EIGHT FACTS HOW NETWORK MARKETING BEGAN

Are you considering a Network Marketing Business?

Do you know what network marketing means?

Have you ever wondered how the Network Marketing industry originated?

What should you be looking for in a Network Marketing Company before committing to one?

How reliable is the Network Marketing Industry and what does the industry's future look like?

This is one of a series of articles I have published to help you better understand the Network Marketing Industry (previously known as Multi-Level Marketing or MLM). Other articles in this series about the Network Marketing Industry include but are not limited to:

12 Questions to Ask When Evaluating a Network Marketing Business; Explanation of Network Marketing; Why Network Marketing; The Future of Network Marketing; Elements That Make a Successful Network Marketing Company; Are You The Professional Network Marketer? And Is This the Best Time to Join a Network Marketing Business?

Eight facts about the history of Network Marketing:

1.  In 1940, California Vitamins became the very first company created to offer a multi-level payout. Hence the birth of the MLM industry. Later, California Vitamins evolved into NutriLife. 

2. Two NutriLife distributors, Jay Van Andel and Rich DeVos, left that company to form their own MLM enterprise, the Amway Corporation. No matter what your perceptions of Amway are, this company is a multi-billion dollar, global leader in our industry. The next three facts will give you a brief synopsis about Amway to better understand the Network Marketing Industry.

3. From 1959 to 1970, Amway had phenomenal growth both in annual sales and huge wealth for the owners as well as many of their distributors. There was no scrutiny from the federal regulatory agencies. But, success always breeds imitators and by the mid 1970’s there was a proliferation of copycat MLM companies, some of them guilty of fraudulent practices or unable to produce a product to support their business opportunity.

4. 1972 – 1976 , the MLM industry found itself fighting for its life as these companies came under intense scrutiny of state agencies and the Federal Trade Commission. Amway ended up bearing the brunt of the government litigation lasting four years and costing over $4,000,000. 

5. At the trial’s conclusion in 1976, the landmark Amway Decision was handed down declaring that Amway was not a pyramid company and that the MLM business strategy was a legitimate method of moving products to the end-line consumer. Parameters for legitimate MLM businesses were established and are still viable today. 

6.  From 1976 – 1984, over 2,000,000 people entered the MLM arena. Many companies moved to computerization that made business less cumbersome.

Distributors were able to order directly from the company.
They no longer had to stockpile products.
Compensation payments were no longer made to one distributor who then had to divide that check between qualifying downline distributors. 

Now companies were able to issue checks directly to each qualified distributor.

7. In the late 1980’s, the “Pyramid Laws” were tested once again. Companies like Fund America tried to play in this industry without offering tangible products. Litigation proved that Fund America was a paper chase--- a membership program devoid of any real parameters for long-term success. Its founder landed in jail.

8. During the 1990’s a number of companies tried to tie a service to the MLM concept. Only a few survived because the margins just were not there. 

Remember, the Network Marketing Company's product must be able to support the long-term effort by distributors. 

This proved difficult for some companies offering discount, long-distance services.

Others failed because their offering centered on durable, not consumable product lines: 

NSA introduced water filters then realized the company was failing so, in order to succeed, they had to launch a line of consumables, and they introduced nutritional products.

Quorum built quickly with alarm systems for homes and cars, but alas, without repeat sales the flow of products stopped, sponsoring stopped and the company failed. 

The Network Marketing Industry includes many teams of distributors who move from one company to another, bringing their partners from previous Network Marketing Businesses.  
This can produce false stories of success. 

The word gets out that people are making money fast.

These false stories encourage many people who desperately want to believe that you can get rich quick without working, to join those businesses.

Do your research and find a Network Marketing Business that has grown to its present stature without experiencing this phenomenon. Ask yourself these questions about the Network Marketing Business you are considering:

     Has it grown with distributors sponsored almost exclusively from outside the Network Marketing Industry or with experienced players from within?

     What is the strength and integrity of that home business opportunity? The harder you look at that company, the better it should get.

Be sure you have researched your new network marketing business venture thoroughly before investing your time, energy, and resources, especially if your goal is to make money on the internet and build towards financial security. You want this business venture to be a life changing opportunity for you and your family! Good Luck!

Experience a Life Changing Opportunity to make money on the internet with the right network marketing business.

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