Category Archives: Market News

Amway Vietnam to open in 2008

According to news reports, Amway Vietnam will begin sales operations sometime next year.

http://www.thanhniennews.com/business/?catid=2&newsid=3317

Direct selling firm Amway sets up factory

Amway, an affiliate of direct marketing group Alticor, opened a factory on Tuesday in the Amata Industrial Zone in the southern Dong Nai Province.

The global firm sells health and beauty care and nutritional supplements and a clutch of other consumer products, many of which will be made in the new factory.

The $14 million, 8-square meter plant has two production lines and a 2,2-square meter warehouse, and is expected to churn out products worth $3 million a year.

Amway will begin selling from the middle of next year for which it has obtained permission from the province.

The company sells its products directly to consumers through In-dependent Business Owners (IBOs), or sales representatives, through one-on-one, personal selling or via the internet.

It has over three million IBOs in over 8 countries and territories around the world.

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Quixtar – New IBOAI Board and Officers Announced

(hat tip to Ros for posting this in the forums)

Just posted today on the IBOAI.com and the IBOAIBlog.com websites.

New Board Members and Officers Elected!

Congratulations to the new Directors of the IBOAI Board: Howie Danzik, Jim Dornan, Jody Dutt, Kumar, Steve Woods, and Dan Yuen. Their terms will run from January 1, 2008, until December 31, 2010. Howie, Jim, Jody, Kumar, Steve, and Dan replace the Directors whose terms are set to expire at the end of 2007.

Beginning January 1, 2008, new Officers serving your Board will be Bill Hawkins, Chairman and Bob Andrews, Vice Chairman. We also welcome Jim Janz as a new member of the Governance and Oversight Committee.

The IBOAI and Quixtar signed a new contract reaffirming our close working relationship, as announced earlier on our IBOAI blog. A renewed commitment to working harder together is already evident in current Board Meetings with the Corporation. We are excited about a great year ahead!

Please remember to visit www.iboai.com or www.iboaiblog.com for new updates

International Connection merges with Network 21

Over on AmwayWiki some interesting news was just posted about International Connection, the Amway/Quixtar organization run by Triple Diamonds Brian and Marg Hays.

Apparently on September 21, 2007 International Connection official merged with Network TwentyOne, lead by Founders Crown Ambassadors, Jim & Nancy Dornan.

Years ago I came across some posts on one of the original “critics” websites that revealed a little of the history of Amway/Quixtar “systems”, and in particular International Connection. In the post, the author chides the “critic” for the same type of thing I’ve been talking about for years – considering all “systems” as somehow the same and “cookie-cutter clones”. Here’s the post, from 1995 (yes, the internet did exist then!) –

Historically, for years probably the two biggest Amway los were the Yaeger/Britt and WDA (World Wide Diamond) organizations. WDA was the downline of Crown Ambassadors Dan and Bunny Williams. Both of these organizations are downline from Crown Ambassadors Charlie and Elsie Marsh. Yaeger may be personally sponsored by the Marshs and the Williams’ are sponsored by Triple Diamonds BIll and Jan Campbell who are sposored by the Marshs.

About 5 years ago, as I understand, the Williams decided to semi-retire and cease being the titular head of the line. They decided to plug into Jody Victor whose folks Joe and ? are upline from the Marshs. Jody plugs into Dexter. Some of the WDA Diamonds followed Dan, and some chose not to.

Those who did not, formed International Connection, with a system, a code of ethics, etc.

There are about 6 Diamonds in the US affliated with IC, with several los represented. And they are an eclectic group, certainly not cookie cutter clones.

Some of the Diamonds you may be familiar with who were WDA pins are Kelly and Jan Brown, Mel and Bea Benke, Jim and Juanice Ward, Triples Brian and Marg Hayes (Brian is President of IC), Doubles Lew and Darlene Riggan, Pam and Dorsey Deaton, Pat and John Vaughn, and Executive Diamonds Pat and Beatty Kaufman. Some of the non WDA pins who chose to affiliate with IC are Diamonds John and Barb Villani and Johnny and Jo Edwin, Doubles Tom and Joy Trozera, Crowns Dennis and Kay Beecher and Crown Ambassadors John and Pat Hendrickson

Interestingly, some of thses folks begat some enormous organizations which aren’t part of IC. For example, 5% of Amway Japan is down one of the Edwin’s legs; a slew of Crowns from California including Jim and Nancy Dornan (Network 21) is another of the Edwin’s legs; and the INA organization is one of the Kaufman’s legs.

