Other companies tell similar stories. In 2011, only 12.7% of Nu Skin's 80,613 active salespeople in the U.S. received a commission check. And more than half of the $114.2 million in U.S. commissions it distributed that year went to less than 1% of salespeople, a group of roughly 113 salespeople dubbed "Blue Diamond Executives."

Many companies, like Avon and Mary Kay, released few details on the average income of their sellers.

How many of these companies are there?

In the U.S. alone, there are hundreds of multilevel marketing companies that sell a variety of goods and services.

The Direct Selling Association currently represents about 200 companies and says there are about 50 more awaiting admission.

Many U.S.-based companies also have massive international sales operations that in some cases make up the majority of their sales.

What do they sell?

Pretty much everything. Many of the household names in the multilevel marketing industry, like Avon, Mary Kay and Nu Skin, sell cosmetics and skincare products. However, there are companies that sell candles, groceries, insurance policies, electrical service, you name it.

Amway -- which has been around for decades -- sells food, vitamins, cookware and makeup, among other items.

Related: Nu Skin and the short-sellers

Wellness products, such as energy drinks or the weight loss bars and shakes sold by Herbalife, have been the latest craze.

Take Beachbody, the company behind Tony Horton's fitness craze P90X.

In the two years after Beachbody created a multilevel marketing division using "Team Beachbody coaches," its sales spiked more than 60%.

So is it worth it?

Critics say that the multilevel marketing model is unsustainable. If you recruit all of your friends and neighbors to sell the same product, they ask, won't you eventually run out of customers?

"If I wanted to sell a product, the last thing I want is my next door neighbor to sell the same product," said FitzPatrick.

Turnover rates are high. But as salespeople fail, more are recruited to take their place.

Herbalife, for example, had a 52% retention rate for its top salespeople, in 2011, according to the company's annual report.

Industry supporters counter that multilevel marketing presents a viable full-time business opportunity for those who put in full-time hours and effort. But most salespeople only work part-time to make extra cash or to get a discount on their favorite product.

"Most people sell for only a few hours out of every week. They don't spend a lot of time on this," Mariano said. "That's the beauty of the business."