The article discusses the controversy surrounding multi-level marketing (MLM) companies and the role of software firms that support them. Although MLM companies are often equated with pyramid schemes, the software that underpins these businesses has not received as much attention. Legal experts emphasize that software companies must thoroughly vet their MLM clients to protect themselves legally. They have been servicing the MLM sector for over two decades, providing essential tools for tracking sales, structuring commissions, and monitoring representative performance, making them a critical but precarious component of the industry.
"It is a very dangerous space to be in," said Mark Eiglarsh, a criminal defense lawyer who has handled multi-level marketing cases before. "The onus is on [the software companies] to do everything they can to vet the companies they do business with, so not if, but when, a prosecutor questions them, they say, 'Here are the lengths we took.'"
Software companies that serve multi-level marketing firms have been around for more than two decades. This sub-industry often works with smaller- and medium-sized multi-level marketing companies that don't have the resources to build their own software.
At its most expansive, multi-level marketing software can be a company's backbone, structuring commissions, tracking sales, and identifying whether sales representatives are meeting their targets.
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