The History of MLM
How MLM (Network Marketing) got started and grew to meet the needs of the customer and the entrepreneur. It’s fascinating 
A company that creates a product must make that product widely known. Sales organizations made up of individual salespeople were (and still are) the backbone of business.
The number of salespeople in the United States began to grow rapidly starting in the late 1800s.
1861: 1000
1869: 50,000
1885: 100,000
1903: 300,000
1860 - Traveling salesmen were known as canvassers, peddlers, hawkers and drummers. Some of these former peddlers created trained sales organizations. Had it not been for their influence, many of the corporate names we’re all familiar with today might never have been.
-Henry Heinz, a former peddler, created an organization of 400 salesmen to sell various vegetable products, like ketchup and pickles, to people who didn’t grow their own.
-Asa Candler, another former peddler, built a sales force to sell Coca-Cola syrup to restaurants after buying the formula from pharmacist John Pemberton for $2300 in 1886.
Out of these organizations came companies that allowed their salespeople to have their “own” business.
1868 - J.R. Watkins founded the J.R. Watkins Medical Company, one of America’s first natural-remedies companies where associates marketed directly to consumers.
1890 - David McConnel started the California Perfume Company, based out of New York. In 1906 he had 10,000 sales representatives selling 117 different products. The California Perfume Company changed its name to Avon Products in 1937.
1905 - Alfred C. Fuller was another former peddler who greatly influenced future sales organizations. Fuller started the Fuller Brush Company and hired 270 dealers throughout the U.S. to follow his business plan on commission only. By 1919, the Fuller Brush Company had made $1 million in sales; by 1960, $109 million.
1931 - Frank Stanley Beveridge was the former vice president of sales for Fuller Brush Company. He and Catherine L. O’Brien founded Stanley Home Products. Influenced by the economic hardships of the Great Depression, Frank and Catherine envisioned an opportunity for people to start their own businesses with minimal investment, selling products that people use everyday. This vision was obviously taken from the Fuller Brush Company. Stanley Home Products sold household cleaners, brushes, and mops. Some Stanley dealers began giving demonstrations for clubs and organizations rather than for individuals to increase sales volume. Other Stanley dealers quickly embraced this idea as a way to maximize the selling presentation. These dealers took the “clubs and organizations” concept into homes by having the home owner invite friends and family over….and the “party plan” was born.
Stanley Home Products became the training ground for many well-known company leaders. Mary Kay Ash, founder of Mary Kay Cosmetics; Brownie Wise of Tupperware; Jan and Frank Day, founders of Jafra Cosmetics; and Mary Crowley, founder of Home Interiors all received early training as Stanley Home Products dealers - again spurred by the Fuller Brush company.
1934 - Carl Rehnborg started the California Vitamin Corporation selling what today are known as vitamin supplements. In 1939 the company changed its name to Nutrilite Products Company, Inc.
1945 - Nutrilite contracted with Mytinger & Casselberry to become the exclusive American distributor of Nutrilite products. Mytinger & Casselberry created the first documented MLM compensation plan. It worked like this: A Nutrilite distributor bought his supplies at a 35% discount. (Ex: A distributor bought a box of vitamins for $13 and then sold them for $20 = $7.00 profit.)
To encourage the distributor to sell more, Nutrilite paid an extra monthly bonus of 25% on the total sales. 20 customers x $13.00 (wholesale value) = $260 x 25% =$65.00 profit.
Once the distributor proved that he could get 25 customers he was allowed to become a DIRECT distributor - which meant that he could find others who wanted to sell the Nutrilite products and then they would buy their products from him. In essence, once he proved that he could get customers he was “promoted” and allowed to find other distributors and to train them to get customers. As an incentive to train his distributors well, once he and his distributors amassed 150 customers, he received an additional 2% of the total sales volume.
This is not a pyramid - it’s a quota-based system of management. Those who sold the most boxes of vitamins got a higher reward than those who sold little. The MLM compensation plan was simply an extension of the Fuller Brush Company rewarding production. With MLM (Network Marketing) , the company could motivate a sales person to not only sell more products, but to train others to sell more products as well.
1945 - Earl Tupper created a line of flexible, lightweight plastic containers with tight-sealing lids. He started selling his products through conventional retail outlets, but realized the products needed demonstration. Earl Tupper then teamed up with Brownie Wise (formerly with Stanley Home Products) and launched Tupperware Party Plan, now a world-wide billion-dollar company operating in 40 countries.
1949 - Rich DeVos and Jay Van Andel (high school buddies and business partners) returned from military service and became distributors for Nutrilite vitamin supplements in 1950. After a brief dilemma with Nutrilite in 1959, the two abandoned ship and formed the Amway Corporation. In 1972 Amway Corporation acquired Nutrilite.
