These independent distributors, or business owners, receive compensation for buying the parent company’s product or service, selling the product or service to others, and for expanding their network of people through MLM leads. The “downline” consists of distributors recruited by business owner, who receives commissions based on their sales and the sales of the distributors they subsequently recruit. The “upline” consists of distributors who are above the business owner in the MLM hierarchy and receive commissions based on his or her sales.

These commissions, also known as benefits or rewards, are tracked through a points system, where the points represent the total volume of products or services sold through the business owner’s network. If a business owner can recruit more independent distributors, he or she will receive more benefits or rewards.

Some examples of widely recognized multi-level marketing companies are Mary Kay, Avon, Pampered Chef, Tupperware, Amway, and Herbalife.