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MLM or multi-level marketing is a form of direct selling in which independent members sell products and services of a company to the end consumers. It is one of the highest payout network marketing in India. It is a distribution model business format that recruits sales representatives to sell or distribute products. 

Sales representatives work from home. They purchase inventory from the company and sell it personally to the consumers or online clients. Sales representatives are known as individual business owners rather than employees of the company. Moreover, every representative also has the liberty to hire and train other members. 

It gives them the confidence to start their business. As and when the new member makes sales, every person above him in the hierarchy earns a commission. As far as the income is concerned, it is made from the commission earned and the percentage of sales done by your recruits.

How do Legal MLM works?

If you wish to start with an MLM business, you need to be first recruited by a person who is already in this industry. You can attend meetings and conferences to understand more about the business. Here are certain industry jargons that are frequently used:

  • The Plan – It is the company’s compensation and marketing plan

  • Sponsor – The sponsor is a representative who recruits another member of the business.

  • Recruit – A new member added by the sponsor

  • Up line – It consists of the sponsors who joined the business before you

  • Down line – It consists of the recruits that joined the business after you

  • Compensation Plan – It comprises of all the methods in which representatives can earn money

Is Multi-Level Marketing Legal in India?

Yes, network marketing is a legal business in India. All the MLM schemes are legal in India, except for the one that dupes innocent customers. Such businesses recruit members but do not have any physical products to sell or distribute. 

As far as the payment is concerned, legal MLM business pays a commission of every sale and recruit. On the other hand, in an illegal business format, members get commissions for roping in new investors and agents.

So this was all about the legality of MLM business in India. Make sure you connect with a reputed MLM company if you aim to make a place in the list of the best chain marketing business in India. MLM is a business format that works on pure business principles and has a clear payment system.

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