Author(s): Eunice B. Akindeji, Yunus G. Doba and Eustache Tanzala Kikasu
This paper examines the motivational factors that influence distributors in engaging with multi-level marketing companies in KwaZulu-Natal. However, MLM has faced numerous problems that discourage interested parties such as distributors and customers. MLM is often regarded as a Ponzi scheme, pyramid scheme, financial fraud, or other associated illegal get-rich plan. These schemes often provide false expectations, exaggerated promises of returns, and other deceptive marketing practices. Because of the similarities between the online Ponzi scheme and MLM marketing in terms of structure and operations, people become confused in differentiating between the two. This paper examines the influence of a good understanding of quality and innovative products as it relates to distributors’ satisfaction in MLM. It discusses the impacts of MLM on employment and poverty alleviation, as well as the challenges and entrepreneurial opportunities aligned with MLM. The descriptive research paradigm using quantitative and convenience sampling methods was employed with a sample size of 200 respondents. Data were analyzed using SPSS 26.0 statistical approach for both descriptive and regression statistics. The results of this study demonstrated that product quality, innovation, and methods of identifying the difference between MLM and pyramid/ Ponzi schemes were revealed as more important predictors as factors that contribute to or determine distributors' motivation in multi-level marketing, and the way businesses can leverage these drives to attract and keep distributors. In addition, incentives such as compensation packages, product discounts, management policies, and up-line support are also amongst factors that are contributing to distributors' motivation towards participating in multi-level marketing. These factors are also significant in increasing awareness in order to improve the marketing strategy for growth and expansion, as well as to contribute to distributors’ satisfaction. This study revealed that MLM has proven to generate employment for individuals, allowing them to be financially empowered by giving them a source of income generation that alleviates poverty. Thus, it is crucial that people should be motivated to learn more about MLM and encouraged to get involved in MLM entrepreneurial opportunities.