Network marketing negatively in the news

When people start with network marketing some of them will get negative response. People will talk about it like its something you should not do, like it’s a bad thing. This is a thing you might have noticed before. This brings up the question: why is there such a negative connotation when people hear the word network marketing and why is it that people connect it with illegal schemes? Let’s take a short look in the past.

The history of Network marketing in brief

The California Vitamins company, which in the 1940s was the first company to use the networking marketing business concept, was later renamed Nutralite. A few years later in 1956, a second company started using this concept: Shaklee. Two former Nutralite distributors, Rich de Vos and Jay van Andel, both of Dutch descent, founded the company The American Way better known as Amway.

Chain Letters  and Pyramid letters

Through practical experience, innovative and entrepreneurial people were convinced to start something new and different. The rapid success of this concept led to a huge growth, but this meant that people whose intentions were not as pure were also attracted to this concept. Some used the name Network Marketing as a cover for chain letters. These chain letters were sent en masse since the 1930s. According to USPS estimates around 1930, some 10 million chain letters were sent. The system, known as the pyramid letter, was later mentioned compared to network marketing companies, and used this legitimate way of operating as a cover for their illegal practices.

Negative connotation Since then, network marketing has had a negative connotation. The fact of the matter is that there are also pushy and intrusive salespeople within the industry who use the name to sell their scams and give the concept a bad name because of it.  

Check our brief history of network marketing for more details.