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Wednesday, December 22, 2010

The Recession Proof Business That's the Last Bastion of Free Enterprise by Janet Callaway

Strong statement for a powerful industry—the network marketing/direct selling industry. In this economy, it is more important than ever to understand the strength of this industry and its history. When you do, you will appreciate why world-renowned economist Paul Zane Pilzer, a highly successful social entrepreneur and author of nine best selling books, believes this industry is unstoppable.

He sees this industry as recession proof vs. what we see happening in the auto, real estate and most other industries these days.

Statistics show the network marketing/direct selling industry grew 90 percent in the last 10 years and is expected to double in the next ten years. Specifically, from years 2006-2016 it is expected to grow from 30 billion dollars in the United States and $100 billion dollars internationally to $60 billion and $200 billion respectively.

In his book The Next Millionaires Professor Pilzer goes on to say that “ten million new millionaires will be created between 2006-2016 . . . and that you can become one of them if you are in direct selling, technology, home based business, product distribution, or an emerging trillion-dollar industry like wellness.”

With those conclusions it is no wonder financial and business experts alike speak so highly of this industry. Rich Dad Poor Dad author Robert Kiyosaki wrote a couple of books recommending the industry while Billionaires Donald Trump and Sir Richard Branson of the Virgin Empire each own companies within it. Warren Buffet, arguably the most successful investor in the world, owns 3 companies in this industry. In fact, when he purchased Pampered Chef back in 2002 he said he considered it to be one of the best investments he ever made. That, from a man who definitely knows all about investments. is compelling.

They believe in the Now of this industry because of their knowledge and experience. Let's go back in time so that I can share its history with you.

Once upon a time, at the beginning of the 20th century, a man named Henry Heinz started his own company. Using vegetables, he made such products and ketchup and pickles to sell to consumers who were unable to grow their own vegetables. To spread the word of his products, he organized a sales force of some 400 people.

Asa Candler bought the formula for Coca Cola from pharmacist John Pemberton back in 1886 then formed a sales force to sell the syrup to restaurants.

Back in 1885 David McConnell created a sales force of some 10,000 reps for his California Perfume Company. In 1939 the name of the company changed to Avon Products. A high percentage of people have heard of Avon yet few realize it has been around 125 years and does in excess of $10 Billion a year in sales.

As his sales force developed, Carl Rehnborg, founder of California Vitamins noticed a couple of interesting things. It seemed that most of his new reps were friends of existing reps and they wanted to be able to buy the products at wholesale. Thus the term “friendship marketing” was born. From a financial standpoint his other discovery was significant. He realized that it was far more profitable for him to have a sales force of many people who each sold a small amount rather than having to rely on a few super stars.

What Carl did next was the start of network marketing as we know it today. First, he combined his two discoveries; then he created a compensation plan which encouraged his reps to enlist friends and family members as reps. California Vitamins changed its name to the NutraLite Food Supplement Corporation.

Over the next several decades numerous other companies that are still household names, opened their doors. Those companies are still going strong, each with sales in the multiple billions of dollars a year. Here are a few of those familiar names:

1945—Tupperware founded by Earl Tupper and Brownie Wise

1956—Jafra Cosmetics founded by Jan and Frank Day

1963--Mary Kay Cosmetics founded by Mary Kay Ash

1959—Amway, founded by Jay Van Andel and Richard De Vos, two high school friends who joined NurtaLite after the war and subsequently took it over in 1972.

As you can see, the network marketing/direct selling industry is long lived. The products introduced by companies in this industry over the years are well recognized round the world and often create new categories. For instance, did you realize that aloe vera was first introduced to us back in 1978 by a network marketing company based in Arizona? You probably have multiple products in your home with aloe vera in them and yet, even with all the other companies marketing aloe vera, that company still does multiple billions of dollars a year and commands a huge percentage of the market.

As you can see, this is an industry that is here to stay. Its longevity speaks to its ability not only to survive but to thrive in all economies; the experts mentioned above speak to its profitability and the millions of people involved speak to its possibilities delivered. A solid company within this industry gives you the vehicle to drive into the future you want for you and your family.

Do you understand why experts and those of involved in the industry are so passionate about it? Do you believe it can make the difference in your life?


  1. Great information and nicely written blog. I knew I chose the right industry! Kudos! How come your not on my team?
    John Laudenslager

  2. John, we are on the same team--just with different companies. We are both educating people on the life that could be theirs if they join us in this fantastic industry.