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Inside Multi-Level Marketing: A Brief History of MLM

Aug 17, 2007
Throughout, fairly recent history, about sixty years or so, multi-level marketing has been a prominent fixture in the business world. It all began way back in the middle 1900's. Companies realized that their sales staff was generally made up of family members and friends of other sales members. The appeal was the fact that they could get products at wholesale prices, much cheaper than buying from a sales representative; therefore, they became members of the sales staff themselves.

Then companies began to realize they were easily finding several sales members that could sell a few products. Whereas, finding a top sales person who could sell in large amounts was much harder. Therefore, after analyzing these aspects they created a structure that combined the two aspects into one, along with compensation for sales, creating the very first Multi-Level Marketing company. With this new structure, they encouraged current sales staff to recruit new sales people. In the beginning, this was typically their friends and family members. Later, the practice was extended to any satisfied customer, giving them the equal right to make sales, buy products at wholesale costs, and recruit new sales members.

With this new structure, people were becoming sales members, selling products, and recruiting new sales member to make money. Groups were rewarded for their sales as a whole; this is where the downline aspect came into play many years later.

Everything has its good and bad

Of course, as with any new concept, especially one such as Multi-Level marketing, there were their downfalls, setbacks, and major image tarnishing, as other people sought ways to implement the idea into their own lives. This created the conception of fraudulent Multi-Level Marketing schemes. The very first known to the world, was in the form of a chain letter. This began shortly after World War 1 ended, where a chain letter sent across the nation, ask the recipient to send a specific amount of money to the person on the short list of names at the bottom of the letter. This amount was anywhere between 10 cents to 1 dollar. The chain letter led the way to what is known as pyramid schemes. This scheme occurs when there are no real services or products are offered for sale by the company.

Today's Multi-Level Marketing

Today, Multi-Level Marketing is a thriving business that extends all across the globe from the United States to Japan and everywhere in between. The international Multi-Level Marketing industry is a 100 Billion Dollar industry that is showing no signs of slowing down. Multi-Level Marketing can even been seen in many of today's top company such as Amway, Discovery Toys, AT&T, MCI, Sprint, Colgate, Gillette, Melaleuca, Mary Kay, Avon, and even Encyclopedia Britannica, just to name a few of the most recognizable names in the Multi-Level Marketing Industry.

There are a great many different products available for sale in multi-level marketing such as household cleaners, vacuum cleaners, nutrition drinks, diet drinks, vitamins, and cosmetics. In fact, these industries were invented thanks to multi-level marketing. Both the company and the representative can benefit from this technique.

The Company

The company benefits because it is not required to pay the sales representative until the sales of services or products have been made. This means they save money all the way around and run their company in a more efficient manner. For example, the costs of distribution are decreased because the product is not sent out until paid for. Furthermore, millions of dollars are saved in advertisements as well. Then you think even further in terms of costs and the company is saving money by not having to payroll based on hourly pay, in general no benefits are offered, and office, travel, and utility costs are dramatically reduced. It creates an efficient way to run a business all the way around.

The Sales Representative

The sales representative benefits in many ways as well. They have the potential to make as much or as little money as they want. Essentially, multi-level marketing is a work at home business. This leaves the sales representative the ability to control all aspects of their own home-based business. They can set their own hours, work as little or as much as they would like. There is no boss hovering over your every move. Many people like this idea because it leaves more time to spend with their family and they can work in their pajamas in the comfort of their own home, if they so desire.

Wrap it up

In conclusion, there are many reasons you should be considering a multi-level marketing company, just a few are outlined within this article. If you are looking to join a multi-level marketing company, do your research, talk to other friends and family members, and understand all aspects before deciding on any one company.
About the Author
Scott Fromherz owns and operates multiple Internet sites. Visit http://www.downlineautopilot.ws and http://mlm-company.blogspot.com for more mlm information.
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