Unfortunately, there have been businesses of this type that turned out to be nothing more than pyramid schemes whereby commissions would be paid to top tier representatives when new recruits were added to their downline, even if no product or service was being purchased. Companies such as ACN, Avon, Othilia Kay, AmWay and a host of others market their products/services through a network of independent representatives who have face-to-face contact with consumers. Word of mouth promotion has always been incredibly powerful and is more often than not the best way to move goods and services.

In MLM, as with any kind of sales or marketing, you must. A Legitimate Business Model For many years, network marketing opportunities have been proven to be a legitimate way for entrepreneurs to start their own business and earn profit.

In those cases, lower level distributors would spend money on their franchise fee yet not be able to recoup their investment due to an unreliable/low grade product or service, that they couldn't find customers for.

These MLMs were illegal and tarnished an otherwise honourable business model's reputation.