The difference in operations:

Having begun the business in Atlanta, I have definite awareness of how some lines pursue their business (i.e. your info).

Most of the Amway systems are similar in their emphasis on tapes, books and functions being important tools for those distributors who desire to build networks. As a Regional Sales Manager for a Fortune 1 company, I am aware of the necessity for the appropriate information to be deseminated. Part of the conundrum in Amway is the those who do not use the tools and patterns don’t grow organizations to direct and beyond. In IC things are kept in perspective. There are no demands with regard to these tools. Use or attendence is voluntary. People who choose not to participate are not ostracized. The tools are reasonably priced (I don’t see the pins getting rich from the flow). There is a cheerfully administered refund policy. We’ve never been chastised for not attending a function.

Here in California we have 2 or 3 Moving Up Seminars per year. The investment is usually $75 per person for seminar fees and the banquet. Accomodations and meals are additional. The organizers arrange special rates at these first class hotels (Hyatt, Red Lion, etc.) usually $69 per night. On three day weekends, we pay for 2 nights and get the 3rd free. Also, if for some reason someone cannot attend the weekend, the registration fee is rolled over to the next.

Another thing that I appreciate about IC is that the reglious fevor that seems to grip some other lines does not exist. Although many folks are christians of varying denominations, there is a sesitivity to those of other faiths. My wife and I are Jewish folks from NYC and we’re real comfortable with the environment. Heck, our sponsor and Emerald was head of AV for the Baptist Home Mission Board and they’ve become among our closest friends.

On another site, in 1997 a poster wrote the following about International Connection –

What an interesting piece of research blended with imaginative speculation. Do you know of any research about the sub-group variations in the organization? I am speaking of major associations of high-level achievers who espouse very different philosophical approaches? These sub-cultures come in a variety of flavors ranging from evangelical Christian (small c is my deliberate connotation) fundamentalist to peaceful intellectuals who promote treating this business as a business rather than a pedagogical thunderbolt.

There is one such group, International Connection (IC), headed by a former Motorola Exec named Brian Hays. Hays developed a training concept called the”8-Step Pattern” that has been picked up broadly across the Amway landscape.

The IC group stands out in several ways. It distributes training materials and seminars at cost. It promotes the distinction between categories of participation: i.e. retail consumer, small business/wholesale consumption, and the network builder and encourages distributors to respect the individual’s level of interest and commitment.

IC functions are kept small enough that contact with high-achieving leaders known as “Diamond Directs” is possible. It teaches the facts, including that only 2% of distributors seek and attain significant income levels. There is no evident deception. In fact, there is a dedication to the respect for diversity and honesty.

These experiences of the IC “philosophy” sound remarkably similar to what I have experienced with Network TwentyOne. I’m sure this new “merger” will be a successful one.

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Amway’s letter to IBOs in the UK and Ireland

The following letter was sent this week to Amway Independent Business Owners – now to be known as Amway Business Owners (!) in the United Kingdom and Ireland –

RE: Transition from IBO to ABO

To all existing Business Owners,

As we have previously advised all IBOs the Department of Trade and Industry has brought legal proceedings against Amway seeking to wind up the company. The DTI has in particular raised issues as to the manner in which the business is promoted and the sale and promotion of BSM.

It was as an immediate reaction to those proceedings that the company took the steps that it did on 4 May 27 to impose a moratorium on the registration of new IBOs and to ban the sale and promotion of BSM.

Amway is continuing to defend the proceedings that the DTI have brought but at the same time it has undertaken a fundamental review of the manner in which the business operates in the UK and Ireland. It is hoped that the new business model will address the concerns of the DTI. Key aspects of the new model include a continuing ban on the sale and promotion of third party BSM. (Amway may subsequently introduce a licensing system under which it can control the quantity, quality and pricing of any third party BSM.) There will also be much greater focus on ensuring that new IBOs properly understand the Amway business opportunity.

However, in addition to seeking to address issues raised by the DTI, the company has also taken the opportunity to introduce other changes to the business which are both exciting and transformational. Accordingly, Amway United Kingdom and Republic of Ireland are preparing to launch the “new” Amway in October 27.

The changes that are planned for October are:

• A new three level qualification system: Retail Consultant, Certified Retail Consultant and Business Consultant

• A new “One Price For All” strategy

• Dramatic price reductions on Home Care and Personal Care products for easier retailing.

• New Amway On-Line web site to offer increased support for IBO’s and their customers.

• Modifications to the Sales & Marketing Plan to increase the focus on retailing and income growth.

• Increase and improved training for ALL our IBO’s.

• Renewed focus on product demonstrations and product support.

• New training program on product retailing.

• New SIP/NCA program focused on rewarding income growth.

All of these positive changes have been shared with UK leaders and will be explained in detail at the Autumn Expo.

This is just the first step to transform Amway UK/RoI into a company where our IBO’s can retail with confidence, provide products to customers and then train and support other IBO’s to do the same.

In order to implement the new business model, Amway needs to transition all IBOs who are interested in continuing their business to a new contract as “Amway Business Owners” (“ABOs”). All IBOs are therefore required to sign a transitional application form to confirm their desire to join Amway under the new mode of operations. This document must be signed and returned to Amway in Milton Keynes before you can begin conducting any type of business again associated with Amway. If you are interested in getting pre-certified before the official October launch, we will have the new transitional application ready and available for the first time at the EXPO. If you have not already registered for EXPO then you can do so at www.zibrant.co.uk/amway.

If you decide that you do not wish to be a part of the new Amway, you do not need to take any further action and your current contract will automatically expire on 15 October 27. Accordingly, this letter constitutes the formal 3 days notice of the termination of your existing contract with Amway required under Clause 8 of the Amway Terms and Conditions of Registration.

As you are aware, there is currently a moratorium on sponsoring activity (including promoting the Amway business to prospects) which we announced on May 4 and extended on May 24 pursuant to undertakings we gave to the Court. We had originally intended ending the moratorium around the end of September, but we have reconsidered this approach in view of the likelihood that the winding-up petition of the DTI will proceed to a hearing in November and continue into December and given the comments made by a number of Platinum IBOs at a recent seminar in advance of the EXPO. Accordingly, although we will be implementing the other changes to the model, including those referred to above, in October, we have also decided to continue the moratorium on sponsoring until after the hearing.

We feel that extending the moratorium on sponsoring is prudent and in the best interest of all parties given the uncertainty that inevitably exists when a case is taken to court. In such circumstances it is much fairer to potential ABOs to wait until the case is successfully resolved before inviting them to take up the great business opportunity that Amway offers. This will provide you all with the time necessary to fully understand the dynamics of the new business model, to develop a solid customer _base_ and to strengthen your own retailing skills and will also give us the opportunity to educate the DTI and the Court about our business model. In this way, we hope to demonstrate both the viability of the new business model and our collective determination to operate it in the public interest.

We also hope that with your support we can demonstrate to the DTI that you are as committed to and enthusiastic about the new business model as we are.

We want to assure you that Amway is dedicated to the United Kingdom & Republic of Ireland markets and will continue to focus on making the Amway business better for all business owners. The changes we are making in October reflect this commitment but this is only a small first step in providing each of you with a business opportunity that you can be proud to build and promote in the future.

If you have any questions with regard to the content of this letter, then please contact the Amway Business Services Team on 198 6294.

Yours faithfully,

Tom Denham
Director and General Manager
Amway UK and RoI Ltd.

There’s somethings about these changes I like, others seem like quite dramatic changes to the Amway business model. What has me curious is the following:

In the letter, Amway says –

The DTI has in particular raised issues as to the manner in which the business is promoted and the sale and promotion of BSM.

