Final answer:
Network marketing, also known as multi-level marketing (MLM), does rely on distributors at multiple levels, where distributors earn commissions from their sales as well as the sales of the recruits in their 'downline'.
Step-by-step explanation:
Network marketing does indeed rely on distributors at multiple levels. This structure is also known as multi-level marketing (MLM). In this business model, individuals sell products or services and earn a commission on their sales as well as the sales made by the distributors they recruit. Therefore, the network of distributors expands through several levels, with each participant potentially recruiting more distributors below them, forming a 'downline.'
Recruitment of new distributors and the creation of these multiple levels is a fundamental aspect of the MLM strategy. The distributors not only sell the products but also work to bring in more participants to the network. As such, the distribution hierarchy can grow to include many levels of compensated participants.
The efficacy and ethics of MLMs can sometimes be a point of controversy, with critics often describing certain MLM operations as akin to pyramid schemes. Nevertheless, legal network marketing companies distinguish themselves by focusing on sales of actual products or services rather than just the recruitment of new members.