MLM Compensation Plans - A Little History
After decades of classic door to door direct selling by the Fuller Brush Man, multilevel sales plans rose to
popularity in the 1950s and 1960s (Amway, Mary Kay, and Shaklee), which allowed distributors to earn money not
only on their own direct sales, but also to earn override commissions on the sales of the salespeople they
recruited, the sales of the salespeople recruited by their recruits, and so on down the line. In the early programs —
before the advance of computer technology — it was difficult for a company to manage all the downline information
and payouts. So they usually allowed only "direct distributors" to buy directly from the company. These people
would then sell products to the distributors in their downlines, collecting payment from them, and paying them their
commissions, bonuses, and overrides.

Today, thanks to affordable, powerful computers, as well as efficient delivery systems such as UPS and Federal
Express, there is no longer a need for direct distributors to act as go-betweens. The new companies and most of
the older ones now allow all distributors to purchase directly from the company.

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