Commissions are earned in the process of selling a particular product or service in a legitimate network marketing. There can be no earnings in what they call as a “sign up fee” or for just recruiting yourself alone.
This kind of marketing is always criticized because of the questionable recruitment process where they get their revenue and profit. They get their sales from members and new members, which are considered the end users of the product and as the distributors.
These criticisms led to the major changes in the multi level marketing in the early 1980s when many companies have started to allow their members to concentrate only on marketing and not on distributing or stocking the product.
Most multi level marketing firms nowadays perform as fulfillment firms by taking the tasks of shipping the product, paying the commissions and taking orders from their clients.
Many people who are victims of the illegal schemes in multi level marketing are required to buy expensive products, but most of these schemes do not last long because most of the sales are not easily resold.