The History of
Network Marketing



The history of network marketing dates back to around 1934 when a man called Carl Rehnborg developed and started selling the first multivitamin or food supplement in North America. He sold the multivitamins through his company, California Vitamin Company (now Nutrilite).

Carl sold his food supplements person to person through word-of-mouth referrals. Some of his customers started referring new customers to him. Instead of selling to these new customers he suggested to the old customers that they sell to these new customers themselves.

For each sale Carl rewarded customers with discounts on their purchases. This way the concept of multi-level-marketing developed.

In 1959 two successful Nutrilite distributors parted ways with Nutrilite and founded Away. Amway soon established itself as the leading network marketing company.

I mention Amway not because I am one of their distributors, but because Amway paved the way for the network marketing industry.

Here is how it happened.

During 1975 the Federal Trade Commission (FTC) in the United States filed a complaint against Amway Corporation alleging five counts of violating the FTC, among them that Amway was effectively operating an illegal pyramid scheme...

And the FTC ruled in 1979 that:

  • Amway was not an illegal pyramid scheme since its system is based on the retail sales to consumers.
  • Amway is not in business to sell distributorships and is not a pyramid distribution scheme.

Since this ruling many network marketing companies were formed and some of the existing ones adopted network marketing as part of their marketing model. It is an almost impossible task to list all network marketing companies.

It is estimated that more than 50 million people worldwide are involved in network marketing. The industry is recognised as the fastest growing industry in the world because more and more companies realise the power that lies in networking.

As a result of the impeccable history of network marketing, network marketing is fast becoming the business of choice for work from home entrepreneurs. Unconfirmed reports indicate that today more millionaires are created in network marketing than was the case during dot com era.

Network Marketing

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