Amway Russia BSM rules – a sign of things to come? Part I

AmwayI was recently forwarded a copy of the new Amway Russia BSM (Business Support Materials) rules. Up until now most BSM has effectively been banned in Russia, under these guidelines, which come in to force in September, some limited BSM is allowed, though there are some quite strict requirements.

I’m told these regulations were forwarded to leaders without any prior consultation with the European Diamond Advisory Council, who are apparently quite shocked by some of the provisions. The concern of course is that similar provisions may be implemented in other countries, and at least one rumour I’ve heard has it that Amway Scandinavia (Sweden, Norway, Finland, Denmark) may be in the firing line.

Personally I found some things I liked and some things I didn’t like. The policy is broken in to two sections, one for meetings and other for any other BSM. Today I’m going to talk about “Events”, but first, it’s important to understand what Amway Europe considers to be BSM  –

Business Support Materials (BSM) is intended to be defined broadly and includes, but is not limited to, by way of example only: Printed materials (i.e. books, brochures, pamphlets, literature etc); audio-video and multimedia products (CDs, DVDs, tapes etc); internet-based products and services; non-Amway recognition and award systems; meetings and other events; and other materials or equipment used to support information or sale of Amway products or services as well as coupons, vouchers, tickets, or standing order/subscription programs relating to any of the foregoing. 

Now, this is the first thing I don’t like, but it’s nothing new, this is the definition of BSM throughout Europe. The problem? It’s so broad. Pretty much  *anything* used to support your Amway business comes under this definition. It doesn’t matter whether you produce it yourself, it’s produced by an Amway-associated BSM company, or it’s a book you bought on amazon.com. If you wish to use it to support your Amway business – it’s BSM. That great book on small business accounting you found at the library, that you want to recommend to your downline? BSM. That website on network marketing with the free audio? BSM. Heck, even a great new laptop or mobile phone you think might help with building your business … it’s BSM!

It’s important to clarify that this definition, and further rules do not specify the BSM rules apply just to sales of BSm. Indeed, the rules say –

Any promotion or production of meetings designed to support the Amway Business, and/or the promotion, sale and distribution of other BSMs, which are not in compliance with this document are strictly prohibited. 

Got that? Even just promoting that library book is prohibited. Heck, in theory even referring a European or Russian prospect to the Quixtar.com site to have a look at it would be a violation of these rules, since that website has not, to the best of my knowledge, been approved for use with prospects in those markets. Remember this Network Marketing Leadership event I commented on last week? I broke the rules when I recommended it.

Ridiculous. 

Now to some specifics of the new Russian BSM policy. There’s quite a few, my apologies for the length.

Events

Authorization 

  • Any meeting with more than 1 participants or with a charge must be registered with Amway and approved.
  • Only Diamonds may request authorization for events with more than 10 participants
  • Approval must be requested at least 60 days before the event or 30 days before the first ticket sales
  • Amway has sole discretion to authorize or the deny an event, including pricing
  • Events are limited to 700 attendees.
  • It must be visually recognizable during the entire event that the meeting is related to the Amway business.
  • Any advertisement must clearly indicate the event is being produced to support building an Amway business
  • Any images of the Amway brand in brochures or signage must be larger than any other organization names or references.

Comments: These rules apply to any event with a charge, so even if you’re a lowly 12%er wanting to run a meeting for your group, heck, even a meeting to promote Optimal Health to clients, and you want to charge a small fee to cover costs – well, you have to ask for approval at least 60 days beforehand, and you need to have signs promoting Amway, and your tickets and flyers need to have Amway plastered all over them.

Thanks Amway, you just raised the running costs for an IBO.

I’m also not sure about the thinking behind the 700 attendee limit. This may be something to do with local Russian laws, or there may be other reasoning behind it. 

Multi-day Events

  • Multi-day events are limited to 3 days
  • There can be no more than 3 multi-day events a year
  • Only qualified Russian Diamonds or individuals designated by amway are eligible to request authorization
  • If an event is more than one day, at least 30 minutes must be allocated for an Amway representative to speak, and Amway determines where they will be scheduled.

Comments: I have no real problem with any of these rules, with the proviso that Amway is sensible regarding scheduling. The 3 per year limit is potentially an issue though. It’s quite common within Amway organizations to have 3 multi-day “inspiration/motivation/recognition” type events a year, and I personally find this is about the right number. However, some LOSs also have more specific “nuts and bolts” training type events which can be multi-day. Go Diamonds, Bootcamps, “PHD” etc etc. What gets left out? The hardcore practical stuff, or the inspiration and recognition? Both are important in my view, and a total of 3 a year is not enough.

