Who Started Network Marketing?

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Updated: May 2026 Oleksandr Honcharov, CEO at FlawlessMLM Network marketing was started by Carl Rehnborg, founder of Nutrilite in 1934. He developed the first multi-level compensation plan in 1945, which later became the foundation for Amway and the entire MLM industry. Who started network marketing? Rehnborg is widely credited as the originator of the model, though he never used the term "network marketing." The history of how network marketing began Carl Rehnborg — founded California Vitamin Company in 1934, later renamed Nutrilite, and developed the first MLM compensation plan in 1945. Nutrilite's plan — paid distributors a 3% bonus on the sales of people they sponsored, the first multi-level structure. Rich DeVos and Jay Van Andel — top Nutrilite distributors who founded Amway in 1959, using the model they learned at Nutrilite. The term "multi-level marketing" — emerged in the 1970s as the industry grew. The term "network marketing" — became popular in the 1980s with the rise of companies like Herbalife (1980), Nu Skin (1984), and Mary Kay (1963 but expanded in the 1980s). FTC Amway ruling (1979) — set the legal definition that separated MLM from pyramid schemes. Definition: Network marketing was started by Carl Rehnborg, founder of Nutrilite, who developed the first multi-level compensation plan in 1945. The model was popularized by Amway in 1959, which adopted Rehnborg's structure and built it into a global industry now worth over $180 billion annually. The model has changed in scale but not in core mechanics since 1945. Every modern MLM compensation plan traces back to what Rehnborg designed at Nutrilite. That's nearly a century of the same basic structure.

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