Networkmarketing
Network marketing, or multilevel marketing (MLM) is both an old and new business at the same time.
The earliest form of MLM that is known began in the 1920s when some direct sales companies began paying their representatives a one-time finders fee when they brought new salesmen into the company. In 1945 Nutrilite Products Inc. became the first company to allow salesmen to draw permanent commissions from their recruits.
The structure of MLM evolved as time and the economy marched on. Probably the most important thing to have happened to the structure of MLM is the commission system became multi-leveled (i.e. the name multilevel marketing.) Salesmen began getting commissions from the recruits that THEIR recruits recruited, and their recruits, and so on. The details differed from company to company, but the idea of earning a passive income from your sponsorship line took hold.
[( FOOL'S GOLD )]
As with any new concept or invention, there were people who conducted business honestly and fairly, and there were crooks.
Some people sold get rich quick schemes and pie in the sky ideas, then took the money and ran.
The pyramid scheme was born at this time... put in money, get two or more other people to put in money, have each of them get two or more people, and the money goes up to the top. Nasty business.
It wouldn't be correct to say that people weren't playing by the rules, because the rules hadn't been invented yet. Just like the Old West, people made up the rules as they went along. And every once in a while a sheriff or marshal came around and set things straight.
[( LAW, ORDER, AND LEGITIMACY )]
1979 was a very important year in network marketing. This was the year that the Federal Trade Commission, which had undertaken a long investigation of MLM determined that Amway, which was (and still is) the largest MLM company, was a legitimate business and not a pyramid scheme. At this point lots of companies began to spring up that distributed their products and services through the network marketing model.
The industry began a growth cycle that continues to this day.
[( MLM GOES MAINSTREAM )]
Some of the companies that now occupy a huge market share in their particular product line either are done entirely through an MLM model or have divisions of their company that are MLM.
Examples:
Amway is a Fortune 500 company.
MCI started as a network marketing company and maintains a division that distributes through MLM.
Herb life is the largest health and nutrition company in the world...their entire product line is distributed through network marketing.
Mary Kay and Avon are household names when it comes to skin care and cosmetics. Both are network marketing companies.
Tupperware is a network marketing company.
MLM got it's foot in the door, and it wasn't getting out!
[( THE COMPUTER REVOLUTION )]
Like every other facet of life, MLM was changed forever by the introduction of computers into everyday life. In the beginning stages of MLM, all the way into the 1990s, the business of MLM was conducted almost exclusively by telephone and in person. Network marketers would sell their products and sponsor people into the business by talking to people they personally came into contact with, placing newspaper ads, and placing magazine ads. Business spread through word of mouth.
The introduction of computers and the Internet blew that model apart. Where people were once limited by geography and telephone expenses, they could now reach people throughout the world as easily as reaching those in the next town. People began building customer bases and organizations throughout the world.
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