Multi level Marketing is a risky venture where in things so smoothly until people get a wind of the scheme and everyone is under the scrutiny of the law.If the scheme is focussing more on selling the prodcut to the consumers rather than increasing the new memberships or sub memberships, then the scehme is legal.Here to focus is on genuine sales and not money generated from new memberships.
If it focuses more and more on recruiting new members, then it's a pyramid scheme, where in you enter at the base and pay money initially that goes up the ladder to your friend who recruited you and then in turn to his recruiter and this pyramid goes up in many layers.Here the focus is not on sales but the revenue that flows in with every new recruitment.
Common examples are microwave grade food storage boxes,health supplements,protein powders, cosmetics etc. Why are such schemes risk, it's simply because money doesn't grow on trees and if the scheme is too good to be true, then it is a scam. Just imagine, how can one get paid just for introducing someone. With or without our knowledge we become part of an illegal money making or money circulation scheme where in we will be on the wrong side of the law.
The upside is a few quick bucks, the downside is huge, risking facing the wrath of the law. All these MLM schemes tries to focus on your list of contacts and how good you are in networking. Why not use this legally in any product sales division.