Have you heard of MLM or network marketing? MLM, or network marketing, can be a powerful home based business vehicle, but it is not generally well understood. It is fraught with misconception and an often tainted reputation on the part of the general public.
If you have heard of MLM or network marketing before, do you think of it in positive terms or do you have a negative perception of the industry? When you hear someone such as Donald Trump, or Robert Kiyosaki, or Jim Rohn suggest network marketing is a terrific home based business vehicle for the average person, what reaction do you have? Which side of the fence are you on and more importantly, why?
If you already participate in network marketing, do you sometimes feel embarrassed to admit it? What is it about your beliefs around network marketing that lead you to have these feelings?
In this article, you’re going to get the straight goods about MLM and network marketing as an industry, how it evolved, and where some of the misconceptions came from. That will allow you to put the feelings or perceptions you have about the network marketing industry into some context, from which you can assess whether or not your feelings and perceptions are valid
Modern MLM and Network Marketing
MLM and network marketing is huge. It is a +$100 billion dollar per year industry which offers an accessible way for the average person to launch a legitimate business with the potential of generating very substantial income. It affords you the opportunity to launch a business on a part-time basis, and grow that into a full-time (or more) income. And it requires the least amount of start-up capital and ongoing operating expense of virtually any legitimate business model.
Paul Zane Pilzer, a world renowned economist and college professor, goes so far as to predict that over 10 million new millionaires will be created through network marketing over the next 10 years.
If this is true, why on earth would you feel ashamed or embarrassed to be part of this industry?
Well, as I’ve already hinted, there’s a lot of history behind network marketing.
The Early History Of Network Marketing
Network Marketing as a means of product distribution – which is really all that it is – has been around literally forever.
You can go back through history and the establishment of trade routes and find examples of traders who distributed goods, food, and fur, face-to-face, on behalf of various backers. For example, the Voyageurs established fur trading routes and posts on behalf of the Hudson Bay Company. The Hudson Bay Company itself relied upon the influence of Prince Rupert, who was the cousin of King Charles II, to acquire the Royal Charter which, in May, 1670 granted the lands of the Hudson Bay watershed to “the Governor and Company of Adventurers of England trading into Hudson Bay.”
In New England, in the mid 1700’s, began the phenomenon of the Yankee Peddler, in which peddlers would travel in their cart home to home throughout the countryside, selling their wares.
From there evolved the concept of the door-to-door salesman. The Watkins Company was launched in 1868, selling a popular liniment. The late 1800s saw the spawning of new companies employing door-to-door salesmen to distribute bibles, books, spices, remedies, perfumes, tonics and the like. The California Perfume Company, which later became better known as Avon, was founded in the late 1800s.
The Fuller Brush Company debuted in the early 1900s and it was Alfred Fuller who is credited with transforming door-to-door direct selling into something different. Rather than positioning himself as a salesman who sold brushes and focusing on the features of the brushes, he instead focused his attention on selling the benefits of his brushes to the consumers.
The early 1900’s also saw the emergence of vacuum cleaner and encyclopedia companies such as Electrolux, World Book and Britannica.
The term “network marketing” specifically is 20th century creation.
It is out of this trend that the term “belly to belly” marketing – or warm market as you may better recognize it – was coined.
A company named California Vitamins came to the realization that many of their new sales recruits were in fact friends and family of their existing sales force. That led the company to recognize it was easier to build a sales force with a lot of people who sell a small amount of product, than it was to find a small number of top sellers who would move mountains of product.