How Legal and Functional Unilevel Plan Is in in Multi-Level Marketing?

Last Modified:11 Jun 2023 13:11:00
How Legal and Functional Unilevel Plan Is in in Multi-Level Marketing?
The multi-level marketing (MLM) landscape is a combination of several business models, each offering a unique recruiting and compensation strategy. One such model is the Unilevel plan, known for its simplicity and infinite breadth. In this article, we aim to uncover the intricacies of the Unilevel scheme, how it works and key questions about its legitimacy.

Breaking down the mechanics of the Unilevel programme

The Unilevel program is based on the principle of "infinite breadth". This means that distributors are free to recruit as many distributors as they want and all these newly recruited distributors are directly affiliated with them.


This approach fosters an environment where distributors can build a large direct recruiting network and maximize their potential income from personal selling. However, while there is no limit to width, Unilevel plans usually limit the depth of commissions. This limit usually reaches a certain level, beyond which the distributor does not earn a commission on sales made by his downline.


The attractiveness of the Unilevel program
The strength of the Unilevel program is its simplicity. No need to balance affiliates or teams like other MLM models. Marketers can focus on recruiting and personal selling without worrying about complex structure requirements. In addition, the high income potential of dropshipping can be an attractive proposition for potential distributors.


Learn about the legality of MLM and Unilevel schemes
The legitimacy of any MLM business, including Unilevel schemes, primarily depends on its focus on selling genuine products or services. A legitimate MLM model ensures that distributors earn income from direct sales and sales. This income should not simply be a by-product of recruitment.


Illegal pyramid schemes, on the other hand, often masquerade as pyramid schemes and profit primarily from recruiting new members rather than from actually selling products or services. Pyramid schemes often emphasize employment rather than product sales and may have no real market value. These schemes are illegal in most jurisdictions. As for the Unilevel program, it can work as a legitimate and viable MLM strategy if the focus is on actually selling products or services.

Global perspective and rules
As MLM models are governed by region-specific regulations, it is very important to understand the legal nuances of these models, including Unilevel schemes, in your specific geographic location.
With its simple structure and unlimited scope, the Unilevel program offers an attractive opportunity for distributors in the MLM field. However, it is very important to understand its legal framework and ensure that the activity is aimed at selling legal products or services. Always be alert to distinguish a genuine MLM model from a hidden pyramid scheme. A true MLM model will always prioritize the value of their product or service and their distributor network. 

Author: Pooyan Ghamari, Swiss Economist 

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