Unveiling trust as a mediator in distributor loyalty within South African multi-level marketing

Abstract

Background: Limited research has been conducted in South Africa’s multi-level marketing (MLM) sector, particularly pertaining to distributor satisfaction and its influencing factors.

Aim: This study aims to determine the extent to which trust mediates the relationship between distributor satisfaction and loyalty within the MLM framework in South Africa.

Setting: This study was conducted among distributors within the South African multi-level marketing environment.

Method: This study adopted a descriptive research design. A total of 376 distributors from health and wellness sectors, focused on MLM companies in South Africa. They were selected through non-probability convenience sampling. Confirmatory factor analysis (CFA) was employed to validate the data’s reliability, while structural equation modelling (SEM) was utilised to examine both the direct and indirect effects postulated in the study.

Results: The analysis revealed a notable indirect positive effect, linking distributor satisfaction to distributor loyalty, with trust acting as a mediating variable. Additionally, direct positive correlations were identified between distributor satisfaction and loyalty and between distributor trust and loyalty.

Conclusion: For health and wellness MLM companies in South Africa, it is vital to enhance distributor loyalty and trust. This can be accomplished by increasing distributor satisfaction and refining the way they communicate business opportunities.

Contribution: Multi-level marketing can benefit from the findings of the research as this improves insight into the direct and indirect effects of distributor satisfaction on distributor loyalty and trust and provides empirical insights into the MLM industry.