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Multilevel marketing is a powerful distribution system for specialized products that need to reach consumers and small businesses. There is nothing like person-to-person contact to motivate behavior. We learned that at our mother's knee...and in nonprofit activism and fundraising. Now that power is applied to the business world through commercial MLM marketing strategies.

Shaklee

Amazon Herb Company

Melaleuca

There will be more businesses entering the sustainable and natural health field. The way to separate the schemes from legitimate businesses is based on both strategic and legal processes. According to the U.S. Federal Trade Commission, legitimate MLM companies pay participants based on the volume of products individual distributors sell directly and through their network of sub-distributors. Illegal pyramid schemes compensate distributors merely for recruiting others into the company’s fold, and also tend to charge new recruits high fees just to join.

Not all direct marketing methods make money for the distributors. Saturation in a local area greatly affects receptivity and the number of prospects available as the web of distributors tend to have a lot of overlap.

According to Robert FitzPatrick, editor of the Pyramid Scheme Alert newsletter, the majority of MLM recruits lose money. FitzPatrick’s research shows that industry-wide, fewer than one in a thousand MLM distributors make any profit whatsoever, with most losing money while gaining closets full of products they had to buy but don’t need.

And that's not sustainable business or quality of life!