Facts about network marketing industry - -level marketing, abbreviated as mlm, also called pyramid selling, network marketing, and referral marketing, is a controversial marketing strategy for the sale of products and/or services where the revenue of the mlm company is derived from a non-salaried workforce (also called participants, and variously known as "salespeople", "distributors", "consultants", "promoters", "independent business owners", etc) selling the company's products/services, while the earnings of the participants is derived from a pyramid-shaped commission system. Of the encouraging of recruits to further recruit their competitors, some people have even gone so far as to say at best modern mlms are nothing more than legalized pyramid schemes with one stating "multi-level marketing companies have become an accepted and legally sanctioned form of pyramid scheme in the united states" while another states "multi-level marketing, a form of pyramid scheme, is not necessarily fraudulent. . mlm) companies from the proposed business opportunity rule, thus leaving mlm participants without the ability to make an informed choice of entring or not entering mlms based on the disclosed likelihood of success and profitability:The revised proposal, however, would not reach multi-level marketing companies or certain companies that may have been swept inadvertently into scope of the april 2006 proposal. Salespeople are, therefore, expected to sell products directly to end-user retail consumers by means of relationship referrals and word of mouth marketing, but most importantly they are incentivized to recruit others to join the company as fellow salespeople so that these can become their down line distributors.