In the early 1930's,
Carl Rehnborg began selling the first major line of vitamins in the United States through his "California Vitamin Corporation", which changed its name to
Nutrilite Products Company, Inc. in 1939.
In 1945,
Nutrilite contracted with a company owned by Lee Mytinger and William Casselberry to become the exclusive American distributor of
Nutrilite vitamins.
Mytinger and Casselberry started the first major MLM with the same basic principle that underlies the industry today. Each independent distributor would be entitled to make a commission on his or her own sales of
Nutrilite products and an override commission on the sales made by those the distributor recruited below them as additional distributors and from those recruited by them and so on.
Mytinger was a salesman and Casselberry was a psychologist. The original
Nutrilite vitamin was a combination of vitamins and minerals in a base of alfalfa, parsly, and watercress. They marketed it with the vegetables to make it unique from other products. In the forties and fifties, they sold the material in strength and double strength (
Double X) at $20 a month.
Rich DeVos and
Jay Van Andel became distributors of "Nutrilite" vitamins in Mytinger and Casselberry's network. On September 6, 1949, DeVos and Van Andel incorporated their Nutrilite distributorship in Michigan as
Ja-Ri Corporation.
By the late fifties, Van Andel and DeVos and other distributors had been experiencing troubles with their supplier, Nutrilite Products Company, Inc., and Mytinger & Casselberry, Inc. . Mytinger & Casselberry were in the midst of an investigation and prosecution by the Food and Drug Administration for making false health claims about Nutrilite products. A small group of distributors was appointed, with Van Andel as the chairman, to try to work out an arrangement with Nutrilite.
Van Andel and DeVos decided that their suppliers were in great danger of collapsing and that they should go into the business themselves, producing their own products and selling them through the
JaRi sales organization which had more than 2000 distributors as members. They put together an organization of distributors called the American Way Association, the name of which was later changed to the Amway Distributors Association (this later became North America's "Independent Business Owners Association International" or
IBOAI). The primary purpose of this organization was to allow Van Andel and DeVos to communicate with their Nutrilite distributors in the JaRi organization and to hold the business together until they could develop their own manufacturing operation.
Van Andel and DeVos had to be very careful in changing their distributor organization, with its allegiance to Nutrilite food supplement products. Since the distributors were independent, they might quit. It was therefore necessary for Van Andel and DeVos to have these distributors concur in their plans to set up a product distribution and manufacturing operation; and they discussed the type of products they intended to produce with the distributors' association. Many of the distributors in the organization joined the American Way Association, and began distributing products sold to them by Ja-Ri Corporation/Amway Corporation. There were originally 35 Nutrilite distributors who joined as the first distributors of what would become Amway. The first president of the Amway Distributors Association was
Walter Bass.
They decided to look for products which were readily consumable, relatively low-priced, different from those found in retail stores, and which would lead to repeat sales. They chose soap and detergents because they felt it would be the easiest market to train distributors to sell. Van Andel and DeVos began distributing through the JaRi a liquid detergent called 'Frisk', which they renamed
LOC (liquid organic compound) and which is still one of the principal Amway products. This product was manufactured by Eckle Company, a small supplier in Detroit, Michigan, and it was one of the only biodegradable liquid detergents available at that time. Van Andel and DeVos, through JaRi Corporation, acquired the company, moved the assets to
Ada, Michigan, and changed its name to Amway Manufacturing Company. A few months later they introduced
SA8, a biodegradable powder detergent.
In November 1959, Van Andel and DeVos organized "Amway Sales Corporation" and "Amway Services Corporation." In November 1963, the name of "JaRi Corporation" was changed to "Amway Corporation"; and on January 1, 1964, Amway Sales Corporation, Amway Service Corporation, and Amway Manufacturing Corporation were merged into Amway Corporation. Amway subsequently purchased Nutrilite, which is a flagship brand in Amway/Quixtar still today.
Today, "Amway Corporation" has yet another new name,
Alticor, Inc., however, it is still the same Michigan Corporation that started as DeVos and Van Andel's Nutrilite distributorship in 1949. Alticor, Inc. owns a number of companies, including -