Ticket Sales and Refund Policies

  • AIEs (IBOs) who choose to sell tickets to any events are obligated to buy back tickets “intended for personal use by the purchaser” at any time before the meeting takes place.
  • The terms of the refund policy must be clearly provided prior to any sale
  • Tickets bought for other than personal use are subject to whatever return policy is agreed to from whoever they purchased the tickets
  • The selling AIE must provide a receipt with relevent information (eg price, tax etc)
  • The maximum ticket price is 25€ per day, including sales tax or 60€ per meeting.
  • Presentations must include the promotion and selling of Amway products and services
  • You must actually attend the event to obtain a refund

Comments:  In FTCvs Amway, Amway was found guilty or price fixing by a United States Court because they directly or indirectly required Amway IBOs in North America to sell Amway products at the same price. The court ruled that doing so infringed on the independence of the distributors. Here, Amway is requiring IBOs, and, effectively, companies that aren’t even IBOs, to price their events according to Amway’s wishes. In Russia IBOs are known as Amway Independent Entrepreneurs. Price fixing of this type is entirely contrary to the “American Way”, “Independent” and “Entrepreneur”. I don’t know how Russian courts would look at it, but we know what American courts would think of this. I mostly agree with what Amway is attempting to achieve with these rules, but I don’t think this is the right way to go about it. Given seminars are already only around a third of the cost of similar events by competitors, it would appear Amway is being a little extreme here.

The return policy is something I have separate concerns about, and in this case it’s not with Amway’s BSM rules per se that my concerns lie. It’s my opinion that BSM companies need to have far more obvious return policies. Return policies exist – but where are they? In my experience, tickets and subscription programs etc all tend to talk about tickets not being refundable and often fail to advise the purchaser when they are. One issue that has arisen quite often in stories by those who feel “burned” by their Amway experience is the encouragement to buy multiple tickets for an upcoming event. The idea is that by having already paid for these tickets you will be far more motivated to get out and sell them to someone else. In my opinion this is a good thing. Despite what some folk might have you believe, these events are generally worth every penny as far as helping grow your business. Problems arise though when folk don’t manage to on-sell them, for whatever reason. Since they are not for personal use, IBOs have no right of refund under current rules. Inevitably, some IBOs, in a burst of enthusiasm inspired by the seminar they are at, purchase a whole bunch of tickets. 3 or 4 months later you find them standing around outside the seminars desparately trying to scalp them. This isn’t good for the image of Amway or the BSM companies, and it certainly isn’t good for the IBOs who may be hundreds of euros out of pocket. The conundrum is that if a simple and easy refund policy is put in place, well, the motivational effect of paying for the tickets in advance goes out the door. I’m not quite sure the answer to this problem, but it’s not solved in these Russian BSM rules.

Content 

These rules are very similar to those espoused in the Quixtar Accreditation policies. AIEs may not –

  • use the stage as a platform to promote religious, political or personal social beliefs, including recommendation of certain religious or spiritual writings and practices
  •  
    • conduct worship services
    • exaggerate income possibilities or representations of income from other sources and suggesting it resulted from building and Amway business
    • promote any other business opportunity
    • substitute group or non-amway organizational identity for the amway business
    • advocate that success is only possible by using the system
    • misrepresent the relationship of AIEs to Amway
  • express personal opinions regarding political, social, or cultural issues

Comments: Many, many, many of the complaints on the internet from folk who have previously been involved in Amway or Quixtar revolve around issues of the promition of politics and religion at “Amway events”. I personally am a secular humanist, with somewhat left (at least by american standards) politicial leanings. The organization I work with, Network TwentyOne, has never in my experience promoted religious or political beliefs from stage, something I’m very thankful of. They do however run optional worship services in conjunction with multi-day events in some markets. Personally I don’t like the fact that part of my ticket cost might go towards funding that session, however, I also understand that for “believers” it makes attendance at a seminar on what may other be their “holy” days easier. I’m a fan of make things easier for IBOs, and I have such IBOs in my own downline. So I understand why such services are there – but I certainly lean on the side of having them removed from any business functions. I’m sure folk who wish to attend such services should be able to find them from other sources. From what I understand of some other organizations (at least one of which even promotes religion on their home page), such rules, if enforced by Amway, may be more than a little disconcerting!

It’s no secret that Amway’s founding families, the Devos’ and Van Andels, have very strong Christian faiths. The fact that they do not impose these beliefs on others, and indeed request, even require, IBOs not to impose them others does nothing but increase my already enormous respect for them. 

In a couple of days I’ll report on the rules regarding “other BSM”, which quite frankly have some shocks. If I was a Russian IBO, I’d be very, very, very unhappy with Amway about them. More to come …

Post a comment below or Discuss this post on Amway Talk

Leave a Reply

Your email address will not be published. Required fields are marked *