1956 - Dr. Forrest Shaklee developed a method of extracting minerals from vegetables and used MLM (Network Marketing) to distribute his products.
1963 - Mary Kay Ash creates Mary Kay Cosmetics. By 1996, company sales were in excess of 2 billion dollars.
1975 - The FTC (Federal Trade Commission) filed suit against Amway corporation for operating a pyramid scheme.
1979 - An administrative law judge ruled that Amway’s multi-level-marketing program was a legitimate business opportunity, as opposed to a pyramid scheme.
Recommended next page: Pyramid history
Tim Sales built an MLM business with an income of over $150,000 per month with 2,400+ new distributors joining per month. He now creates MLM training tools and sales aids for everyone in network marketing. To discover Tims' proven network marketing ideas and strategies that will grow your MLM business faster, visit www.FirstClassMLMTools.com
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I have often wondered about the origins of MLM - as we know it today! This article has cleared up that issue for me.
Thanks very much Tim.
By the way, I am impressed with FirstclassMLM!
This was very informative and interesting.
Wonderful! I’ve been “studying”, teaching and writing about network marketing for 20 years and this article taught me things I didn’t know. Clean, clear, concise and interesting… one thing that got my attention is how LONG many of these companies have been in business. That could only happen with useful, valuable products and a proven, powerful business model.
Thanks for the positive info. Can’t wait (and don’t want to) to check out all the material here.
I appreciate you!
Awesome information!! This is perfect. I’m happy to finally see this all in one place. Great job putting it all together.
Great info…I was a Stanley distributer in the 60’s and didn’t know the history!! Thanks soooo much for doing the research and providing the info we all — as sales and marketing pro’s should know.
This article is a very serious look at our history and is an excellent work! Thank you!
Interesting history. I had no idea this business was so old!
This is a wonderful history of a very old profession and one that has unlimited potential for every interested person willing to do what it takes to succeed. Thanks so much, Tim for making this history available.
Excellent knowledge that we should have. thank you Tim.
The evolution of this countries financial success is not only fascinating, but ongoing.
Thanks Tim
Tim, thanks for this article on the history of MLM. I knew bits and pieces but not the whole time line. I grew up with the Fuller Brush man and Tupperware parties, the Avon lady next door and Mary Kay cosmetics in my purse, Shaklee Basic H in my kitchen. My dad is a salesman with his own business (not MLM) so it never seemed strange to me that people would want to make their living selling what people need–and to be paid via a system that pays commission on sales and sales training and leadership. This concept is “as old as the hills” as people from my home town say. Thanks for this information!
Thanks for the history of MLM. I found it very interesting.
Excellent trip on MLM history. Useful for everyone who is really interested on the truth of this industry Tank you
Michail Mavrovouniotis
Excellent. This all in German language will be “VERY” important for German MLM-leaders.
I think if this type of history were taught in school, young and old people would be less discouraged about their future, and might realize that being a professional salesperson is a great alternative to looking for jobs armed with a resume.
I am definitely adding this site as a must read for new recruits that want to be a part of my organazation. When you build the knowledge in yourself about our industry it gives you so much more strenth to be able to deal with the ney-sayers that we all meet daily. Joe Kresser, Cincinnati, Ohio
Great research. Thanks Tim
Nice article! A minor correction, DeVos and Van Andel did not “abandon” Nutrilite when they started Amway, they actually continued promoting Nutrilite in parallel for sometime after starting Amway.
Wow! Tim, you did a great job of researching this industry. I had done my own research for my own downline years ago but you filled in a lot of blanks spots. Looking forward to reading the rest of your articles. Thanks so much for all you do for this industry.
Tom V.
Thanks Tim,
I’ve been in this industry for 12yrs and this article has taught me more about the History of our industry than anything else I’ve seen!
Awesome, what a great resource for our industry.
Laurence
Quite interesting…always wondered how this MLM thing came about. Thanks for the article!
Very interesting to find out the historic about M.L.M. I never thought it was that old. This is my first contact with it and I thought it was a rather new concept.
Thanks for the goood work.
Very interesting & very informative and actually “fun” to learn about the origins of our industry.
Always love to know the background. This is illuminating. Thanks.
I would be interested in later history as well. This was very informative. Thank you.
Wow! I always value knowing the history behind something. Your research should be valuable to all who come after us. Tim Sales, you are good; and you are good for our MLM industry.
This was so fun to read! Thank you Tim for making all this information at hand for all of us!
Wow! Didn’t know enough about this history. About time we grow up as an industry, get professional and go FirstClass. Never knock our fellow MLM companies - unless they are truly scams - and present a united industry front.
