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NAICS Code 541613-04 Description (8-Digit)

Multi-Level Marketing (MLM) is a business model that involves recruiting individuals to become distributors of a company's products or services. These distributors then earn commissions on their own sales as well as the sales made by the people they recruit into the business. MLM is also known as network marketing, referral marketing, and direct selling. MLM companies typically offer a range of products or services, such as health supplements, beauty products, or home goods. Distributors are encouraged to sell these products to their friends, family, and acquaintances, as well as to recruit others to become distributors themselves. The more people a distributor recruits and the more products they sell, the higher their potential earnings. Critics of MLM argue that the business model is often exploitative and that many people end up losing money rather than making it. They also point out that MLM companies often rely on high-pressure sales tactics and make unrealistic promises about potential earnings.

Hierarchy Navigation for NAICS Code 541613-04

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Tools

Tools commonly used in the Multi-Level Marketing industry for day-to-day tasks and operations.

  • MLM software
  • Social media marketing tools
  • Email marketing software
  • Lead generation tools
  • Sales funnel software
  • Customer relationship management (CRM) software
  • Affiliate marketing software
  • Webinar software
  • Video conferencing software
  • E-commerce platforms

Industry Examples of Multi-Level Marketing

Common products and services typical of NAICS Code 541613-04, illustrating the main business activities and contributions to the market.

  • Health supplements
  • Beauty products
  • Home goods
  • Personal care products
  • Weight loss products
  • Essential oils
  • Kitchenware
  • Clothing and accessories
  • Educational courses
  • Financial services

Certifications, Compliance and Licenses for NAICS Code 541613-04 - Multi-Level Marketing

The specific certifications, permits, licenses, and regulatory compliance requirements within the United States for this industry.

  • Direct Selling Association (DSA) Membership: The DSA is a national trade association for companies that manufacture and distribute goods and services sold directly to consumers. Membership in the DSA is voluntary, but it provides a level of credibility and legitimacy to MLM companies that are members. The DSA also has a code of ethics that member companies must follow.
  • Better Business Bureau (BBB) Accreditation: The BBB is a nonprofit organization that helps consumers find businesses they can trust. Accreditation by the BBB means that a business has met certain standards of trustworthiness and ethical behavior. Many MLM companies seek BBB accreditation to enhance their reputation.
  • Federal Trade Commission (FTC) Compliance: The FTC is a federal agency that regulates business practices and protects consumers from unfair or deceptive acts or practices. MLM companies must comply with FTC regulations, which include rules about income claims, product claims, and disclosure of information to potential recruits.
  • State Business Licenses: MLM companies must obtain a business license in each state where they operate. The requirements for obtaining a license vary by state, but generally involve registering with the state and paying a fee. Varies by state
  • Sales Tax Permits: MLM companies must collect and remit sales tax on products sold to customers. To do so, they must obtain a sales tax permit from each state where they have a presence. Varies by state

History

A concise historical narrative of NAICS Code 541613-04 covering global milestones and recent developments within the United States.

  • Multi-Level Marketing (MLM) has a long and controversial history worldwide. The first MLM company, California Vitamin Company, was founded in 1934, and it was later renamed Nutrilite. In the 1950s, Amway, one of the largest MLM companies, was founded. In the 1970s, MLM companies started to face legal challenges, and the Federal Trade Commission (FTC) started to regulate the industry. In the 1980s, MLM companies started to expand globally, and in the 1990s, MLM companies started to use the internet to recruit and sell products. In recent years, MLM companies have faced criticism for their business practices, including allegations of pyramid schemes and false income claims. In the United States, MLM companies have a similar history. The first MLM company, Nutrilite, was founded in the 1930s, and Amway was founded in the 1950s. In the 1970s, the FTC started to regulate the industry, and in the 1980s, MLM companies started to expand globally. In the 1990s, MLM companies started to use the internet to recruit and sell products. In recent years, MLM companies have faced criticism for their business practices, including allegations of pyramid schemes and false income claims. Despite the controversies, MLM companies continue to operate in the United States and around the world.

Future Outlook for Multi-Level Marketing

The anticipated future trajectory of the NAICS 541613-04 industry in the USA, offering insights into potential trends, innovations, and challenges expected to shape its landscape.

  • Growth Prediction: Stable

    Multi-Level Marketing is expected to continue its growth in the USA in the coming years. The industry is projected to benefit from the increasing popularity of e-commerce and social media platforms, which provide a cost-effective way for MLM companies to reach a wider audience. Additionally, the industry is expected to benefit from the growing trend of entrepreneurship and self-employment, as more people seek to start their own businesses. However, the industry may face challenges from increased regulation and scrutiny, as well as from negative perceptions of MLM companies. Overall, the industry is expected to continue its growth trajectory in the USA, albeit with some challenges along the way.

Industry Innovations for NAICS Code 541613-04

Recent groundbreaking advancements and milestones in the Multi-Level Marketing industry, reflecting notable innovations that have reshaped its landscape.

  • Social Media Integration: MLM companies are increasingly using social media platforms to reach a wider audience and promote their products. This includes using social media influencers to promote products and creating social media campaigns to generate buzz.
  • Personalized Marketing: MLM companies are using data analytics and other tools to create personalized marketing campaigns that target specific demographics and interests.
  • Health and Wellness Products: Many MLM companies are focusing on health and wellness products, such as supplements and essential oils, which are in high demand among consumers.
  • Online Training and Support: MLM companies are providing online training and support to their distributors, making it easier for them to succeed and grow their businesses.
  • Mobile Apps: Some MLM companies are developing mobile apps that allow distributors to manage their businesses on the go, making it easier for them to stay connected and engaged.

NAICS Code 541613-04 - Multi-Level Marketing

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