The 27 at the bottom gain by paying wholesale, while those above also make commission. This appears not so different from the old way, where a manufacturer sells to a national wholesaler who sells to a local wholesaler who sells to a shop, each taking a profit. The big difference is that all the profit stays with those in the network. The Network Marketing company gains by spending zero on advertising. In fact, the money saved is often spent on research and development, and many MLM companies are at the cutting edge of their particular technology.
Most new businesses go broke within the first couple of years.
There are two methods of starting up a new business which have a better than average chance of working. One is franchising, which is fine if you have a few thousand pounds at your disposal to invest. The other, needing just a few pounds, is network marketing. Even established businesses selling on the High Street are having problems nowadays. Times they are a-changing, and new shopping methods are taking over.