Is MLM Really A Scam?

What is MLM?
MLM is the acronym for Multi-Level Marketing. It is a kind of business that encourages a registered member to register other people (called down-line) to gain more profit as the each persons sells.

It is a very common kind of business model that is already in operation in all the continents and in most countries around the world. Typically, you are presented the benefits of joining the business and asked to register with a some money and encouraged to register other people under you as well.

The business rewards you primarily based on your sales as a merchant. However, there are other rewards when you register people as your down-line. The secondary profit is not usually large compared to the primary profit derived from your direct sales using the platform.

Not all types of MLM are into direct sales of products or services, some make money and reward their members from the registration fee. So in this case, the registration into the platform has a mandatory fee that new members must pay. In some MLM platforms, this registration fee must be renewed by the member subsequently to continue benefiting from the platform.

The Criticism

According to this article below found on Wikipedia, 

The overwhelming majority of MLM participants (most sources estimated to be over 99.25% of all MLM distributors) participate at either an insignificant or nil net profit.^[10] Indeed, the largest proportion of participants must operate at a net loss (after expenses are deducted) so that the few individuals in the uppermost level of the MLM pyramid can derive their significant earnings. Said earnings are then emphasized by the MLM company to all other participants to encourage their continued participation at a continuing financial loss.^[11]

What do you think about this MLM businesses. Do you think the criticism is valid? 
Does MLM truly rewards participants?

Feel free to share your thoughts below using the comment box.