A common complaint (and I must say a somewhat legitmate one) that I encounter about Amway rep’s is that they’re often not “up front” about the identity of the company they work with. IBOs generally don’t call people and say something like “What are you doing Friday for lunch? I’d like to show you the Amway business”. Indeed, many IBOs are reportedly actively taught to avoid telling a prospect they own an Amway business. My personal feeling is that we all need to be proud of our affiliation with Amway and not try to hide it. If one truly looks at the facts about Amway and all the great things Amway is doing around the world, it’s difficult not to be proud to be working with this extraordinary company. Even so, there are some legitimate reasons why being 100% upfront all of the time may not be the best approach. Check out this video about The Mojave Experiment by Microsoft and you’ll see why.
Probably the last major “unresolved” issue in the public arena with regards Amway is the “tools” or Business Support Materials (BSM), and in particular controversy over profits earned from BSM by “higher pins”. If you spend even a small amount of time on the internet researching Amway you’ll find many claims that “the real money” in the Amway business isn’t in promoting Amway products, but in promoting BSM, and some claim that Diamonds and above typically earn in excess of 90% of their income from their BSM side businesses. In the last few days, following the release of Amway’s 2008 sales data I’ve even seen quite a few comments on newspaper websites and other sites claiming the majority of Amway’s $8.2billion in sales was not from sale of Amway products, but from the sale of “motivational materials”. Continue reading
One of my favourite commentators on the Network Marketing industry is Len Clements of MarketWave Inc. Len has been very much at the forefront of defending the industry against anti-mlm zealots like Robert FitzPatrick and Jon Taylor. He unfortunately has had a tendency to repeat some of the unfair generalizations about Amway that are based on the behaviours of some Amway affiliated groups, but his work in promoting a professional view of Network Marketing and debunking myths is in my opinion without peer.
This week Len has launched a podcast, an online radio show, where you can hear Len talk about various industry issues. In this first episode he talks about some controversies surrounding NWM companies Zrii and YTB Travel and the “bias” against NWM that companies like Verizon, PayPal, and eBay have in their terms of service. His segment on the challenges currently being faced by YTB Travel is an excellent coverage of the legal status of multi-level marketing and what makes something a potential pyramid or not. Len is of the the opinion that YTB Travel setup may cross the line, and I’m afraid I have to agree with him.
I heartily recommend you give his Inside Network Marketing podcast a listen. It’s about 1h15m long, but that’s the great thing about a podcast – you can pause it and continue listening whenever you want!
This is an update of a graph I did last year for AmwayWiki
Amway global sales were reported at “estimated retail” until 2000 when the holding company of Alticor was formed. This means they’re valued assuming that they were all sold at the full retail price, not at the price they were sold to distributors/IBOs. Alticor reports actual revenue – sales at the base IBO price. I’ve converted the figures so they can be properly compared. It’s important to be aware of this as many critics of the business (including some former Diamonds who you would think know about this) have in the past conveniently ignored the change in reporting standards and tried to claim Amway’s sales peaked in 1998. Note however that Alticor sales includes revenues from other sources such Access Business Group and Amway Grand Plaza. In 2007 this was reported as around $100 million, so by far the majority of the sales are through the Amway business opportunity.
Amway’s official sales press release was issued today and confirmed what was already publicly stated by Rich DeVos last Friday – Amway’s global sales for 2008 were $8.2billion – up 15% on Amway’s 2007 sales of $7.1 billion.
In a break from previous years, data for no individual markets or regions has not been separated out other than to say there was strong growth in Russia, China, and India and that overall 2/3 of Amway’s 58 affiliates recorded sales increases. This works out to 39 affiliates with growth and 9 either flat or decreasing. In 2007 it was reported that 39 out of 55 markets increased sales. I’m a little confused by the change in the number of affiliates as the only new market to open was Amway Vietnam. It’s possible that in markets like Scandinavia, which covers 4 countries, have been considered separately. Continue reading