Multilevel marketing (MLM), also known as network marketing, is a home-based marketing system based on selling to friends and recruiting others to sell and distribute the company’s products. In the United States, multilevel marketing is a multibillion-dollar industry. MLM was started by Carl Rehnborg who, in 1941, created Nutrilite Products, Inc., to sell food supplements through networks of friends and distributors. Perhaps the most famous MLM company, Amway Corporation, founded by former Nutrilite distributors, became the most widely known multilevel marketer. Multilevel marketing is based primarily on recruiting others to also sell the PRODUCT. Its advantages include low COSTS for getting started (often $500 or less), a chance to make significant INCOME (many MLMs offer testimonials describing people who became millionaires), and a relatively simple BUSINESS PLAN. Few multilevel marketers actually become wealthy selling products. The key to success in MLM is having a large “downstream”—salespeople who are selling products and the MLM system to others. In multilevel marketing, a person is paid a percentage of the sales of downstream participants, which can rapidly increase one’s income. For example, if someone recruits five people who in turn also recruit five people, who then recruit five people, in most MLM systems the first person will receive a percentage of the sales of the 125 people downstream from him or her. There are many problems associated with MLM. Like the old maxim, “if it sounds too good to be true, it probably isn’t true,” some multilevel marketing systems involve products that can easily be purchased at lower prices in retail stores or SERVICES of questionable value. Often MLM programs are “get-rich-quick schemes” foisted on unsophisticated consumers looking for opportunities. Dubious MLM schemes tend to expand during RECESSIONs as people who lose their jobs look for alternative ways to make a livliving. Like most business organizations, people at the top of MLM systems make the most money, and people on the bottom often find it much more difficult than they imagined recruiting others to the system. Multilevel marketing grew rapidly following a 1979 ruling by the FEDERAL TRADE COMMISSION that it was a legitimate marketing technique. Some of the most successful MLM programs include Amway, Mary Kay, Avon, Tupperware, and NuSkin. The INTERNET has resulted in a new generation of multilevel marketing programs using electronic rather than direct sales to recruit participants.