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The concept behind
Network Marketing, also called MLM (Multi Level Marketing), has existed in USA since
the beginning of 1940s.
California Vitamins was the first company to use the concept and was the
first company to give provisions to the distributors that recruit new members. 2
years later the company changed their name to Nutrilite. Two of the most
successful distributors in Nutrilite were Rich DeVos and Jay Van Andel. The two
friends could see the opportunities Multi Level Marketing had brought on to the
field and went together and started Amway International, which is the second
largest Network Marketing company in the world today.
The evolution continued in the industry
until the year 1970. Some incapable Network Marketing distributors created problems
for their company, Amway International. The founders of Amway ended up in
court, charged by FTC (Federal Trade Commission). FTC claimed that Amway was an
illegal pyramid scheme, which the company (amway) was successful in proving not
to be. After the four year long trial, Network Marketing was proved to be a
legal form of business.
The
first growth curve in the world
After Amways success came what we translated
as the first growth curve in the industry. Between 1979 and 1984, hundreds of
companies was established, and FEDSA (the American
direct sales association) could report over 1 million people had started with
Network Marketing. After the success in USA, the companies expanded into
the rest of the world and achieved great growth in many Russian, Australian and
Asian countries. (Russia
experienced an unbelievable start with 1.5 million people starting with Network
Marketing in 3 years!) Unfortunately in this period there were many people that
failed. Network Marketing companies focused to much on recruiting of new people
instead of focusing on development of new systems and products/services.
The second growth
curve in the world
After the first growth curve the
growth flattened out. The leaders in the industry was forced to thing in new
ways and searched for new ideas and technology. And the new technology came.
Because in the 1990s it changed for the industry’s favour, and from 1993 we
experienced the second growth curve. 5 million people were recruited into
Network Marketing in just 7 years.
The second growth curve
in Europe
It began not long ago and is increasing
in the next years because of strong growth of new companies, expansion over countries
and a more professional impression. It is also due to clear laws and
regulations in the industry along with breaking new technology trough the
internet, telephones and transportation. There is a strong distribution
technology that uses every technical recourse for effective use. Network
Marketing now has full acceptance in USA, and is now accepted as a
important part of the American economy and culture. Network Marketing was early
on met with a lot of scepticism in many countries but that is about to change.
This is due to better laws, enlightened media attention and clearer
understanding generally with people attaining the difference with pyramid
schemes and Network marketing. Network Marketing is here to stay and grow
stronger than ever in every country of the world.
Network Marketing is today the fastest growing
distribution way and business model. It is the most effective way to move a
product to the consumer.
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