In the most legitimate MLM Watkins companies, commissions are earned only on sales of the company's products or services. No money may be earned from recruiting alone ("sign-up fees"), though filthy lucre earned from the sales of members recruited is solitary attraction of MLM arrangements. If participants are paid primarily from chicamin received from current recruits, or if they are required to buy more creation than they are likely to sell, then the company may be a pyramid or Ponzi scheme, which is illegal in most countries.
Companies have devised a conglomeration of MLM compensation plans over the decades.