How the Direct Selling Industry has changed during my lifetime by Paul Morris

paul morrisA personal perspective by a person who has lived through many of these changes and experienced them first hand and has learned much of this history and spent many hours engaged in personal conversation with Rich DeVos and Jay Vandel and Sam Rehnborg.

Before the turn of the last century in the mid to late 1800’s retail stores such as F.W.Woolworth, R. H. Macy’s, Marshal Fields, W. T. Grant’ and Gimbal’s flourished and people would drive from the countryside into the city to shop at these stores. In the 40’s and 50′ we lived on a 55 acre farm out in the country and my mother and father would take us on Saturday’s and drive 7 miles to New Bedford, Massachusetts and shop at the various what we called “department stores”.

Basically, we, the customers, WENT to the store to purchase the products. This form of marketing was called RETAIL SELLING (through stores).

In the 1940’s and 1950’s every person in America had an Avon Lady and a Fuller Brush Man and occasionally the door bell would ring and there would be an Encyclopedia Salesman, Electrolux Vacuum Cleaner Salesman, or stainless steel waterless cookware salesman. We even had a bread man and a Milk Man that delivered milk and bread a couple of days a week and an Ice Cream and Cottage Cheese truck stop by on Saturdays, they also sold delicious refrigerated chocolate éclairs.

Basically, they, the retailer, brought the product to us the customer.  This form of marketing products was known as DIRECT SELLING.

Direct Selling consisted of a FEW people who worked FULL TIME and were TRAINED to be HIGHLY SKILLED to SELL products.

In 1934 Carl Rehnborg started “The California Vitamin Company” and began selling his special vitamins to friends and neighbors and letting them sell to their friends. Then in 1945 two men,  Lee S. Mytinger and William S. Castleberry introduced a compensation plan to Carl Rehnborg that allowed distributors to recruit other distributors and earn on Multiple levels of sales. They changed the name of the company to Nutrilite Products and implemented this new pay concept of letting salespeople earn on the sales of salespersons they recruited. This created a new paradigm that allowed leaders to earn on the efforts of sales activity in their various LEVEL of marketers. My mother and father actually bought Nutrilite products in the mid 50’s from a friend of the family who lived in New Bedford.  Her name was Hope Hilton and she faithfully delivered several boxes of the Nutrilite XX to our farm house out in the country on a monthly basis. As a child I remember coming down for breakfast and seeing the oblong red tablet and two round green tablets sitting beside my plate for me to swallow. That would be chased by a large tablespoon of Father John’s Medicine which contained a good quantity of Cod Liver Oil and was manufactured in Lowell, Massachusetts. That product was not direct sales but rather was purchased at our local Rexall Drug Store.

In 1954 Forrest Shaklee started the Shaklee Company marketing a product called VitaLea and a liquid cleaning soap called Basic H. Then in 1959, after Nutrilite was in trouble due to Mytinger and Casselberry being engaged in a major battle with the FDA, Rich DeVos and Jay Van Andel, (who were top Nutrilite distributors), concerned that Nutrilite might get shut down by the FDA, spun off from Nutrilite and started the American Way Association and later changed its name to Amway, expanding on the concept started by Mytinger and Casselberry, and furthered by Forrest Shaklee.

Basically the product was brought to us by friends who had been introduced to the product by their friends. This form of marketing was known as MULTI-LEVEL MARKETING and was nicknamed MLM.

MLM consisted of a LOT of people with no skills working PART-TIME who were motivated to SHARE products. This marketing concept created a whole new PARADIGM that changed the face of the industry. But it was very labor intensive. Toll calls were $ .25 a minute but gasoline was cheap so it was built most by doing home meetings in a different home every night and hotel meetings one night a week and a training meeting on Saturdays. It required ordering product from your sponsor who in turn ordered from their sponsor, who in turn ordered from their sponsor, thereby requiring the distributor who dealt DIRECT to the company (hence the title, “Direct Distributor”) to maintain very large inventories valued at 10’s of thousands of dollars since they could only purchase product by the whole case.

Computer and software technology enabled MLM companies to allow distributors to pick up the phone and order directly from the company instead of ordering through their sponsor and upline. Now distributors no longer had to carry any inventory and no longer had to run a store out of their homes with distributors constantly stopping by to pick up product. This was a streamlined, less physically involved, simpler, version of Multi-Level Marketing and gave birth to a new PARADIGM. It was still Direct Selling, and it was still MLM since multi levels of people received commissions and overrides but the lack of having to carry large inventories and the elimination of ‘call in’ order nights and pickup nights a day later gave birth to a new name for this process.

Basically the product was still brought to us if we were a customer, but was brought to us by a friend working in their spare instead of a full time sales person, but if we were a DISTRIBUTOR, the product was brought to us by UPS or FedEx instead of our friend, yet our friend and the people above him/her still earned commissions and bonuses on that purchase. This form of marketing became known as NETWORK MARKETING.

No longer did you have to go get the product, the company would simply ship it straight to you.  The industry exploded. New Network Marketing companies were popping up every month.

Fax Machines came onto the scene and now distributors could fax their order in at midnight rather than wait for daytime business hours and wait on hold for an operator to take their order. However, it was still a labor intensive proposition because to build a large organization a leader had to do home meetings almost every night. Aggressive leaders would do several home meetings all in one evening by starting one meeting at 7:00PM, starting another one at8:00PM and then rushing to a meeting in progress to close that one at 9:30 or 10:00PM, after which they would all congregate at an all night diner to share our success stories for the evening, and then do it all over again the next day.

