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

Readers' Rating 4.61 out of 5 stars Vote now: How would you rate this article?
Poor2 Stars3 Stars4 StarsExcellent
Loading ... Loading ...

Support First Class MLM by linking to this article
Copy and paste the following HTML code into any web page:

88 Comments

  1. Frank Marais (December 28th, 2007 at 6:02 am)

    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!

  2. Cody Bridges (December 28th, 2007 at 6:54 am)

    This was very informative and interesting.

  3. John Fogg (December 28th, 2007 at 7:03 am)

    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!

  4. Roxanne Green (December 28th, 2007 at 8:43 am)

    Awesome information!! This is perfect. I’m happy to finally see this all in one place. Great job putting it all together.

  5. Maggie Jordan-Grant (December 28th, 2007 at 9:53 am)

    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.

  6. Patti Roney (December 28th, 2007 at 10:24 am)

    This article is a very serious look at our history and is an excellent work! Thank you!

  7. Jamie Masters (December 28th, 2007 at 10:34 am)

    Interesting history. I had no idea this business was so old!

  8. Evangeline Waybright (December 28th, 2007 at 11:01 am)

    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.

  9. Frank Sherman (December 28th, 2007 at 12:26 pm)

    Excellent knowledge that we should have. thank you Tim.

  10. James Reed (December 28th, 2007 at 4:35 pm)

    The evolution of this countries financial success is not only fascinating, but ongoing.

    Thanks Tim

  11. Kate Williams (December 28th, 2007 at 6:00 pm)

    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!

  12. Sergio Bueno (December 28th, 2007 at 6:37 pm)

    Thanks for the history of MLM. I found it very interesting.

  13. Michail Mavrovouniotis (December 28th, 2007 at 11:33 pm)

    Excellent trip on MLM history. Useful for everyone who is really interested on the truth of this industry Tank you

    Michail Mavrovouniotis

  14. Frank Raab / Germany (December 29th, 2007 at 4:26 am)

    Excellent. This all in German language will be “VERY” important for German MLM-leaders.

  15. Francesca Monte (December 29th, 2007 at 4:59 am)

    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.

  16. Joe Kresser (December 29th, 2007 at 11:07 am)

    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

  17. Steve Stearns (December 29th, 2007 at 11:10 am)

    Great research. Thanks Tim

  18. ibofightback (December 29th, 2007 at 11:50 am)

    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.

  19. Tom Van Drielen (December 29th, 2007 at 12:08 pm)

    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.

  20. Laurence Billing (December 29th, 2007 at 3:48 pm)

    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

  21. Jennifer Valencia (December 29th, 2007 at 3:56 pm)

    Quite interesting…always wondered how this MLM thing came about. Thanks for the article! :)

  22. Marcelle Lefebvre (December 29th, 2007 at 7:54 pm)

    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.

  23. DR. BOB P. UTAH (December 30th, 2007 at 11:47 am)

    Very interesting & very informative and actually “fun” to learn about the origins of our industry.

  24. Kon Hofstetter, Sydney (December 30th, 2007 at 2:07 pm)

    Always love to know the background. This is illuminating. Thanks.

  25. Joseph Quinn (December 30th, 2007 at 3:47 pm)

    I would be interested in later history as well. This was very informative. Thank you.

  26. Gary Robbins (January 1st, 2008 at 6:13 pm)

    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.

  27. Valencia Burton (January 2nd, 2008 at 6:17 pm)

    This was so fun to read! Thank you Tim for making all this information at hand for all of us!

  28. Gavin Chapman (January 3rd, 2008 at 5:48 am)

    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.

  29. Shirley K., California (January 3rd, 2008 at 7:13 pm)

    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.

  30. Doyce D Hughes (January 10th, 2008 at 3:56 pm)

    Very infomative reading.
    Thank you for the brief history.

  31. JIMMY PHILIPPINES (January 21st, 2008 at 10:32 pm)

    I am very emotional reading this article. I now found the encyclopedia of mlm for my prospects and members.

  32. J. Ayre (February 24th, 2008 at 8:59 am)

    Encouraging!

  33. Helen (March 19th, 2008 at 1:46 pm)

    very interest bit of history

  34. Nadiminti (March 22nd, 2008 at 10:01 pm)

    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.

