Managing Multilevel Marketing as a Legitimate Organizational Practice

The rapid growth of Multilevel Marketing (MLM), or network marketing industry, in the last decade has made itself an attention-gathering star in the retailing industry. Hoping to reap the merits and benefits of this unique marketing method, more and more companies who marketed their products and services through traditional market channels previously are now testing the possibility of employing the direct selling formula. Nevertheless, influenced by numerous factors, not every product or service has the equal chance for realizing its market potential in the area of direct selling. The paradigm of this study raises the question of how a business, in which almost none of its sales representatives earn a profit and almost none has a sustainable retail customer base, could be called direct selling company. Indeed, how such an enterprise could be considered a legitimate business at all?