The History of Network Marketing and The History of MLM

By Brian Baulch | Blog

May 07

What day did Dinosaurs first roam this world? Which was the first type of Dinosaur? We are not exactly sure, though MLM is not nearly as old, the exact date or type is also still unclear. MLM evolved over a number of years, the marketing system was in development prior to World War II. As we all know, MLM is still evolving and maturing everyday.

Though there is word on the internet that “Wachters” was the first company, most people think and agree that Nutrilite, “The California Vitamin Company” was the first true MLM company. Not that it necessarily started as an MLM company, but the type of compensation plan that it later evolved into was much like a multi-level commission payment generated plan.

In addition to being crowned with the founders of a network marketing payment plan, they were also the founders of the Vitamin and Food Supplements industry, way back in the 1920s. Two of the more successfully representatives of Nutrilite was Rich DeVos and Jay van Andel. In the ensuing decade, they built a large, prosperous organization across America.

After the company saw how much money the marketing arm was making they quickly tried to change things around to dwarf commissions, and in light of that, Rich DeVos and Jay van Andel decided to take the situation in a new direction.

In 1959 Rich DeVos and Jay van Andel, formed the birth of a company called The American Way – Amway for short. In the following decades, Amway Corporation successfully established itself as a leading multilevel marketing business, built on strong values and founding principles that continue to sustain their company today.

Perhaps you have you heard of Amway. 😉

Here DeVos and Andel brought with them the multi-level marketing plan which had before been so successful.

Soon there after the Amway Corporation took on the might of the Federal Trade Commission in a test case which took the brakes off the development of the ‘network marketing industry’.

In brief, the decision in this case was that Amway was NOT a pyramid scam, but a legitimate form of doing and offering business.

This ruling opened the flood gates and there were very many companies set up to operate in this way in short order.

Amway continued to rule the industry, and within ten years, they had bought Nutrilite, and Amway has rarely looked back ever since.

Of course, this kind of success attracts a lot of attention and, before long there was also a dark side to the MLM story, one that still causes problems to this day.

The smart company owners soon realized that they couldn’t take advantage of people under the strict, ethical rules of conduct required by the MLM companies, also that doing so would weaken the integrity of the industry. Others came up with a counterfeit version, based on a scam from the late 1920s (The Ponzi Scheme) that looked like MLM.

Thus RE-VAMPED was the Pyramid Selling Scheme.

In the 1960s and 1970s, pyramid schemes proliferated, whereby a ‘product’ was attached to a money pyramid, in order to pretend that they were actually marketing SOMETHING!

It’s ironic that people still mistakenly accuse MLM of being pyramid selling when it was actually the reputable MLM companies that first petitioned government authorities to have pyramid selling outlawed.

This type of business is nowadays regulated and there is a great deal of consumer protection. However, the world is full of dubious characters and there are new scams being made to look like legitimate companies all the time. Keep your eyes open and always do your own due diligence before jumping into any opportunity, it is your life and your time, take responsibility. By trusting members of the DSA, MLMIA, and MLM DRA you won’t go far wrong, but watch out for start-ups which may fail, taking all your hard work with them.

Over the following decades, and continually in to the future MLM is evolving and further developing into a wide array of companies, product ranges, and reward plans. This somewhat unique, and powerful system continues to grow companies and people everyday.

In today’s modern world, the network marketing industry has grown up. Many of the great leaders of the industry have developed some very sophisticated tools to support the back end infrastructure of managing large world-wide networks. New and easy to use prospecting tools have sprouted up that are proven to work for anyone willing to go through the learning and personal development growth curve.

Web 2.0 is not just a buzz word. Social networks, blogs, pod-casts, and online discussion boards are an excellent free resource to promote your business. John Milton Fogg, author of The Greatest Networker in the World calls it “Internetwork Marketing”. You now have great power at your finger tips. More than ever before you have an opportunity to maximize and multiply the power of 6 degrees of separation.

The network marketing industry still continues to face challenges, as all developing industries do. However, the foundation has been laid for the next 50 years to be prosperous, revolutionary to the world of product distribution, and personal success in all areas of life for those who are part of the growth of successful companies.

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About the Author:

Anders Gustavsson
Infinite Synergy Learning Systems
The Infinite Synergy team developed MLM The Game, and has been involved helping home-business entrepreneurs build strong relationships and succeed faster through playing this game since 2003′. Please visit this network marketing training website at for details.

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