Network marketing (also called Multi Level Marketting) is a term that describes a marketing structure used by some companies as part of their overall marketing strategy. The structure is designed to create a marketing and sales force by compensating promoters of company products not only for sales they personally generate, but also for the sales of other promoters they introduce to the company, creating a downline of distributors and a hierarchy of multiple levels of compensation in the form of a pyramid.

 

The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing.