I’ve seen it claimed in numerous places over the years, including in Amway approved BSM, that Amway is “a 100% debt free company“.
I’ve always been curious if this was something that was actually true. Debt is not always a bad thing, and there can be very sensible business reasons to use properly managed debt instead of cash reserves or other methods to fund expansion or other new developments, not to mention simple day to day operations.
Well, it’s not true. In response to a tweet earlier today, Amway’s official twitter account responded –
Hi, Wes, and thanks! In fact, Amway is not 100% debt free (no company of our size is) but we are proud to be so financially stable!
I think it quite possibly was true at some stage and has simply been repeated ever since. Time to stop! Stating myths as fact just gives our critics ammunition.
I think it is a great topic. I am sure they go in and out of debt, like all smart business models. The important thing is this: My wife and I will be debt free in less than a year because of Amway.
May be its not totally debt free. But i bet you all i will be within 1-2years, its growing so enormous that debt is not an issue.
And also i think Amway in saying its debt free means that there are no unsecure debt which can be a worry in the future.
Gitansh – it’s Amway who is saying they are NOT debt free and that we shouldn’t say they are. I agree it’s not a problem though.
I know as late as the November 2011 the approved Business Overview from Amway said “Amway is a 50+ year-old, privately owned, debt-free corporation located in Ada, MI.”
Since the updated January 2011 Business Overview, the “debt-free” has been removed.
I’m thinking Amway Answers will do a blog post on it since I’ve been chatting with Jay at http://northofthe49th.opportunityzone.com/ about it. He said the same thing the tweet did.
I agree we need to stop saying untrue facts, it will only help with the credibility when talking about this business.
November 2010
But I knew what you meant. 🙂
Thanks for the facts! I am interested in two things: 1) Is Amway North America debt free? We all know that Amway Japan took in investment money to expand years ago. 2) Why would a 9B company tweet such a detail-less answer. They should know that short answers leave much to the imagination and this is not the industry be so terse.
Perhaps a link to an official explanation detailing the financial stability.
The tweet was in reply to someone else’s tweet – so they didn’t have much choice on the length there! I don’t think “Amway North America” is a distinct enough entity in it’s own right to sensibly answer your question, but even if it was, if I was Amway it’s not the kind of specifics I’d be publishing. I’m not even sure if it’s a particularly useful question? Why do you ask?
Still, since it’s not distinct it can probably be assumed the answer is “no” anyway.
Along with being financially stable I’d also add that they are financially conservative. Which is a good thing, particularly in this type of economy.