It's simple - You pay the buy-in fee to receive your startup kit -> You use the kit to sell an offering -> You refer other people -> You get a commission when they pay and sell an offering -> You get a commission when their referrals pay and sell an offering.
But there's a catch.
The person gets their share from all the work everyone does - referrals and sales.
MLMs major source of money is the buy-in fee and not the sales of the offerings. They market the model as an aspiration to let more and more people join the network. You are convinced that as more people join, the less your work would be.
MLMs are known to ruin several relationships as you tend to head to people you already know and use your relationship to convince them to invest in the model.
MLMs use emotional marketing and aspirational marketing to target lower-income groups showing them dreams of easy and early money, which in turn, exploits them even more. Such people become easy targets because of their lack of education, knowledge, and finance.