The Evolution of Network Marketing: The History of a Great American Enterprise by Bob Schwartz

bob schwartzWithout question, multi-level marketing is one of the most effective and lucrative ways for a company to introduce and sell its products in the modern marketplace. It relies upon good, old-fashioned word of mouth as well as leveraging the many skills and talents of entrepreneurs whose personal testimonies sell both the product and the opportunity. And, it’s win-win because network marketing affords absolutely everyone, regardless of education or experience, the opportunity to own a business for a very minimal investment, and with very low overhead costs. Plus, the income potential is virtually unlimited.

It seems like a no-brainer, today. People worldwide have discovered that the principles behind direct selling, network marketing, MLM, and the party plan unlock the doors to personal financial success and fulfillment. But, it wasn’t always so apparent. In fact, if it weren’t for some early trailblazers, the industry certainly wouldn’t be what it is today.

Let’s take a look at how MLM got its start, and see how it has involved into the booming industry that it is today.

Beginning in the 1860s, traveling salesman known as peddlers, hawkers or drummers canvassed neighborhoods, selling products from door to door. Some of these salesmen included Henry Heinz, who eventually created a sales force 400 strong to help him sell ketchup, pickles, and other vegetable products, and Asa Candler who also ended up building a large sales force to help sell Coca-Cola syrup to restaurants after purchasing the formula from a pharmacist for $2300.

What other notable and recognizable events contributed to the birth and evolution of MLM? Here’s a brief timeline:

1868: J.R. Watkins founded the J.R. Watkins Medical Company, one of America’s first natural-remedy companies where associates marketed directly to consumers.

1890: David McConnel started the California Perfume Company, based out of New York. In 1906 he had 10,000 representatives selling 117 different products. This company was eventually renamed “Avon”.

1905: Alfred C. Fuller started the Fuller Brush Company, hiring 270 dealers nationwide to follow his commission-only business plan. Fuller Brush made its first million dollars by 1919.

1931: Spurred on by the Great Depression, Frank Stanley Beveridge and Catherine L. O’Brien founded Stanley home products, offering an opportunity for people to start their own businesses selling products people use every day. Some Stanley dealers gave demonstrations in homes and clubs, and the “party plan” was born.

1934: Carl Rehnborg started a vitamin supplement company that would eventually become the Nutrilite Products Company, Inc.

1945: Nutrilite created the first documented MLM compensation plan. Distributors bought their products at a 35% discount and earned an extra 25% bonus on total monthly sales.

1945: Earl Tupper created the Tuppeware container, and along with Brownie Wise, launched the Tupperware Party Plan, which is now a billion-dollar company operating in 40 countries.

1956: Dr. Forrest Shaklee developed a method of extracting minerals from vegetables and distributed his products through MLM.

1963: Mary Kay Ash founded Mary Kay Cosmetics, a leading direct sales company today with well over 2 billion dollars in sales.

1969: Harland C. Stonecipher founded Pre-Paid Legal Services, Inc. Pre-Paid Legal went from being traded on the New York Stock Exchange back to a private company in 2011 when it was acquired by MidOcean Partners for $650 Million and subsequently changed its name to LegalShield.

1980: Herbalife International, a multi-level marketing corporation that develops, markets and sells nutritional supplements, weight management, sports nutrition and personal-care products, was born. Today, Herbalife employs about 7,400 people worldwide. Herbalife reported net sales of $3.825 billion in 2014.

1985: Melaleuca, Inc., a company that sells environmentally friendly cleaning supplies, superior nutritional products and personal-care products came onto the MLM scene. Founded by Frank VanderSloot, Melaleuca had 800,000 customers for its products in 2011. A June 2014 source states that Melaleuca has paid about $3.7 billion to its marketing executives since its founding.

1993: Robert Stevanovski, Greg Provenzano, and twin brothers Tony and Mike Cupisz, founded the American Communications Network, Inc. ACN resells internet service through AT&T, Verizon, CenturyLink, Time Warner Cable, Comcast, and Cox. ACN offers wireless services through Flash Wireless, Verizon, T-Mobile and Sprint. Television services are provided through DIRECTV, Dish Network, AT&T U-verse and Verizon FiOS.

2002: Xango, LLC, a privately owned international multilevel marketing company based in Lehi, Utah began marketing and distributing Xango Juice, consisting of a blend of mangosteen and other juices, as well as a complete skin care line, personal care line, and energy and nutritional supplement line all formulated with botanical ingredients.  In December 2012, Direct Selling News reported that Xango concluded its first ten years of operation with sales operations in 43 countries, 27 office locations, 49 distribution centers, more than two million distributors, and about $2 billion in cumulative revenues.

And, the list goes on and on.

Today, thanks to all the aspiring American entrepreneurs throughout history, MLM is bigger and better than ever, with business opportunities to fit every budget and lifestyle and match the personal interests and mission of any aspiring entrepreneur.

 

It’s an industry that certainly stands the test of time, proving the greatness of the tenants those very first entrepreneurs embraced in the 1800s. Who wouldn’t want to be a part of something this timeless and relevant in the modern marketplace?

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