network marketing

Definition

Direct selling method in which independent-agents serve as distributors of goods and services, and are encouraged to build and manage their own sales force by recruiting and training other independent agents. In this method, commission is earned on the agent's own sales revenue, as well as on the sales revenue of the sales-force recruited by the agent and his or her recruits (called downline). Also called multilevel marketing (MLM), cellular marketing, or by other such names, it is a multi-billion dollar worldwide industry that distributes practically any portable item, although restricted or banned in several countries due to its history as a vehicle for consumer fraud. Said to have been pioneered by the now-defunct California Vitamin Company in 1941, it is a method employed by large firms such Amway, Melaleuca, Nikken, and Shaklee-Nagamuchi.