I have talked about the merits of Network Marketing, Multi Level Marketing, or whatever you want to call it before. I felt compelled to revisit the topic because I believe in this model as a choice for wealth creation and a better life.
I am embarking on a series of posts on the topic as I feel like we have come full circle in this industry. To do that of course means starting at the beginning and that is where I got my first surprise.
Check out my short video here and please do read the rest of the post below.
Network Marketing – The History
I like many people, believed the Amway Corporation was the first in the industry. My research from sites like Paul Zane Pilzer’s Wellness Revolution has uncovered that in fact Carl F. Rehnborg invented both multivitamins (1934) and Multilevel Marketing (1945).
Rehnborg called his company California Vitamins in 1934 and the name was later changed in 1939 to Nutrilite.
The sale of food supplements back then needed a great deal of customer education so in order to distribute the product Rehnborg’s wife suggested they set up a sales force of people who were already zealous consumers of their products. This strategy meant a constant need to recruit and train new salespeople so in 1945 Rehnborg and his two main distributors came up with another idea. This idea would not only revolutionize his company but would create a whole new multibillion dollar industry.
Rehnborg idea was a marketing plan that would allow salespeople to sell the products as well as recruit and train new salespeople. When they reached a certain level, they could break away from the person who recruited them and become direct distributors themselves.
In 1949 two young entrepreneurs purchased a Nutrilite sales kit and quickly rose to the highest sales level in the company. Ten years later, while keeping their Nutrilite business these two young men, Jay Van Andel and Rich DeVos started another company to sell household products with a similar marketing plan – they called their company Amway. The name came from “American Way”.
In 1973 when Carl F Rehnborg passed away at age 86 Amway purchased Nutrilite and still today maintain it as a separate corporate entity with several billion dollars in annual sales.
The industry is therefore 65 years old, not the 50 years so often quoted.
Note the suggestion by Rehnborg’s wife - The sale of food supplements back then needed a great deal of customer education so in order to distribute the product Rehnborg’s wife suggested they set up a sales force of people who were already zealous consumers of their products. Hey is this still not true today? Note that back then in the 30’s we had recommendation- word of mouth – people sharing with people).
Please leave me your comments and questions below. Did you know the history of how Network Marketing started? And please share this post with your Twitter and FB friends by clicking on the share buttons. I appreciate you telling others. And stay tuned for the next in the series…
Related posts
- Network Marketing Today - Part 2
- What is MLM? - Part 3
- What is Diversification?
- What is MLM? - Part 4
- WordPress User – How does someone become a User?
- Home Business Tips – Dollar Productive Activity
- Small Business Help
- Network Marketing Today - part 3
- What is MLM? - Part 2
- Stand Out with Video Email
{ 33 comments… read them below or add one }
Hi Sue,
thanks for this informative post. MLM – if done right – is a great supplier of residual income. It is huge because it combines the power of compounding with leverage.
I didn’t know either that our industry is already 65 years old, so it’s good to know that.
Take care
Oliver
Oliver Tausend recently posted..Outsourcing For Network Marketers – Oliver Tausend’s First Steps
I agree that it is a great way to build residual income Oliver. And I note your words “done right”, a very critical point.
I was so convinced that the industry started with Amway 50 years ago I almost did not do my own research – now there was a lesson for me. It also shows how “stories” get spread.
Have a great day
Sue
Networking marketing resembles more like mlm (multi level marketing) versus affiliate marketing is more like commission based sales. Marketing Plan
My understanding is that Network Marketing and MLM are the same. There are other names I have also heard. I agree affiliate marketing is different.
Thanks for finding my blog and for commenting.
Sue
Hi Sue
Thanks for this history lesson. Makes sense doesn’t it to sell products this way. Wonder if there are other MLM’s that think they were the first to start network marketing as well?
Belinda
Belinda Cunningham recently posted..5 – Imagination – The workshop of the mind
It’s funny Belinda I hated history at school and still often do not look backwards but I found researching this fascinating. You are spot on it does make sense to sell products this way. It can be such a win/win for everyone.
Take care
Sue
Hey Sue,
thanks for that interesting piece of history. It’s pretty amazing to see where the concept of network marketing has gone. It was certainly a brilliant brain storm by Carl F. Rehnborg.
Sue, my reason for contacting you today is two fold.
In light of the ‘Blog Mastery Award’ that is happening, I’d like to let you know that I’ve nominated you as one of my 10 nominee’s.
Your blogging is always interesting and informative, and I appreciate all the effort you put into it.
Congratulations Sue, you will find my list of nominee’s on http://tonisuggests.com/blog-mastery-award/
In Health and Wealth
Toni
Toni King recently posted..Blog Mastery Award
Yes I agree Toni that it was a brilliant brainstorm by Carl F Rehnborg. I am sure he had no idea back then how this industry would blossom.
Thank you so much for nominating me again. It is funny as I saw a tweet by someone else to say I was a second time winner before I saw yours. How funny.
Thank you for the praise on my blog, it means a lot to me. I think it is important for us all to feel we are making some sort of difference.
I am going to check out who else you nominated now.
Thanks Toni
Have an awesome day.
Sue
Aloha Sue, I enjoyed your post and video clip. You know Amway has come along way, I remember as a kid my parents used to do those home parties and neighbors came by. Then one day I just didn’t see or hear about it anymore with my parents. I guess they threw in the towel. So here i am doing the deal, except online and I know I will follow thru and not give into quitting. Glad I came by and thanks for sharing! Lanikee
PS..come by and visit and share a sweet comment. The benefits are sharing is caring! Mahalo!
