Independent non-salaried participants, referred to as distributors (variously called "associates", "independent business owners", "independent agents", "affiliates", etc.),

are authorized to distribute the company's products or services. They are awarded their own immediate retail profit from customers plus commission from the company,

not downlines, through a multi-level marketing compensation plan, which is based upon the volume of products sold through their own sales efforts as well as that of their downline organization.

Independent distributors develop their organizations by either building an active consumer network, who buy direct from the company, or by recruiting a downline of

independent distributors who also build a consumer network base, thereby expanding the overall organization.

The combined number of recruits from these cycles are the sales force which is referred to as the salesperson's "downline". This "downline" is the pyramid in MLM's multiple-level structure of compensation.

The overwhelming majority of MLM participants participate at either an insignificant or nil net profit. A study of 27 MLM schemes found that on average, 99.6%

of participants lost money. Indeed, the largest proportion of participants must operate at a net loss (after expenses are deducted) so that the few individuals in the

uppermost level of the MLM pyramid can derive their significant earnings. Said earnings are then emphasized by the MLM company to all other participants to encourage their continued participation at a continuing financial loss.

Many MLM companies generate billions of dollars in annual revenue and hundreds of millions of dollars in annual profit. However, profits accrue to the detriment

of the majority of the company's constituent workforce (the MLM participants). Only some of the profits are then shared with individual participants at the top of the

MLM distributorship pyramid. The earnings of those top few participants are emphasized and championed at company seminars and conferences, thus creating the

illusion that participants in the MLM can become financially successful. This is then advertised by the MLM company to recruit more distributors in the MLM with an

unrealistic anticipation of earning margins which are in reality merely theoretical and statistically improbable.

Although an MLM company holds out those few top individual participants as evidence of how participation in the MLM could lead to success, the MLM business model

depends on the failure of the overwhelming majority of all other participants, through the injecting of money from their own pockets, so that it can become the revenue

and profit of the MLM company, of which the MLM company shares only a small proportion with a few individuals at the top of the MLM participant pyramid. Other than

the few at the top, participants provide nothing more than their own financial loss for the company's own profit and the profit of the top few individual participants.

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