Basics
When it is a pyramid scheme, you make money by collecting a fee from the members below you in the hierarchy of the company, without selling an actual product. This then requires an amount of consumers for every downline or tier below you. For instance, an individual at the top collects from two people beneath him, these two people also need to find two people for each of them, and so on. When it reaches the 13th level, it becomes impossible to earn money as more people would be required to participate. But in multi-level marketing, the profit comes from selling a particular item to the people outside the company or by finding other distributors.