Network marketing or MLM companies entered India in late 1960s and early 1970s. Mostly, they offered small savings schemes with large returns. Foremost among them were chit funds. Other schemes would promise anything from stainless steel utensils to saris and jewelry as rewards for members who enroll more people. Sadly, these indigenous schemes became extinct within a few months. Inability to sustain the schemes was the main reason, as people balked at these offerings. Indians were not as affluent then and hence, reluctant to invest in such schemes.
Interestingly, network marketing is not a new concept worldwide.
● The accolade of the world’s first network marketing firm goes to Avon, which began its business in New York in 1886 with fragrances and beauty products for women. Despite its impressive history spanning over 130 years, Avon continues to sell its products through network marketing. Today, this firm has annual turnover exceeding US$ 10 billion. Avon is also the world’s second largest network marketing company.
● In 1922, Kleeneze, a UK based firm began its humble business of garden, home and body care products. This firm also operates till date with network marketing as its backbone.
● The third oldest network marketing company is Betterware that sells household and beauty products.
Other notables in the network marketing industry include:
● Wachter’s Organic Sea Products (founded in 1932)
● Tupperware (1946)
● Cutco Cutlery (1949)
● Jewels By Park Lane (1955)
● Shaklee Corporation (1956)
● Golden Neo Life Diamite, famous as GNLD (1958)
● Amway (1959).
Further, these companies are flourishing till date. Clearly, this indicates that network marketing is a success. Millions of people worldwide have become rich fast selling products of these firms. Notably, several companies also lost business and had to close doors during this era. However, their failure was due to various reasons ranging from World War-I from 1914, Great Depression of 1929 and World War-II from 1939. Mainly, economic uncertainty during these intensely difficult times this planet has seen, led to failure of many network marketing companies.
A unique system at work
Understandably, network marketing is a unique business model in its own right. Here, the company does not open its retail showrooms or sell its stuff through other stores.
Instead, people who wish to capitalize and make money on a company’s good reputation, buy and sell its products for a small profit. Usually, these products are sold by network marketers within their personal clique.
