MLM History

Before the turn of the millennium

MLM is no way an invention of the 21st Century. It changes, alters and transforms itself continuously. Once upon a time there was only the direct sale, the original form of trade in which the farmer sold his milk directly to the villagers or even more before that time when meat was traded for a club. For various civilizations, such as in ancient China, it has been proven that rambling tradesmen maintained trade relations and offered their goods to the buyer at his home. The reason for the migration of the tradesmen laid predominantly in the overproduction of providers, in addition to that a sparse population in which they were located.

Until the industrial revolution in 1840 tradesman replaced and took over the function of the commercial retail or supplemented these and served as a communications medium. But more and more people moved to the cities and the industrialization and division of labor was unstoppable. When there was a better infrastructure and new ways of communication opened up, the itinerant trade was increasingly repressed, by such things as department stores and retailers.

As part of the industrial revolution many new products were invented and had to be sold to the consumers. But these new products were in great need of explanation. Through this trend the idea of direct sales was revived. Because through direct sales the companies could get in touch with their customers personally and had the opportunity to explain their products like they needed to. In those days many companies used direct sales to sell products like vacuum cleaners or washing machines.

The birth of MLM

The first direct seller that made the breakthrough was the “California Perfume Company” established in 1886. California Perfume Company was 1939 renamed as “Avon Products” and is still at the top of the MLM industry. Among other things its success can be described as “good timing”. Avon not only had the right sense concerning products and lifestyle from the 50ies to the 70ies, but they were ahead of their time regarding the entry of women into commercial life.

After the Second World War in the 1940ies in the United States the first company was established, which was exclusively based on Multi-Level Marketing. It was called “California Vitamin Company” and was founded by Carl Rehnborg. The products primarily have been health supplements and were highly in demand at that time. To meet this demand Rehnborg recruited independent distributors to increase the number of sales people.

The role of women in MLM

Nevertheless was it important for MLM companies to involve or also recruit men, for example the husbands, too. In the beginning of MLM women should portray the picture of docile and humble wife. The consent of the husband was appreciated before the woman started her career. This method is mainly preferred by companies that like to recruit couples. This is getting clear, if you take a look at the division of work in companies like Amway or Shaklee. For example the man presents the marketing plan and the woman’s area of responsibility includes among other things the sale and the bookkeeping.

Conclusion: MLM allows combining work and family life and because of this fact it is very attractive to women in a world in which the opposite happens to often. Usually those two aspects of life are separated and women are disadvantaged. MLM created the possibility that also women could reach economic independence and still hadn’t to give up their family.

MLM goes online

At the end of the 90ies the representative’s area of activity shifted because of the implementation of online-shops. As a result from then on electronic order processes were available. The personal treatment of orders continuously lost importance because of the internet. The former area of activity was covered by the online shops and the customers were able to make orders themselves. Today representatives of companies like Quixtar (belongs to Amway) and Avon appear as contact person, personal adviser or even don’t have anything to do with the order process.

The activities of the representatives did indeed often shift in the last several years, but the core activity of building a relationship always stays the same, because a website will never replace a personal conversation.