What is the MLM model in real estate? - Real Estate 2.0

The idea behind this method, proposed by pioneers in the field such as the founders of California Perfume Company (now Avon) and California Vitamins (David H. McConnell and Carl F. Renborg), is to sell their products through individuals. The main goal is to reduce costs, including middlemen, advertising, and hiring.

The salespeople trained by the company purchase a certain amount of products and distribute them themselves at home, to potential customers or via the internet. They are responsible for promoting the products to their acquaintances and on social media.

Salespeople also recruit new members themselves, more commonly referred to as direct reports. When these people also start selling, the sponsor receives a commission on their sales. The same is true for salespeople recruited by their direct subordinates. The number of direct subordinates can be limited and the commission depends on status, experience and type of company.

The best known brands include Tupperware, Herbalife and Avon. MLM companies are now represented in a wide variety of fields, including nutritional supplements, household chemicals, and even real estate.