  35. Nadiminti (March 22nd, 2008 at 10:11 pm)

    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.

  36. Rami Abu Eideh (April 9th, 2008 at 6:09 am)

    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 .

  37. Obayed Ullah (May 18th, 2008 at 3:00 am)

    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.

  38. Patty Lutes (June 27th, 2008 at 4:20 pm)

    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.

  39. Efeosa Idemudia (July 3rd, 2008 at 12:45 pm)

    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.

  40. Balagopal (July 15th, 2008 at 3:20 pm)

    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!

  41. GAURAV CHAUDAHRY INDIA (July 22nd, 2008 at 12:30 am)

    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.

  42. Bob Dignard-Fung (September 17th, 2008 at 7:00 pm)

    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

  43. jacques wynand (September 28th, 2008 at 6:52 am)

    top class,firstclass info.
    thank you very much.
    jacques
    south-africa ,mosselbay,capetown

  44. Pal (November 5th, 2008 at 5:37 am)

    good things

  45. Tanya (May 31st, 2009 at 7:06 am)

    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!

  46. Rejon (May 31st, 2009 at 10:30 pm)

    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.

  47. Shenna (June 15th, 2009 at 6:44 am)

    Now this is good stuff!!!! Just more proof that our business model is really something to be proud of!!! Thank you Tim!!!

  48. Jim (July 8th, 2009 at 5:03 pm)

    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.

  49. Maria Eugenia, Miami-USA (August 29th, 2009 at 5:39 am)

    excellent work, congratulations tim.

  50. Lym Relampagos Ongoy (October 4th, 2009 at 10:42 pm)

    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.

  51. Simon Koh Liang Meng (November 17th, 2009 at 7:53 pm)

    I liked the MLM History part where everyone like me in direct selling must know it to understand its importance.

    Thanks again Tim

  52. harsh dullar (December 4th, 2009 at 3:24 am)

    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

  53. Cathy (January 4th, 2010 at 12:27 am)

    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.

  54. Rajithkummar (March 4th, 2010 at 5:59 am)

    Dear Mr.Tim,
    Your work is very useful to millions of people.
    Thanking you
    Rajithkummar, India

  55. Mohammed Tipu Sultan (March 16th, 2010 at 10:37 am)

    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

  56. arjun prasain (June 6th, 2010 at 6:01 pm)

    i am growing by using this, it will great helpfull to the user n can change their life.

  57. Raymond Richard (June 11th, 2010 at 9:01 pm)

    This was a good read I will continue to read your information.

  58. malik sultan awan (June 29th, 2010 at 10:46 pm)

    its amazing and great work

  59. Dilip (August 23rd, 2010 at 3:41 pm)

    In the 20th. century it is the most effective business no doubt but most of the countries have no controlling rules and regulations those may make it dangerous for the public. So I think national government should think about it for the safety of public.

  60. Abu Naser Mohd. Helal (September 10th, 2010 at 11:36 am)

    Thank you for providing the real history of MLM. It will clear the false ideas about the history of MLM in many people. We are spreading this history to our distributors through training/seminar in Bangladesh.
    Thanks a lot.

  61. Bett (September 18th, 2010 at 12:35 pm)

    Well done history of network marketing!!!
    Certainly Mr. Maddof reminded us recently that there are still “Ponzi schemes” around.
    Homework is still required before you invest your time; the blessing is that relatively little money is required.

  62. shivamurthy (October 5th, 2010 at 8:09 am)

    hi dear friends mlm is the beautiful concept
    1.zero invest
    2.easy money
    3.team work
    4.passive income
    5.positive think
    thank full to god and my friend i got great opportunity take wise and strong opportunity thank you

  63. raja sarker (November 15th, 2010 at 5:37 pm)

    Network marketing is a new generation business. It built’s money,time,financial freedom,help people and make a beatyful world………..

  64. Nick Castrellon (November 16th, 2010 at 10:30 am)

    Thank you for the awesome ‘history’ lesson Tim. I am proud to be a part of the MLM community and especially proud to be one of my companies newest business owners. It truly is an amazing company. Even if I didn’t become partner with them, I would have have been a loyal customer because the quality of their products are the best around, especially the product line.

  65. CJ Stringer (March 8th, 2011 at 9:15 am)

    Excellent article Tim. Thanks for the history lesson that so many need to know about.

