Well of course there is profit built into the products, how else would they make money? But I believe in most cases they get paid on a PV (Point Value) and generally don't make money directly from each product they sell. There is a group in Amway that used the web (I belive it is Quixtar or something, I went to one of these a couple of months back) and the distributors do not have to keep products. Basically they sign people up who want to shop on the web, and make commisions that way. Sounds like they are attempting to change their sales practices.
For what that is worth...
My personal views on Network Marketing are this:
A lot of these companies, Avon, Mary Kay, Amway, et al. are legit and have passed govt. inspection. If someone wants to do this for a living, then that is their right. I did Amway in college and it was a very tough business, but it did teach me a little about taking care of money and getting out of the "employee" mentality, which has led me to budding career as a financial planner. I would rather chance working for myself at least once in my life than say I never had the guts to try...
About the whole pyramid thing, jobert, it sounds like you or someone close to you has had a bad experience. But your assertions that it is a con are false. You need to do a little more research into mutli-level/network marketing before you label the whole genre as a scheme or con. It is one of the fastest growing professions in America today. Home based business of all types are exploding. This country was built upon people who owned their own stores, farms, etc. Only in the last century has America become a nation of employees.
Not defending any one company directly, but it seems to me some people may not have all the facts here...