How
can takaful support the multilevel marketing business?
First, we need to understand the nature of multilevel
marketing business. It is a system of
several layers of sales team where the higher level will receive incentive
known as over-riding for any sales concluded by the lower ranking. The lower rank will focus mainly on sales
while the higher
rank will concentrate on
recruiting new team members as well as necessary training and motivational
activities. The top rank is usually
known as leader of the group and the rest commonly called advisors or sales
agents. This marketing system is quite
similar to the takaful agency system with multi-tiering.
Secondly, Shariah does not prohibit any sales
activities provided that the goods and services involved are acceptable to Shariah
principles. Besides, the sales transaction
must be conducted based on honesty, truthful without any force of selling.
Now, Takaful products can be used to enhance the
attractiveness of multilevel marketing business in various ways. The corporation which establish the
multilevel marketing business may arrange for certain type of takaful schemes
to cover all their marketing force against death, disability, medical,
etc. Thus, in the event that any of
their members suffer any loss as pre-defined in the takaful certificates during
their tenure within the organization, relevant compensation will be paid from the
takaful fund accordingly. Takaful products may also be used as part of the
loyalty program to retain the members besides promoting higher
productivity. This is commonly known as
retirement scheme or provident fund where the principal will contribute to the
fund based on the sales generated.
Vesting period is incorporated in the program where the members are
entitled for the full benefits provided that they remain with the organization
for certain period of time say 5 or 10 years. This is considered as fringe benefits for being a member of the
organization.
In addition, some sales items may require some kind of
product liability coverage to protect the organization against any liable suit
due to defect or negative side effect arising from using the goods. We sometimes come across with products that
carry statement like “Covered with RM1,000,000 product liability
protection”. Therefore, in the event of
any losses suffered by the consumer as a result of using the product, the
insurance or takaful company which cover the protection is liable to compensate
the consumer up to the amount of losses suffered and not exceeding RM1,000,000.
With this kind of takaful coverage, the multilevel sales force will be more
confident to promote their products to their potential customers.