On the Amway blog, Amway says today

the immediate spark for action was a “winding-up” petition from the UK Department of Trade and Industry, which had taken serious issue with some BSM sales and the way certain individuals and organizations were promoting the business to prospects. (source)

and back in May

The heart of the DTI’s position, as we understand it, is that the business opportunity is promoted by incorporated and unincorporated organizations in a manner that does not reflect the financial rewards people are likely to earn when they participate in the Amway business.

The DTI also objects to the manner and frequency in which meetings and BSMs are promoted by the sales organizations in conjunction with the Amway business opportunity.

Amway’s fault, according to the petition, lies in our failure to take sufficient action to prevent these abuses from occurring.

To prevent immediate action by the DTI, Amway immediately stopped all sponsoring and banned the use of all non-authorised BSM – which was all of it, since they removed the authorisation on previously authorised BSM.

It’s clear that Amway believes, or at least is claiming, that the problem is essentially with the "system" companies and how they’ve been promoting the business. The question is – if this is all there was to the complaint, why all the dramatic changes to the Amway business model, and why is the DTI continuing with it’s action, since the BSM companies are no longer in the picture?

NONE of the changes listed above are to do with the BSM companies. There is still no sponsoring allowed, the normal "plan" has been transformed into a 3-level "retail consultant" plan and there is an enormous new focus on retailing. What’s more I hear that the new GM used to work for AVON – a company with more of a door-to-door selling modus operandi.

All of this indicates the DTI’s problem isn’t with the BSM companies per se. It’s with the whole idea of networking and multi-level marketing. Otherwise, why the changes to become so extremely focussed on retailing? Now, I for one think there has not been enough focus on retailing in the past – but as Rich DeVos is fond of pointing out – it’s about a balance. This is a dramatic shift in that balance.

The UK DTI has for several years received a barrage of complaints against Amway and MLMs, directed and encouraged by the like of Scott Larsen, Eric Janssen, and Robert FitzPatrick. It appears clear to me that the problem the DTI has "with the way the business is presented" is a problem with network marketing – it’s a problem with the Amway business plan, not with the BSM companies per se. FitzPatrick in particular believes that, by definition, all MLMs are illegal pyramids.

Has he convinced the DTI of this?

Are other Network Marketing and Multi-level Marketing companies aware of the potential seriousness of this case? Amway is clearly trying to spin this as a problem caused by the BSM companies, yet is making dramatic changes unrelated to BSM. If I am correct, this is a threat to the entire industry, and Amway’s attempt to deflect "blame" is likely to make it worse, as other companies are unlikely to be undertaking the kind of lobbying they should be doing.

Amway – come clean – it’s obviously not just about BSM – what’s the full story?

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UPDATE: A few folk around the place are attacking this post on the basis that BSM effectively has been banned in the UK, so how can I claim the changes have nothing to do with BSM? Well – BSM was banned nearly 5 months ago – it’s out of the picture. Yet the DTI is still pursuing it’s "wind-up" petition against Amway and Amway has just introduced all these new major changes that have nothing to do with BSM. So there’s two options – all these changes have nothing to do with the DTI action, or the DTI action is about a lot more than just BSM. Either way, Amway needs to come clean.
Continue reading Amway’s letter to IBOs in the UK and Ireland

Amway Latin America affiliates merge and launch new website

As of September 1, 2007, Amway’s Latin American affiliates – Argentina, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Panama, Uruguay and Venezuela have merged to form one Latin America market.

As part of the merger, Lines of Sponsorship are now “consolidated” (CLOS), meaning they cross borders, much like someone in the US can directly sponsor someone in Canada into Quixtar.

Along with the CLOS a new unified website is to be launched today (September 4, 2007).

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Amway Indonesia – 30% growth in 2006

From The Jakarta Post, July 2, 2007

Amway Indonesia shows how philanthropy works in business

Andi Haswidi, The Jakarta Post, Jakarta

On June 26, Indonesia’s biggest multilevel marketing company, Amway Indonesia, celebrated its 15th year of operation in the country.

