Today, I want to talk about the evolution of network marketing. I’ll discuss how the industry has changed, improved and evolved since its inception. I’ll cover the good, the bad, the ugly, and also discuss where I see it headed in the future. Keep in mind this is just my opinion and we can agree to disagree.
The Evolution of Network Marketing
Phase I: 1950s to Early 1960s
When our industry first started in the 1950s, it was mostly door-to-door sales. Early day Amway, Avon, Watkins, and Shaklee reps frequently sold items door-to-door. This method was very popular and effective during the 1950s and 1960s. New distributors would canvas neighborhoods in their local community to find new customers.
During this phase, the primary strategy of reps was to sell products, not build a team. In other words, it was more about direct selling, not network marketing.
During this time-frame, there weren’t too many companies to choose from, probably less than twenty. The industry itself was still new and many people were skeptical of it.
Phase 2: 1960s to Late 1970s
Throughout the 1960s and early 1970s, several new MLM Companies joined the scene. More and more people learned about it. The focus was still door to door and in home parties, but the industry grew. MLM was by no means mainstream yet, but the public was becoming more aware of it.
Phase 3: 1979 to Mid 1989
Phase 3 was the momentum phase for network marketing. After the paramount 1979 FTC vs Amway case, the industry gained its legitimacy with the federal government. Thank you Amway!
It was during this time-frame that the industry started to gain massive growth. Millions of people joined the industry. Many of the big companies in our industry were formed during this time.
There still weren’t tons of MLM Companies to choose from, but more and more were popping up each year.
There was a nice transition during this time from in home parties and door to door selling to using catalogs. This is also when there became a big focus on the power of building a team of distributors, in addition to just finding customers.
Phase 4: 1989 to 1999
Phase 4 is when you really began to start seeing the “big money” that was possible in our industry. People from many of the top companies started earning in excess of six and seven figures per year in their business. Businesses were built via home parties, newspaper ads, personal recruiting, etc. Systems were developed and find tuned and the general public started to learn about the industry.
Phase 5: 2000 to Present Day
This phase starts in 1999 with the internet. The internet has really changed our industry, for better and worse. Here are some trends during phase 5:
- Hundreds of new companies launched each year (increased competition)
- Anyone with an internet connection could build their business online (level playing field)
- Social media and smart phones gave people a portable business (convenience)
- Technology such as webinars, conference calls and online meetings allowed people to work smart (convenience)
- Anyone can access information online about our industry, whether the info is true or false (information)
- There are now thousands of different income opportunities your are competing against, and not just MLM Companies (increased competition)
Phase 6: The Future
While our industry has its share of critics, I believe the future looks bright. I believe the next phase of network marketing will last another 20 to 30 years minimum. This phase will be a shift from just talking about the business to having a strong product focus. Here’s what I think you can expect.
- To stay FTC Compliant, companies will need to focus on having a rock solid customer to distributor ratio
- Companies must adjust prices of their products to compete with Amazon and online sellers
- The companies that can offer great products at fair prices, and have a great way of rewarding customers, will be the companies that grow the biggest (just my opinion)
- Distributors will need to be rewarded better for customer acquisition and less for distributor acquisition
- Companies will need to develop unique patented products that are different from the thousands of choices in the marketplace
As you can see, our industry has really evolved during the past fifty to sixty years. I’m not sure how it will change in the future, but I do know one thing. This will always people a people business. Even if there are “different trends” and “ways to build a business” you still need to focus on building long-term friendships and relationships with people if you want a sustaining, long-term business.
What are your thoughts? Where do you see the industry in the next five, ten or twenty years? Leave a comment and let us know. I look forward to hearing from you.