The new distributor is encouraged not only to sell the product, but to sign up other people below them so that they can make even more money. The company is structured so that the people above (the person who recruited or signed up the new distributor, the people above them, ad infinitum) get a percentage of whatever the distributor sells. These can be physical products or services. The idea behind MLMs is that people pay to become distributors of a product.
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