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…