Lani Kee – Mind Mapping Techniques recently posted..Do Online Commentators Give Backlinks And PR Support
Hi Lani Kee
Thanks for finding my blog and your comment. I too remember the Amway days. When I married my husband he was doing it part time. That was my introduction. I think many people were like your parents, had a go and then left it. Good to hear your strong commitment to follow through with your business.
I am about to check out your site too.
Have an awesome day.
Sue
Sue,
I love it! This is very interesting to see where MLMs began! It’s funny to hear that the need for nutrition education began at that time, still all these years later, as a country we’re still educating consumers to take vitamins! And it’s really fun to see those involved in network marking are also those who understand that vitamins are necessary and that MLM is a perfect business model!
I really look forward to this series! I will use your work to help me explain to my friends and family (non of which are marketers) the benefits of the business!
Linda G. Cox recently posted..When Generations Collide
Hi Linda
I really enjoyed digging back to find the information. It is a bit sad really that we are still educating people to take vitamins. I am sure we have come along way but still have a way to go.
I understand why the model of NWM started with nutritional supplements as word of mouth does work.
I am looking forward to writing the rest. They are sketched out only now.
Sue
Sue
Thanks for the history lesson. I rememer reading this somehwere else years ago. You mentioned to great companies too! I look forward to reading more on the subject. People helping people succeed what a concept, if you can grasp it.
Have a Great Day
Chester
Hi Chester
Thanks for finding my blog and commenting. I am not usually one to dig back into history but I enjoyed doing this one.
Yes people helping people a concept some unfortunately do not understand.
You also have a great day.
Sue
Hey Sue!!
thanks for this fabulous post and I´m glad to know you and also to call you a friend. People like you certainly make this industry so powerful, and especially if we are talking about the power of a friendship!
We´ll talk soon, enjoy your day to the fullest!
Gerald
Thanks Gerald for your lovely comment. You recognize the power of friendship because you are a good friend to others. I am very glad we met. I love the internet for this reason most of all. The people and connections we are making.
Have a wonderful weekend and talk soon.
Sue
Hi Sue…fascinating to think that the first MLM was started 65 years ago. The fact that the business model has survived for that many years has to be proof alone that it works! I’m looking forward to this series that you are planning.
Louise
Louise Steiner recently posted..Why “Micro Niche Finder” Is My Favourite Search Engine Keyword Tool!
I agree Louise after 65 years the model has been tested and survived! I also think it is interesting that after 65 years many people are not familiar with the model. We have work to do!
Sue
Hi Sue,
The history of Networking Marketing is very interesting. There’s a lot to it that most people don’t realize. So many people think it’s very new and not a stable venture but it is truly time tested and a viable way for companies to do business. I look forward to the walk down the hallways of Network Marketing with you.
Don Enck recently posted..A Day In The Life…
Thanks Don. It is very interesting (and somewhat sad) that after all these years most people think the NWM industry is not a stable venture as you say. I wonder how long it will take to change it. I am looking forward to completing the rest of the series on the topic.
Take care
Sue
Hi Sue,
Enjoy your site as it’s not over done and easy to navigate
I have it from from authority that the MLM,NWM,P2P etc model was started in the insurance industry over 70 years ago. Something else that i don’t think that many know is Henry Ford didn’t invent the assembly line even though he was given the credit…he copied it off the meat packers in Chicago who had been dis-assembling for years.
Keep up the great work Sue.
Hi Shane
Thanks for finding my blog and your your comment. I wanted to keep my site simple so I appreciate your feedback.
Wow that is interesting that the industry may have started in the insurance industry. That makes sense. Also very interesting about Henry Ford. It is amazing how a popular belief can actually be incorrect
Have a great week Shane
Sue
Fascinating, Sue. I didn’t realize that MLM was this old. As a student of history, I thoroughly enjoyed how you turned back the pages of time to MLM’s beginnings. It’s amazing that Amway is still around.
I am part of a healthy, thriving MLM company. It is a big, energetic family that is going to change the habits of people who are interested in re-evaluating health issues.
I enjoyed your video:)
Darlene Davis recently posted..Blog Mastery Award
Hi Darlene
I was surprised when I started digging back. I also think the fact Amway is still here shows it is a valid, legitimate way to do business.
My MLM sounds like yours in the big family. It is great to be part of one.
Take care
Sue
Terrific work! This is the type of information that should be shared around the web. Shame on the search engines for not positioning this post higher!
Thank you for your comment. I think the search engines should position it higher too.
Thanks
Sue
This is such a great resource that you are providing and you give it away for free. I enjoy seeing websites that understand the value of providing a prime resource for free. I truly loved reading your post. Thanks!
Thank you for your feedback I aim to give value
Thank you, I have recently been searching for information about this topic for ages and yours is the best I have discovered so far.
Thank you. I am happy to be able to be of value.
I think at age 46 when in an era of frequent ecomony downturns, Network marketing can prove to be a good career even for people who are professionally or academically qualified. Nowadays when one has reached age 40 and above, theirs positions can become very vulnerable due to theirs high wages. However, how would you advise any one to start off in Network marketing before they are asked to go? Thanks!
Travis thanks for your comment and that is a great point and question. I think it is best for people to start a network marketing business while they are still employed. I know many people doing that and as long as they can find about 10 hours a week to commit to it they will get to a stage where they can leave their job (hopefully before they are asked to go).
Sue
Thanks for your comment and for adding it to your Trackback. I appreciate that.
{ 8 trackbacks }