Product-based MLM, also known as network marketing or multi-level marketing (MLM), is a business model where individuals earn money not only by selling products but also by recruiting others into the company and earning commissions from their sales. In product-based MLM, the primary focus is on the sale of tangible goods, such as health supplements, cosmetics, household products, or other consumer goods.

Here's how product-based MLM typically works:

Product Selection:

The MLM company selects a range of products to sell, often focusing on a specific niche or industry. These products are usually of decent quality and are priced competitively.

Recruitment of Distributors:

The company recruits individuals (distributors) to sell its products. These distributors may purchase the products at wholesale prices and then sell them at retail prices, earning a profit on each sale. They are also encouraged to recruit new distributors to join the company.

Compensation Structure:

Product-based MLMs usually have a multi-level compensation structure. Distributors earn commissions not only from their own sales but also from the sales made by the distributors they recruit (downline). Additionally, they may earn bonuses and incentives based on their sales volume and the performance of their downline.

Training and Support:

MLM companies often provide training and support to their distributors to help them succeed in selling products and building their teams. This may include marketing materials, sales techniques, and motivational events.

Focus on Sales and Recruitment:

Success in product-based MLMs typically requires a combination of effective selling skills and the ability to recruit and train a team of distributors. Distributors are often encouraged to host parties, events, or presentations to showcase the products and recruit new members.

Controversies and Challenges:

Product-based MLMs have faced criticism and controversy due to concerns about their resemblance to pyramid schemes, where the emphasis is more on recruitment than product sales. Some MLM companies have been accused of deceptive practices or operating as illegal pyramid schemes. It's essential for individuals considering participation in an MLM to thoroughly research the company and its products before getting involved.

Overall, product-based MLM can offer opportunities for individuals to earn income by selling products they believe in and by building a team of distributors. However, it's essential to approach MLM opportunities with caution and to carefully evaluate the company, its products, and its compensation plan before investing time and money.