The Watkins man used to visit our farm with things we could purchase… much later the Fuller Brush man came by my apartment in town… the first Tupperware Party; our first pots & pans were purchased for us by Mom & Dad from a home salesperson for a company.. ahh, such memories of all the businesses as historically described here, guess I am giving my age away, but had to share!
Thanks Tim for the reminders.
Very infomative reading.
Thank you for the brief history.
I am very emotional reading this article. I now found the encyclopedia of mlm for my prospects and members.
Encouraging!
very interest bit of history
Excellent information on continuously evolving yet amazing system of distributing quality products to customers in a ntural way i.e through word of mouth mode. The article and website is an eye opener for new people who are just intoduced into the Direct sales organizations. Thanks for enlightening me.
Excellent information on continuously evolving yet amazing system of distributing quality products to customers in a natural way i.e through word of mouth. The article and website is an eye opener for new people who are just intoduced into the Direct sales organizations. Thanks Tim for your valuble mails enlightening me.
Very good history , most people do not know that .They assume that thay do not know that our life is an MLM game .
thanks Tim .
It is very interesting way to earn more money by MLM. But regret that more people does not know about it. We should spreading of MLM system door to door.
Thanks.
I recognized most of the company names with gratitude to them, and particularly Amway, for standing up and allowing us to enjoy the opportunity of developing our own businesses to the extent that we desire.
Thanks to you, Tim, for putting this together for us.
Most intresting read! I have being in the US for 19 years now and had no knowledge of these information. Thanks Tim you are truly a blessing to the MLM industry. This gives me great courage and confidence to promote my company.
Tim,
Great job disseminating the truth about MLM. Would be glad if you can name the book distributor(s) in India where titles such as “The Professionals..” by Charles King are available. With the Internet exploding its reach let the world know the exponential potential of the MLM business model as true and serious! Keep at it!
I Have many more about MLM but here i will share only one thing i.e. MLM is an only the one roof and platefore where individual may get success & can do fulfuill/complete his/her dream by giving some efforts.
As always Tim …
You are THE example - of what we need to replicate if we expect outsiders to embrace network marketing as a serious alternative career path. A lot of people are hurting out there. They are lost! If they only took a deeper look at our industry - for the right reasons.
As John Kennedy once said …
“Don’t ask what your country can do for you but rather ask what you can do for your country”?
I’ll put it out to all of your readers …
“What can we do to support you and to better serve our INDUSTRY?” Food for thought -huh?
Warmly
Bob Dignard-Fung
Costa Rica
top class,firstclass info.
thank you very much.
jacques
south-africa ,mosselbay,capetown
good things
Although you have interesting tidbits of information. You left our a very successful and important person in American History who was an inventor and Network Marketer. That is Madame C.J. Walker. She is known as the U.S.A.’s first African American female millionair. Her network marketing practices are still studied and taught today. I just read an article from the Harvard Business Schools website and the classroom study of her business. Madame Walker lived from 1865 - 1920!
1st I introduced with Mlm mid time of 2008. Now my family has involved with this business.Now our only one income system is Mlm. I belife that anybody can change his life how he likes.
Now this is good stuff!!!! Just more proof that our business model is really something to be proud of!!! Thank you Tim!!!
MLM is growing stronger every day. In a tough economy Netwrok Marketing is at it’s strongest. When researching an opportunity, make sure you choose a real company with real products that has been arojnd for a long time. thats what I did and I am glad I did.
excellent work, congratulations tim.
Thanks JIM! MLM is the best! Power! Energy! Vital C!
Multi-Level Marketing (MLM), or simply known as NETWORKING and I call it the power of LEVERAGING. In MLM, people joined because of the wonderful, useful and effective products, and get membership discounts. Some joined, mainly for business or shall I say as their additional income (sideline). While others do both.
There are many things that I like the MLM way of business, one of those is, it mold a person to become a LEADER.
I liked the MLM History part where everyone like me in direct selling must know it to understand its importance.
Thanks again Tim
Good work gentle men but as we know MLM is now one of the most popular metod of earning money among students legaly.
so I would request you to highlight the latest legal companies which have started MLM in INDIA and other countries.
Thank you
Hi Tim,
This is a fascinating history lesson about MLM and direct selling. I’ll be sure and share it with many others at my blog.
Dear Mr.Tim,
Your work is very useful to millions of people.
Thanking you
Rajithkummar, India
Some people gives us wrong information about the MLM history,
It’s not only greatest opportunaty history of the world, It’s also called the GOD direct help !!!!!!!!!!
Mr,Tim
Thanks a lot,
Have a great journey!!!!
Mohammed Tipu Sultan
i am growing by using this, it will great helpfull to the user n can change their life.
This was a good read I will continue to read your information.
its amazing and great work