  66. Joanna Glade (April 28th, 2011 at 6:09 pm)

    A must read! Good to learn about the start of MLM’s and see how much it has changed from the early days. Today, it is called Relationship Marketing. If you don’t build the relationships and help those you put in the business, then you don’t grow and your business won’t build successfully.

    Thank you for this great information!

    To your success!
    Joanna :o)

  67. Nurul Rubel Khan (May 3rd, 2011 at 8:05 pm)

    Really I knew about mlm history. I am a networker & this infomations will help me to develop my business. Thanks those people who created the site.

  68. mohd (May 27th, 2011 at 5:12 am)

    thanks…very excellent work.. it very helpfull.

    (malaysia fans)

  69. Raqib SEU 14th (B)49 (June 22nd, 2011 at 10:59 am)

    MLM IS THE PROPER WAY TO BUILD A LIFE WHICH IS VERY ENJOYABLE SO,FRIENDS MAKE YOUR LIFE WITH MLM.

  70. Roy Campbell (June 23rd, 2011 at 9:27 am)

    great content I can’t wait to share it

  71. CINDY (July 23rd, 2011 at 7:37 pm)

    tHANKS

  72. bayazid (September 30th, 2011 at 3:23 am)

    i love MLM. i also love this person who creating mlm. thanks a lot to published mlm history

  73. alfred (October 23rd, 2011 at 4:47 am)

    i myself have been in this industry for almost 4 years..i have produced nearly 15,000 sales yet many of the facts were not knwn to me…tim you did a great job of helping me to unleash many facts n secrets of mlm..

  74. Rick Davila (December 10th, 2011 at 8:18 am)

    Thank you all for this wonderful feedback. Lived the MLM Culture and lived Sustain ably since 1974. I appreciate this information and thank you all for your comments.

  75. Ashiq,PSD,D2k (February 17th, 2012 at 7:29 am)

    I am so much glad to read this article.

  76. Liton dey (March 21st, 2012 at 5:54 am)

    Thanks for the mlm history.This information will help me to develop my dreams .Lot of thanks…..

  77. hominder (April 1st, 2012 at 7:38 am)

    thank u tim, leting me know about the mlm history n for this precious knowledge which i’ve got through this article.

  78. hominder (April 1st, 2012 at 7:43 am)

    thank u very much tim for all this knowledge about mlm industry. Thanks a lot.

  79. Md. Nazrul Islam (April 25th, 2012 at 10:46 am)

    MLM can change our life in a systematic way , which never back. it must create a man as a quality full, dream, advance thinking and helping mind person. so I like Network marketing.

  80. odebunmi shola (May 10th, 2012 at 12:34 am)

    its a great pleasure to be part of this amazing venture.. thanks and peace will always reign.

  81. L K Jayasinghe - Sri Lanka (May 16th, 2012 at 11:50 pm)

    Net work Marketing is a great sales system in the world.I think It is our Religion leaders methodical system.So, I respect that system and I commit to achieve my friend dreams any time. That about I am also win to my dreams and goals.

  82. Mike Phakathi (July 24th, 2012 at 3:04 am)

    As the financial science is about to take over the world im glad to see this informative history as a network marketing business MD (CFQ)

  83. Vinay kumar- Dhanbad, India (October 10th, 2012 at 7:06 am)

    Network marketing is a very useful for younguster… And it is way to finacially freedom in his life… So M.L.M is a great business.

  84. Vinay kumar- Dhanbad, India (October 10th, 2012 at 7:09 am)

    and I m lucky to being a part of the wonderful organisation……

  85. Dexter Estreon (January 12th, 2013 at 4:55 am)

    network marketing is a very nice business, thank for the origin of this kind of business because all walks of life of people can do this

  86. C S PRADEEP (January 17th, 2013 at 7:10 am)

    Really Good collection about mlm history - thanks for the people behind this effort - Have a nice day to all

  87. Josh (March 18th, 2013 at 4:37 am)

    So clear. In the Dominican Republic some journalist is calling Organo Gold a pyramid ,being so ignorant as a third-class professional. She should have read this article before any statement had being made. Great job for you here.

  88. Rhonda (March 12th, 2014 at 6:52 pm)

    Wow this is so educational,and diffidently equip a new network marketer toward success

Add your comments

Comment Policies