Job Satisfaction in Network Marketing and Multilevel Marketing Systems
Overview
This paper examines job satisfaction among agents and distributors in multilevel marketing (MLM) and network marketing systems. It analyzes how compensation structures, recruitment-based models, and reward schemes impact worker satisfaction and performance, while distinguishing between legitimate MLM operations and fraudulent pyramid schemes that emerged during the 1990s.
What this essay covers
- Introduction and background on multilevel marketing structure and compensation models
- Historical context of MLM success and the rise of fraudulent schemes
- Analysis of job satisfaction factors including motivation and incentive structures
Preview
Job Satisfaction in Network Marketing (Multilevel Marketing)
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Job Satisfaction in Network Marketing (Multilevel Marketing)
- Introduction
- Background
Multilevel marketing (MLM) or network marketing entails the selling of products through agents located in offices, homes, and other non-retail stores. The agents are usually rewarded using incentive schemes that are developed by MLM firms. In addition, there are compensations associated whenever they recruit another person into the system. Individuals qualify as distributors whenever they purchase an initial start-up package. Because they are never full-time workers of the firm, there are no incentives related to salary. The only source of compensation is through reward plans as well as successful recruitment of other members into the network marketing hierarchy. Whenever an agent recruits another distributor, the new agent becomes the downline while the recruiter becomes the upline within the same network. Therefore, the success or performance of the individual is measured through product purchases and recruitments that increase the volume of their network (Lee, Lau, & Loi, 2016). The distributor of a certain product is usually paid based on the volume achieved and the overall volume contributed through his or her network.
It is essential to note that the MLM model has been adopted by many people across the world. There are many companies that utilize the same concept to distribute products and enhance its market penetration. During the 1990s, the model was considered as one of the most successful business approaches.