A Review of the Multilevel Marketing Phenomenon

A recent and rapidly growing phenomenon is Multilevel Marketing. These organizations also often call themselves direct marketers (direct selling organizations) or network marketers. The major difference between Direct Marketing, true DSOs (what we define as network marketing), and MLMs is that in network marketing, the product is predominant and sales of the product is emphasized whereas in the case of MLMs, the product often is irrelevant or secondary and the emphasis is not placed on selling product but on recruiting other salespeople to in turn recruit still others. A DSO turns into a MLM when the emphasis switches from selling product to recruiting other salespeople. The academic world has yet to examine the MLM phenomenon in detail. This paper examines the Multilevel Marketing phenomena, its past and present, and provides scenarios for its future.