How did network marketing come into being?
HOW IT ALL BEGAN
How did network marketing come into being? This is a question that sales partners are often asked. Not everyone knows the answer! This not infrequently leads to misunderstandings about this profession, which arose completely organically out of necessity. Already hundreds of years ago!
In traditional distribution or trading of products, manufacturers sell their products to wholesalers or retailers, who then resell them to their end customers in stores or on the Internet.
In direct sales, on the other hand, manufacturers sell their products directly to end customers, thereby saving the detours and costs of intermediaries.
Hence the terms direct sales or direct distribution.
One variant of direct sales is sales through representatives, as operated in QN Europe. In this form of distribution, manufacturers sell their products directly to end customers through representatives.
The representatives are paid a performance-related commission on their sales revenue.
In their basic form, these forms of distribution have existed since the first merchants and traders set out into the world to offer their goods to traders and customers.
Since they were always traveling, they commissioned local representatives to continue distributing their goods.
Another origin of direct sales through representatives was the triumph of technology in the early 20th century: the products of the time were often novel and required explanation.
This fact prompted a company from Germany in the 1920s to sell vacuum cleaners directly to customers through representatives.
In the USA, economic developments promoted the profession of representative.
In the 1930s, there was an economic crisis there.
In order to stimulate the economy, research was conducted into methods that would increase sales.
This led to the realization that recommendations played an important role in purchasing decisions.
Customers were more likely to buy products recommended and explained to them by someone they knew than to buy unknown products from strangers.
Consequently, manufacturers began to train their representatives intensively.
They were expected to have excellent product knowledge, to use the products themselves and, if possible, to identify with them so that they could then sell them directly to their acquaintances and environment via recommendations.
However, the origin of today’s network marketing lay in the success of a single company.
The California Vitamin Company, founded in 1934, distributed dietary supplements and was so successful at the time that they did not have enough salespeople to handle the high demand.
An attempt was made to solve the problem by encouraging salespeople to recruit additional sales partners among their friends and acquaintances.
As a reward, the salespeople received a commission on the sales of the sales partners they recruited. This principle was a great success, so more and more manufacturers adopted this form of distribution.
Today, thanks to its steady growth, network marketing is a billion-dollar market: the volume of sales generated worldwide in 2017 was approximately USD 190 billion, and more than 100 million representatives or sales partners are active in network marketing worldwide.
The industry owes this impressive volume to two characteristics, among others: firstly, comparatively low entry barriers combined with attractive earnings opportunities that can be achieved promptly. Secondly, Network Marketing allows people all over the world to take control of their lives by building their own business in a simple and straightforward way by duplicating a proven system. This is one reason why millions of people choose this profession every year.
Maybe the profession of a networker is just right for you? Find out! We would be happy to invite you for a personal interview!