Like many other misinterpreted concepts, multi level marketing has seen opposition in the past because of a common bafflement of what it's all about. The multi level marketing history is fairly straight forward but things were misunderstood in the general public's mind when illegal pyramid and Ponzi scams were made around the same time.

In reality, multi level marketinging, also known as internet promotion or just MLM, is just another sales model that first appeared in the 1940's. A corporation named California Vitamins realized that all of its new sales representatives were buddies and family of the existing sales drive, the explanation being that they needed the production at wholesale cost. The management also identified that it was much easier to create a sales force of a lot of folk who each sold a touch of the production than it was to discover a few folk that could sell plenty of products.

So they answered to what was happening by coming up with a sales compensation hierarchy which inspired the sales staff to turn satisfied customers (frequently family and friends) into sales representatives. The corporation rewarded them for the sales made by their whole team of sales delegates. And the multi level marketing history was made!

In 1956, Dr. Forrest Shaklee united in the multi-level marketing concept to offer a bigger dispersion of the food supplements he had developed.

And then in 1959, former NutraLite distributors Rich DeVoss and Jay Van Andel initiated the Amway company as the North American Way of marketing products.

Everything was perfect till the concept got into some bad hands who started to miss-use it. Accept it or not, one of the first cases of this came in the form of chain letters. The letters promised good gain if you would send a cent or a buck to the individual at the bottom and many did just that. Though these letters actually started and were thankfully shut down before multi level selling was born, they later bred alike schemes that we all know as pyramid or Ponzi schemes. These prohibited activities involve paying members compensation for inducting other members. Nevertheless, no product or services is offered as it is by legal multilevel marketing service.

In the mid 1970's, Senator Walter Mondale declared pyramid and Ponzi schemes to be the state's number one consumer fraud. And that's's when it became rough for MLMs. In the mid 1970's, because they had no real clear understanding of what network marketing was all about, the federal Trade Commission began to target all internet marketing firms. In 1975, the FTC filed suit against Amway, on the grounds that the corporation was an illegal pyramid and that its refusal to sell its productions in retail stores made a restraint of trade.

Four years and millions of greenbacks later, Amway cleared its name. In 1979 the FTC eventually ruled that Amway was not a pyramid, that its revenue was gathered from the sale of its products, and the FTC recognized internet promotion as a legal distribution system.

After, the multi-level marketing history has come to incorporate thousands of legitimate MLM firms all around the planet.

Additional Resources:
Niche Blueprint
The History of MLM Revealed