The company prospered until the late 1950s, when it began to suffer from a number of management problems. These had a deleterious effect on the businesses of all their distributors and, as the decade came to an end, distributors who had built up the largest organizations over ten years were becoming increasingly concerned about product supplies and their future.
They were also anxious about the future of the people they had brought into the business, to whom they had promised secure and a profitable opportunity. In 1959 two men split from the company, with their group of distributors, and planned the birth of a new company. They began to manufacture their own goods and intended to give their people the security and profitability that had been hoped for with Nutrilite.
They took the opportunity to plan carefully a detailed commission structurewhich reward their people in exact proportion to the profits their efforts produced for the company.
Richard De Vos and Jay Van Andel called their company Amway, and it is now the largest MLM company in the world. At about the same time, another ex-Nutrilite distributor was also making provision to build a new and secure MLM business. This was Dr Forrest C Shaklee, and his company, Shaklee also developed into a multi-national company (although its UK subsidiary has now been acquired by Nature’s Sunshine Products).
Whereas Amway developed a completely different line of products from Nutrilite to start their new venture (household cleaning products), Shaklee remained committed to food supplements and nutrition products. Ironically, several years after these breakaways, the Nutrilite company was bought by the successful and expanding Amway Corporation and now provides one of Amway’s basic product lines.
The success of Nutrilite and the C&M marketing plan through-out the 1950’s inspired other direct sales companies to use similar techniques. One of these was Stanley Home Products, some of whose distributors also left to develop their own highly successful MLM companies.
Mary Kay Cosmetics, Home Interiors and Gifts, and Tupperware. The first two have not ventured into the UK, and Tupperware does not use MLM in this country. In 1969 the well-established UK direct selling company Kleeneze was looking at other marketing structures for its products, and was impressed with the methods used by the Amway Corporation in the USA.
Consequently, in that year, the company brought into being what is believed to have been the first genuine MLM business in Europe. In 1973 Amway (UK) Ltd started operations in this country, followed in 1975 by Shaklee.
Reference; Multi-Marketing -Peter Clothier.