Multi-level marketing plans are a way to sell goods or services through distributors. These plans usually promise that if you sign up to be a distributor, you will receive commissions - not only on your sales of the plan's goods or services, but also on the sales of the people you recruit to join the distributors. Pyramid schemes have a similar structure, but a completely different focus. They concentrate on the commissions you could earn just for recruiting new distributors, and generally ignore the marketing and selling of products or services.
Most states outlaw pyramiding.
Avoid any plan that offers commissions for recruiting additional distributors. Beware of plans that ask new distributors to spend money on high-priced inventory. These plans can collapse quickly - and also may be illegal pyramids in disguise. Beware of plans that promise enormous earnings or claim to sell miracle products. Ask the plan's promoter to back up the claims with hard evidence.