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What is MLM? History

 

Based on materials from lectures and seminars on network marketing.

Some attributed the emergence of network marketing times of ancient Egypt, one period of the reign of Genghis Khan. How reliable events and historical facts, it is difficult to judge.

In today's world MLM originated in the U.S. and gradually spread throughout the world. It all started about 60 years ago in America, when Carl Rehnborg invented network marketing - a business system designed to ensure that any person could if they wish to become an entrepreneur. Frequency of forming MLM lasted 40 difficult years, until finally, he did not become what it is today.

The first company which started to work on strategies for MLM, was called "Vitamins California (later the company became known as« Nutrilite »). That was in 1940. While this company was the only one that used the program sales with compensation at several levels, from whence the name «Multilevel Marketing» (mlm) or abbreviated MLM. In the future, for similar programs began using the term "network marketing".

Company Vitamins California gave its representatives the right to sponsor new people to participate in sales that have been in these people. Distributors (Independent Distributors, from the English. Distribution - distribution) companies to engage and managed new employees. Every employee had the opportunity to build their own sales organizations. These organizations receive from the company's goods and payments for sales made by them.

A few years later two of the most successful distributors in the sale of the company's Rich De Voz and Jay Van Andel, realized the enormous possibilities inherent in the concept of MLM. In 1959, the two men have organized their own company under the name «Amway» («Amway» - «The American Way"). This was the birth of a legend.

In 1950-1970-ies the Network Marketing industry has grown and found their "pioneers" who had pioneered the emerging industry and strengthened the position of network marketing as a viable channel of distribution of products. Among the first leaders of the industry were Shaklee (1956), Amway (1959), Mary Kay (1962), National Safety Associates (1970).

In the period from 1959 to 1975, the MLM industry has developed slowly enough. Only about 30 firms could be called network marketing companies. But the very idea of free enterprise to agitate the minds of many, and not always honest and fair, people.

Entrepreneurs rushed to try a new form of distribution, and some of them crossing over the ethical limits. A modified form of marketing on several levels have been converted into simple scheme in which distributors are rewarded only for what they have managed to attract to the company of others just signing the contract, not legalized sale of products. Some firms have begun to extort large distributors pay entrance fees for dubious promises. Others just walked by fraud: unexpected collected entrance fees, and just as suddenly disappeared, the data scheme known as the "pyramid", as they are often a prize of those who first joined the organization, to the detriment of those who came to her later.

The beginning of this period associated with the adoption of the Federal Trade Commission, the U.S. law on pyramid schemes. It was the first attack against the new government and industry began a heroic struggle for the right MLM to exist.
Legitimate MLM, or network marketing - this is actually the current system of distribution and sales, in which independent parties to a contract earn commissions from the sale of products or services that it transmits producer. The only way to make money in this business - selling products. Interest is paid only for a set of people (distributors) - is a fraud.

Between 1979 and 1983 in the MLM industry has come more than five million men and women across America. There were hundreds of companies who have used this business strategy. We had no experience and capital, but it was a dream, it was a strong desire, energy, creativity and unwavering belief in the possibility to realize this dream. MLM became a school of social entrepreneurship.

In the early 90-ies of network marketing has appeared in our country, and today it is experiencing a period of rapid growth. The openness of the system, its readiness to take all and give them a chance to do their job. Millions of men and women representing the company in which they work, perform their duties with honor and be tactful.

Firms working on a method of network marketing, find buyers of its products among friends or through their brokers. They are attracted to cooperate only interested people and train them to conduct business. From the people who came to work in such firms, we need to know products and adherence to ethical standards. To those who are not ready to comply with these requirements, refuse to work.

Today, along with the growing needs of people in improving living standards, increasing the need for human contact, in spiritual growth, driven by a general culture of rights and business culture in particular. In connection with this new way seeks to work with distributors: there is a need to teach people to lead healthy lives, to remove stereotypes of behavior and to solve personal problems.

Knowledge and human ability to become a true wealth, and money invested in people - the most effective investments. This business is based on the development of unlimited human creativity.

Network marketing is shaping the future world in which people will no longer depend on the bosses and bureaucrats, and will be masters of their own destiny.

Today this system is a socio-economic phenomenon, which in the near future, write more than one candidate and doctoral dissertations.



 

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