Multi-level marketing is a marketing strategy

Marketing strategy

Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.-Developing a marketing strategy:...

 in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy

Hierarchy

A hierarchy is an arrangement of items in which the items are represented as being "above," "below," or "at the same level as" one another...

 of multiple levels of compensation. Other terms for MLM include
pyramid selling, network marketing, and referral marketing.

Most commonly, the salespeople are expected to sell products directly to consumers by means of relationship referrals and word of mouth

Word of mouth

Word of mouth, or viva voce, is the passing of information from person to person by oral communication. Storytelling is the oldest form of word-of-mouth communication where one person tells others of something, whether a real event or something made up. Oral tradition is cultural material and...

 marketing.