group of people paying for the opportunity to recruit other people who then pay for the opportunity to recruit even more people . . . well you get the idea.


Pyramid schemes are actually illegal and would eventually be shut down by the government once their existence were widely known.

So the fact that several companies like Avon, Mary Kay and Amway have been around for decades helps substantiate the fact that multi-level marketing is a legitimate business model.

But It's Shaped Like a Pyramid!

Sure a mlm business might be shaped like a pyramid but so are most corporations.

Before I began working from home, I was a sales and marketing analyst for a global beverage distributor. I'll use a local sub-division of their corporate structure in the following example.

The highest position in this company is the CEO (Chief Executive Officer) followed by the CFO (Chief Financial Officer) and the COO (Chief Operating Officer).

Then there are the Presidents and Vice-Presidents of the different corporate divisions like Finance, Marketing, Operations, and Manufacturing.

Below them are department managers and supervisors followed by personnel like accountants, analysts and human resources staff.

And finally you have clerical support, sales reps and warehouse workers. In this illustration you'll notice that there is only room for one person at the top with more people on each level the closer you get to the bottom. However the income earned decreases the farther you are from the top.

What Is A MLM . . . Really?

A multi-level marketing opportunity is sort of a hybrid business. It's an opportunity for you to create your own business structure within an already established company structure.

A viable mlm has a product that customers would be willing to pay for and a compensation plan that would attract business opportunity seekers. 

When you join a multi-level marketing company you usually pay for some product so that you can use it yourself and be able to talk about your product experience with potential customers.

You then market the product and make a commission from sales of the product. You can also market the opportunity to other people and make a commission from their sales and also possible commission from the sales of the people that they also bring into the company.

The MLM Comparison

So . . . what is a mlm? Well, it's not a job. I believe that multi-level marketing gets a bad rap because people try to treat it as though it is one.

Here are a few of the differences between an employee with a traditional job and a rep working a mlm business.

Getting paid

An employee gets paid for coming to work and doing certain tasks while a rep's income is based on results.

This means that even if you put a lot of effort into selling products you won't get paid for that effort unless a sale is made.

One of the biggest reasons why most people want a job and not a home business is because they want the certainty that as long as they are working, they will receive a check.

Income Potential

An employee has a set salary that doesn't change until they get a raise or promotion. The opportunity to advance is sometimes possible but limited by the number of set positions available within the company.

A mlm company gives you the opportunity to make as much as you want as long as your efforts result in increased sales.

A rep could make nothing at all for several months but then learn to perfect their marketing methods and be making $1,000 or more two months later.

Work Environment

An employee must work a certain number of hours usually in a certain location with a limited amount of vacation time away from that work environment.

A rep could work from home or even while on vacation as long as they are disciplined enough to make work a priority.

The flexibility of working where you want, when you want and possibly making as much as you want is one of the main reasons that people join a multi-level marketing company.


There are definitely differences between working as an employee and working as a rep, which is why mlm is not for everyone.

But if you are willing to invest time and money for the opportunity of possibly earning a significant income then a multi-level marketing opportunity might be just what you're looking for.

How do you find the right mlm company for you?