The LEADER was the MESSAGE. Only leaders who were good on stage that could memorize the presentation and could speak in front of a group succeeded.

The invention of the VCR changed everything. In 1984 I purchased ten video’s and made hundreds of copies of the company’s slide show and added a presentation by me explaining the compensation plan. I taped notes to each video saying, “Push Play and call me when the video ends.” It worked, my second full month in the program I hit one million dollars in group volume and became number one in the country. By 1986 Companies began putting their message on VHS VIDEO cassettes and now the distributor was no longer the message but rather became THE MESSENGER!

This launched yet another new paradigm as now the leader did NOT need to go and give the message; they could simply MAIL THE MESSAGE.  People no longer had to learn how to give presentations. This form of Network Marketing was VIDEO ASSISTED NETWORK MARKETING.

We were no longer limited to only where we could drive and get home that night; we could mail VIDEO presentations all over the country. Leaders mailed dozens and hundreds of VHS Videos all over the county with a note saying, “PUSH PLAY” “and call me in 12 minutes.”

Companies hit as much as 10 million their twelfth month in business. All with the distributors having NO computers and NO cell phones. The industry grew even faster.

The advent of the INTERNET and the PERSONAL COMPUTER fostered even faster growth and now new companies were starting up every week. Distributors could now order ONLINE 24 hours a day.

In the late 80’s, as flat rate long distance calling became available, live meetings were replaced with conference calling and the “one on one” and “two on one” presentations were replaced with phone calls and three-way calling presentations. As more and more people got on the INTERNET, training meetings were gradually replaced with ONLINE WEBINARS. Network Marketing became a hybrid of Network Marketing and Internet marketing. People were now simply Network Marketing via the Internet, but they were still NETWORK MARKETING and although more streamlined, it was still labor intensive with three-way phone calls and screen sharing all day long and conference calls in the evening and local meetings or training webinars once or twice a week. This form of marketing was (and for many, STILL IS) INTERNET ASSISTED NETWORK MARKETING.

But now there is a WHOLE NEW PARADIGM. Those who embrace it will make fortunes.

It is pure AUTOMATED ONLINE INTERNET MARKETING with no (or very little) human assistance.

The whole world is ONLINE, so why aren’t YOU marketing ONLINE?

Think about it… where did you get many of the recent products you purchased?

Did you use the Yellow Pages? Did you drive to a shopping mall and go looking for what you wanted? Did you answer a call from a telemarketer? Did you respond to a newspaper ad? Did you respond to a flyer in your mail box? If you are like most people you did none of the above… YOU WENT ONLINE.

So WHY AREN’T WE MARKETING ONLINE?  Are we “stuck in the rut” of the old paradigm?

We are entering a new paradigm where we NO LONGER SELL anymore. We no longer control the sales process.

Instead our potential distributors, affiliates and customers take charge and they participate in a “PURCHASING PROCESS” based on information we furnish to them in an email or a PowerPoint or FLASH Presentation ONLINE.

How to determine if you are stuck in the rut of the OLD PARADIGM:

  • Are you still calling prospects?
  • Are you still doing three-way phone calls?
  • Are you still doing screen sharing on Join.me?
  • Are you still conducting or attending conference calls?
  • Are you still doing or attending live meetings?
  • Are you still explaining the business via the telephone?
  • Are you still answering your phone calls from distributors who have questions?
  • Are you still doing training via the phone or via Webinars?
  • Are you still meeting people in restaurants to do “one on one” presentations?
  • Are you working MORE than a few hours a day?

If you have answered yes to any two of the above questions you are STUCK IN A RUT of an old paradigm.

Now don’t get me wrong… all of the above STILL WORK and should be continued on a limited basis, but if you do not want to join the wooly mammoth into extinction, then it is time to embrace the NEW PARAGIDM of building a marketing network.

Right now we have old fashioned “Network Marketers” attempting to do Network Marketing ONLINE, but that is NOT the NEW PARAGIM. The new paradigm is reaching the subculture of our society that consists of the growing number of potential marketers and customers who went right from their mother’s breast to an I-Pad. (They did not even go to a keyboard). Today they are the tee-shirt and jeans crowd with their smart phones and touch pad tablets. They are geeks, computer nerds, and all around regular people who simply prefer to chat online or via email or text rather than talk. If you call them via phone they will say, “Hey man, I told you not to call me. Just text me or email me.” (And most of them prefer text).

The latest technological advance in Network Marketing is using an APP for a smart phone that SORTS distributors and customers and then places them into a FUNNEL SYSTEM that literally automates everything.

The Internet has also expanded our territories from our neighborhoods and throughout the USA, to where now we can build GLOBALLY, all without leaving the comfort of our home.

There is estimated some 50 million people worldwide that are involved in Network Marketing in 180 countries. You will never reach them by doing three-way phone calls.

So, how about you? Are you the Wooly Mammoth who is tired of working long hours just to build a small group that pays you peanuts?

Are you ready to catapult your business into the 21st century and make your fortunes ONLINE.

Talk to your upline and find out if they have a system in place and plug into ASAP. If they do not find out what you need to do to create your own system.

Paul Morris
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