The Development Of Network Marketing
Learning the evolution of network marketing from the past 60 years provides an insight into the MLM market as it is today. The concept of allowing sales people to actually buy the products and market them has its roots in the 1800s. Peddlers like Henry Heinz, of Heinz Ketchup, were looking for ways to push the products into the market without having to hire full time sales people. The idea was rudimentary but eventually took hold, and network marketing was born.
When Henry Heinz wanted to push his ketchup and pickle products to those who did not grow their own, he did much of the work himself. However, he began to see the benefit of giving a commission to anyone who wanted to sell the product instead of a full salary. This idea was eventually used by Asa Candler, the founder of Coca-Cola.
The 1940s and 50s were when the idea of ownership in sales was perfected. Several of the most successful Multi-Level Marketing businesses began. The most famous original was Amway. Originally, the founder sold Nutralite, but the manufacturer became jealous of the sales success and began scaling back production hoping to force the sales side to fork over more revenue. The founder simply began producing his own formula, built the company known as Amway, and eventually bought the original manufacturer. The founders of Mary Kay Cosmetics and Tupperware both had their start during this period as well. Using the same owner-seller model they are some of the largest corporations in existence.
The model was so successful that there were people who created pyramid schemes that used the recruitment methods to build their own fortunes. Rather than offering products that could be sold, the schemes offered only memberships that if a person built their pyramid they would receive financial rewards. The fact that it was based on the MLM model has provided an unfortunate link in the minds of people that has been hard to shake, even though the MLM companies have been very successful.
The FTC sued Amway in 1975 trying to prove they were a pyramid scheme. The courts later sided with Amway, declaring them to be legitimate because they provide products. The downside is the link between the MLM industry and the pyramid scheme remains linked in peoples minds, even though the MLM corporations were the ones who requested the anti-pyramid laws in the first place.
As time and technology has advanced, so has the industry. The communication tools have improved. People are able to receive orders much faster. Training has gotten better and even skeptical people have found how many products they use thanks to an MLM somewhere.
A whole new level was reached when the Internet came to be so widely used. Creating a website for business and compiling social networking with it, the legitimate and otherwise opportunities have grown exponentially. Most products are sold without the personal contact from client meetings. The concepts are the same and the intimate connections remain an important part of the process.
Through technology advances and a rough and tumble time, the evolution of network marketing from the past 60 years has proven to be a model that is successful and will last. Trust is built through relationships; networks are built through trust.
When Henry Heinz wanted to push his ketchup and pickle products to those who did not grow their own, he did much of the work himself. However, he began to see the benefit of giving a commission to anyone who wanted to sell the product instead of a full salary. This idea was eventually used by Asa Candler, the founder of Coca-Cola.
The 1940s and 50s were when the idea of ownership in sales was perfected. Several of the most successful Multi-Level Marketing businesses began. The most famous original was Amway. Originally, the founder sold Nutralite, but the manufacturer became jealous of the sales success and began scaling back production hoping to force the sales side to fork over more revenue. The founder simply began producing his own formula, built the company known as Amway, and eventually bought the original manufacturer. The founders of Mary Kay Cosmetics and Tupperware both had their start during this period as well. Using the same owner-seller model they are some of the largest corporations in existence.
The model was so successful that there were people who created pyramid schemes that used the recruitment methods to build their own fortunes. Rather than offering products that could be sold, the schemes offered only memberships that if a person built their pyramid they would receive financial rewards. The fact that it was based on the MLM model has provided an unfortunate link in the minds of people that has been hard to shake, even though the MLM companies have been very successful.
The FTC sued Amway in 1975 trying to prove they were a pyramid scheme. The courts later sided with Amway, declaring them to be legitimate because they provide products. The downside is the link between the MLM industry and the pyramid scheme remains linked in peoples minds, even though the MLM corporations were the ones who requested the anti-pyramid laws in the first place.
As time and technology has advanced, so has the industry. The communication tools have improved. People are able to receive orders much faster. Training has gotten better and even skeptical people have found how many products they use thanks to an MLM somewhere.
A whole new level was reached when the Internet came to be so widely used. Creating a website for business and compiling social networking with it, the legitimate and otherwise opportunities have grown exponentially. Most products are sold without the personal contact from client meetings. The concepts are the same and the intimate connections remain an important part of the process.
Through technology advances and a rough and tumble time, the evolution of network marketing from the past 60 years has proven to be a model that is successful and will last. Trust is built through relationships; networks are built through trust.
