Abbreviation for Multi-Level Marketing
, a business model
in which marketers are paid commission
s on the sales of other marketers that they recruit, as well as on their own sales. To qualify as MLM, the business plan must actually focus upon selling a marketable product or service.
Business and marketing n00b
s frequently confuse MLM with pyramid scheme
s, a business model that focuses on paying bonus
es for recruiting people, rather than commissions on sales, because the criminals who start pyramid schemes like to scam n00bs and flatter themselves by calling their schemes MLM. They may even pretend to operate an MLM business by forcing marketers to stockpile unmarketable products to pretend they are selling it.
Anyone who calls a pyramid scheme MLM
helps the scammers trick their victims.