Profitability and Growth Topology Analysis of Unilevel-type of Network Marketing Structures

Year: 2013       Vol.: 62       No.: 2      

Authors: John Carlo P. Daquis; Angelique O. Castaneda; Nelson D. Sy; Joseph V. Abgona

Abstract:

This study analyzes a type of multi-level marketing (MLM) structure through a simulation of MLM systems. In unilevel MLM, distributors earn from both sales from direct selling and commissions from recruitment of downlines. Several distributional assumptions were made in constructing the system, such as the use of the uniform, Bernoulli, and Poisson distributions. Member income is measured based on commission from recruit pay-ins in their downlines and income from direct selling. Based on the simulated unilevel MLM structures, the fundamental behavior of a unilevel MLM is captured and analyzed in terms of its network growth topology and profitability.

Keywords: multi-level marketing; network simulation; unilevel structure; complex systems; probability distributions

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