Amway

Amway

Amway Corporation

The Amway Corporation has grown from a two-man company selling all-purpose cleaner to become the largest and best known multi-level or network marketer in the world. Its diverse product line, ranging from personal care items to major appliances, generated sales of over seven billion dollars in 1998 and was sold by nearly one million distributors in 80 countries and territories. In the process, founders Richard M. DeVos and Jay Van Andel have made millionaires of some of their adherents and Fortune 400 billionaires of themselves. With the growth of home businesses in late twentieth-century America, Amway has inspired a slew of imitating companies, selling everything from soap to long distance telephone service. Amway, or the American Way Association as it was first called, has also revived interest in the American success story; rags-to-riches financial success based on hard work, individualism, positive thinking, free enterprise, and faith in God and country.

The prosperous years following World War II inspired people to search for their own piece of the American dream. A variant of the 1930s chain-letter craze, pyramid friendship clubs swept the United States in 1949. The clubs encouraged people to make new friends by requiring them to pay one or two dollars to join and then recruit at least two other paying members. The individual at the top of the pyramid hosted a party and received all of the proceeds before dropping out. This "new mass hysteria," as Life magazine called it, was popular mostly among the lower middle class but attracted adherents even from the upper class. The pyramid aspect was illegal--a form of gambling--but authorities risked huge public protest if they intervened. Hundreds of irate readers even threatened to cancel their subscriptions to the Detroit News when the paper published stories condemning the clubs. That, however, did not stop magazines and movie newsreels from showing images of lucky participants waving fistfuls of cash at pyramid parties. But most of the schemers got nothing more than dreams of instant riches.

Amway co-founders Jay Van Andel (1924--) and Richard DeVos (1926--) met as students at Grand Rapids, Michigan, Christian High School in 1940. An oft-told business deal brought the high school buddies together; DeVos paid Van Andel a quarter each week for rides to and from school in Van Andel's old Ford Model A. The Dutch American DeVos and Van Andel shared the same church, the conservative Christian Reformed, and similar backgrounds, values, and interests. Their families encouraged hard work and both young men were instructed to develop their own businesses as a means of assuring their financial future. World War II intervened, but the pair reunited after the war and founded their first businesses, a flight school and the first drive-in restaurant in Grand Rapids.

Following an adventure-filled trip to South America by air, sea, and land, the two men searched for a new business opportunity in 1949. The answer appeared--at the height of the pyramid craze--in the form of Nutrilite vitamins and food supplements. Nutrilite had been founded by Carl Rehnborg, a survivor of a Chinese prison camp. Rehnborg returned to the United States convinced of the health benefits of vitamins and nutritional supplements. His company used a different sales technique, multi-level or network marketing, that was similar to but not exactly the same as pyramiding. New distributors paid $49 for a sales kit, not as a membership fee but for the cost of the kit, and did not have to recruit new distributors or meet sales quotas unless desired. Nutrilite distributors simulated aspects of pyramid friendship clubs. They sold their products door-to-door and person-to-person and were encouraged to follow up sales to make sure customers were using the purchases properly or to ask if they needed more. Satisfied customers often became new distributors of Nutrilite and original distributors received a percentage of new distributors' sales, even if they left the business.

DeVos and Van Andel excelled at network marketing, making $82,000 their first year and more than $300,000 in 1950, working out of basement offices in their homes. Over the next ten years, they built one of the most successful Nutrilite distributorships in America. In 1958, a conflict within Nutrilite's management prompted the pair to develop their own organization and product line. The American Way Association was established with the name changed to Amway Corporation the following year. DeVos and Van Andel built their company around another product, a concentrated all-purpose cleaner known as L. O. C., or liquid organic cleaner. Ownership of the company had one additional benefit beyond being a distributor. DeVos and Van Andel now made money on every sale, not just those they or their distributors made.

The new enterprise "took on a life of its own, quickly outgrowing its tiny quarters and outpacing the most optimistic sales expectations of its founders," according to a corporate biography. Operation was moved to a building on the corporation's current site in a suburb of Grand Rapids--Ada, Michigan--in 1960. In 1962, Amway became an international company, opening its first affiliate in Canada. By 1963, sales were 12 times the first-year sales. In its first seven years, Amway had to complete 45 plant expansions just to keep pace with sales growth. By 1965, the company that started with a dozen workers employed 500 and its distributor force had multiplied to 65,000. The original L. O. C. was joined by several distinct product lines with dozens of offerings each. Most of the products were "knock-offs," chemically similar to name brands but sold under the Amway name. A fire in the company's aerosol plant in Ada in 1969 failed to slow growth.

The 1970s were an important decade for the company. Pyramid schemes attracted renewed public attention in 1972 when a South Carolina pitchman named Glenn Turner was convicted of swindling thousands through fraudulent cosmetic and motivational pyramid schemes. The Federal Trade Commission (FTC) accused Amway of similar pyramid tactics in 1975. "They're not in a business, but some sort of quasi-religious, socio-political organization," a FTC lawyer said. The FTC alleged the company failed to disclose its distributor drop-out rate, well over 50 percent, as well. But an administrative law judge disagreed in 1978, arguing that Amway was a "genuine business opportunity." The company began a vigorous public relations campaign against pyramid schemes, which was to continue on its corporate web-page through the late 1990s.

What does the word Amway mean? Amway is an abbreviation for "American Way" and was coined in 1959 by company founders, Jay Van Andel and Richard DeVos. Short, unique and easy to remember, Amway has been registered as a corporate name and trademark ever since.

In the following decades, Amway Corporation successfully established itself as a leading multilevel marketing business, built on strong values and founding principles that continue to sustain our company today. The business is built on the simple integrity of helping people lead better lives. We have long had a tradition of opportunity and success.

Today, Amway is a multibillion-dollar international business representing freedom and opportunity to millions of people in more than 80 countries and territories around the world. We offer over 3 million Business Owners the inspiration to grow those businesses, and we work hard to provide new and better ways for them to achieve their life goals.

Amway's range of products is huge. Our exclusive brands together feature more than 450 individual products, created to meet the needs and regulations of more than 80 different markets around the world.

Because preferences and legal requirements vary widely around the world, so does the range of AMWAY products available in each market. Even in Europe, with its single market, national regulations mean that our product ranges are different in Germany and the UK. For this reason, we don't produce a global product listing. In each market, though, there are many excellent sources of information about the products available.

Amway's business is built on direct sales from Business Owners to consumers. It's been the foundation for more than 40 years of global success. Many people join the business because they use AMWAY products and appreciate their quality and value. That means that our Business Owners are often some of the best sources of information about our