Network Marketing is a growing industries throughout the world. However, when it first started, the trade industry was being misunderstood and it was finally revived in early 1980′s.

Abuses of exponential growth haunted network marketing for years and it is still misunderstood till today. One of the first abuses of the concept of exponential growth to generate income may have been the chain letter craze that swept the United States after World War 1. The letters promised great profit if you would send a dime or a dollar to the person at the bottom. The chain letters spread like wild fires as far as Europe. At one time, the US Postal Service estimated that 10 million letters were being mailed each day. Working together with the law enforcement agencies, the USPS battled the fraudulent schemes and the chain letter phenomenon began to subside in the early 1940s.

Unfortunately, this scam spawned schemes which came to be known as pyramids, where money was given for the right to involve others, as no valid product which was being purchased from the company. Again the law enforcement agencies acted quickly to clean up the abuses as it became the United States number one consumer fraud.

In mid 1970′s, with no clear understanding of what constituted a legitimate use of network marketing, the US Federal Trade Commission and state agencies across the nation turned their eyes to almost all network marketing companies. In 1975, the FTC filed suit against Amway, alleging that the company was an illegal pyramid and that its refusal to sell its products in retail stores constituted a restraint of trade. However, after spending 4 years and millions of dollars in legal fees to clear its name, in 1979, Amway was ruled out by FTC that the company was not a pyramid, and that its revenue was generated from the sale of its products.  After the incident, hence, the US Federal Trade Commission acknowledged network marketing as a legal and efficient distribution system. Network Marketing exploded in the next decade!

Today there are thousands of Network Marketing companies operating throughout the United States, Canada, Mexico, South America, the United Kingdom, Europe, Australia, New Zealand, Israel, Japan, Taiwan, Malaysia, etc. In Singapore alone, there are more than 100 companies dealing in direct selling and only a handful of them is an active members of the Direct Selling Association of Singapore.

Network Marketing is reported to be a billion dollars industry, internationally, made up of Fortune 500 and New York Stock Exchange (NYSE) listed companies.

Talk to you soon,

Jailani