Who originated the term 'Multi Level Marketing' and when?

My searches suggest that Jay Van Andel & Richard Devos founded Amway
in 1959 but were they the first to hit the jackpot and was the term
'MLM' used then, later or before?

Dear Bryan, 

Here is my official answer.

Multi-level marketing (MLM) is a marketing scheme that rewards
consumer resellers for the sale of the product and for the recruitment
of other resellers for the product. Typically resellers are paid a
commission on what they directly sell, and a smaller commission on
their recruits' sales (and their recruits' recruits' sales etc.) This
is the multi-level aspect of the term. Amway and Avon are the more
recognized marketers that use this sales method.
University of Delaware Website
http://www.udel.edu/alex/dictionary.html


“MLM's have been around for a while. Even before Amway, there were
companies that paid distributors for developing new distributors.
Amway itself was an outgrowth of Nutrilite, another MLM Company,
developing in response to that company's wish to place its products in
stores and expand its market beyond its sales force.”
http://members.tripod.com/~hunza1/amway/amwhy.html
 

The article by Stephen Barrett, M.D., “The Origin of Multilevel
Marketing” explains the beginnings of this concept. Carl Rehnborg
would be the originator of this idea. Here are a few short excerpts:

“The roots of multilevel marketing are intertwined with those of the
Amway Corporation and its Nutrilite product line. The Nutrilite
concept is said to have originated about during the early 1930s in the
mind of Carl Rehnborg, an American businessman who lived in China from
1917 to 1927. According to Amway publications, this gave Rehnborg
"ample opportunity to observe at close range the effects of inadequate
diet." He also "became familiar with the nutritional literature of his
day." Concluding that a balanced diet was needed for proper bodily
function, he began to envision a dietary supplement which could
provide people with important nutrients regardless of their eating
habits. After seven years of "experimentation," Rehnborg produced food
supplements which he gave to his friends to try. According to his son,
Sam, who became Nutrilite's president and chief operating officer:

After a certain length of time, Dad would visit his friends to see
what results had been obtained. More often than not, he would find the
products sitting on the back shelves, unused and forgotten. It had
cost them nothing and was therefore, to them, worth nothing . . . It
was at this point that he rediscovered a basic principle-that the
answer was merely to charge something for the product. When he did,
the friends, having paid for the product, ate it, liked it, and
further, wanted their friends to have it also. When they asked my dad
to sell the product to their friends, he said, "You sell it to them
and I'll pay you a commission."

Amway's founders, Rich DeVos and Jay Van Andel, were friends who
became Nutrilite distributors after high school graduation. They were
extremely successful and built a sales organization with over 2,000
distributors. Fearing that Nutrilite Products might collapse, they
formed a new company, the American Way Association, later renamed
Amway.”
Source: http://www.mlmwatch.org/01General/mlmstart.html

Search Criteria:

"the term multi level marketing * "
the origin of the term multi level marketing
invented multi level marketing
originated the term "multi level marketing"
history "multi level marketing"
P.F.E. Albee

Best Regards,

Bobbie7-ga

Many thanks, Bobbie!

Hello Bryan,

Although I am very flattered that you chose me to answer your
question, I wasn’t able to locate the origin of the “term” multi-level
marketing but I did find out who used the multi-level marketing
concept before Amway.

Multi-level marketing (MLM) is a marketing scheme that rewards
consumer resellers for the sale of the product and for the recruitment
of other resellers for the product. Typically resellers are paid a
commission on what they directly sell, and a smaller commission on
their recruits' sales (and their recruits' recruits' sales etc.) This
is the multi-level aspect of the term. Amway and Avon are the more
recognized marketers that use this sales method.
University of Delaware Website
http://www.udel.edu/alex/dictionary.html


“MLM's have been around for a while. Even before Amway, there were
companies that paid distributors for developing new distributors.
Amway itself was an outgrowth of Nutrilite, another MLM Company,
developing in response to that company's wish to place its products in
stores and expand its market beyond its sales force.”
http://members.tripod.com/~hunza1/amway/amwhy.html
 

The article by Stephen Barrett, M.D., “The Origin of Multilevel
Marketing” explains the beginnings of this concept. Carl Rehnborg
would be the originator of this idea. Here are a few short excerpts:

“The roots of multilevel marketing are intertwined with those of the
Amway Corporation and its Nutrilite product line. The Nutrilite
concept is said to have originated about during the early 1930s in the
mind of Carl Rehnborg, an American businessman who lived in China from
1917 to 1927. According to Amway publications, this gave Rehnborg
"ample opportunity to observe at close range the effects of inadequate
diet." He also "became familiar with the nutritional literature of his
day." Concluding that a balanced diet was needed for proper bodily
function, he began to envision a dietary supplement which could
provide people with important nutrients regardless of their eating
habits.After seven years of "experimentation," Rehnborg produced food
supplements which he gave to his friends to try. According to his son,
Sam, who became Nutrilite's president and chief operating officer:

After a certain length of time, Dad would visit his friends to see
what results had been obtained. More often than not, he would find the
products sitting on the back shelves, unused and forgotten. It had
cost them nothing and was therefore, to them, worth nothing . . . It
was at this point that he rediscovered a basic principle-that the
answer was merely to charge something for the product. When he did,
the friends, having paid for the product, ate it, liked it, and
further, wanted their friends to have it also. When they asked my dad
to sell the product to their friends, he said, "You sell it to them
and I'll pay you a commission."

Amway's founders, Rich DeVos and Jay Van Andel, were friends who
became Nutrilite distributors after high school graduation. They were
extremely successful and built a sales organization with over 2,000
distributors. Fearing that Nutrilite Products might collapse, they
formed a new company, the American Way Association, later renamed
Amway.”
Source: http://www.mlmwatch.org/01General/mlmstart.html

Search Criteria:

"the term multi level marketing * "
the origin of the term multi level marketing
invented multi level marketing
originated the term "multi level marketing"
history "multi level marketing"
P.F.E. Albee

If this information satisfies you, I will post it as an official
answer, and if not, just close this question and repost it for another
researcher to answer.

Sincerely,

--Bobbie7-ga

Hi, Bobbie

Good to hear from you again!

I feel better now ... Please post your Comment as an Answer to collect
5 stars & your well-earned dosh.

Kindest regards

Bryan