Last year the company booked 30 percent growth in total sales, which surpassed the 25 percent growth in 2005, and lifted the number of its distributors to more than 300,000. Continue reading Amway Indonesia – 30% growth in 2006

Amway UK and Ireland changes

On numerous places on the internet, including the forums on this website, the following letter from Amway UK and Ireland to Amway IBOs has been published –

Letter: from Ben Woodward Branch Manager Amway UK UK/ROI IBO Communication

May 4, 2007

To: UK/ROI IBO Leader
From: Ben Woodward, Branch Manager, Amway UK

RE: Significant change to Amway’s mode of operations in UK/Republic of Ireland.

This letter is to inform you of significant changes to the way Amway will conduct its business in the UK and Republic of Ireland. These changes are effective immediately. While these changes may cause short-term challenges for some of our IBOs, we strongly believe the changes will make our long-term business in the UK/RoI stronger.

Effective Immediately: 4 May 2007.

Amway will prohibit the production, sale or promotion of BSM that are not authorized and distributed by Amway; this includes websites. This includes any BSM (books, tapes, meetings, CD’s, websites) that have been already been approved by Amway UK/RoI. They are now considered unauthorized for use.

All meetings for which an entry fee is charged are suspended until Amway has approved, in writing, the meeting and its content; Amway has imposed a moratorium on sponsoring new IBOs for at least 60 days and until current IBOs are re-trained and re-qualified; We are evaluating all costs associated with joining Amway;

We are also sanctioning a number of IBOs based on contract violations that have come to our attention.

Failure to comply with the above mentioned points 1 to 3 will lead to a suspension and/or termination of the respective IBO contract. Please also note that Amway is in no way limited to these sanctions, but can impose further corrective or punitive measures.

In addition, the company is announcing a thorough review of its business practices globally with the goal of ensuring a consistent, rigorously enforced set of rules and regulations governs its relationships with IBOs and consumers.

That global audit has begun, and we expect it to be completed in June, and will share the results with you later this summer.

These are important steps, but in some ways, they are not surprising ones. Many of you know that for the past 1 years, Amway has been moving to exert more control over the way we do business globally.

In newer markets that has meant, for example, outright bans or tight restrictions on the sale of non-company BSMs and the requirement of a more consistent, approved messaging and branding by IBOs about the Amway business opportunity.

While most changes in other markets have been carried out gradually around the world according to our timetable, we need to move more quickly here. This is in response to serious concerns raised about Amway by the Department of Trade and Industry (DTI) following the receipt of complaints about BSMs and misrepresentation of the business to prospective IBOs.

At this time, we can not specify when sponsoring will be allowed to resume. We will continue to communicate with key international and local IBO leadership to update them on developments of a new operational mode in UK and Republic of Ireland.

Enquiries
For example, if any IBO has a planned meeting for which tickets have been sold (that is required to be cancelled and ticket purchases refunded), or they have unsold inventory of BSM, or have unsold Starter kits, or have completed applications not yet submitted to Amway, they may contact the dedicated enquiry telephone number – 198-62940 (press option 4).

In the following weeks, we will seek to meet with you personally to discuss the implications of this policy change and respond to any questions you may have. Meanwhile, please feel free to call me at 198-62944.

Amway has been in the UK/RoI for more than 30 years, and today is a strong, growing £13 million business with more than 100 staff and 30,000 IBOs. We are entering into a challenging period of time.

But we believe in this business, we believe in our values and we believe in our IBOs. We are committed to making the changes we need to make in order to ensure the continued growth and success of Amway in the UK/RoI.

I have refrained from commenting on the email until I had confirmation it was authentic, I now have that confirmation and a little more information. The situation with the Department of Trade and Industry is a real issue, and leaders have been aware of it for some months. As has been the case in other markets, some IBOs, and indeed some “systems” have not operated in what I would consider a professional manner. I’ve had reports in the past, for example, of Amway UK and Ireland IBOs being taught by their group to invite friends around for dinner, then at the end of the dinner, bring out the whiteboard! Such deceptive techniques are explicitly against Amway rules and highly unprofessional.

Additionally, Amway Europe has had in place for some time rules limiting the amount of BSM IBOs may purchase in the first 3 months in the business. It’s my understanding these rules have been ignored by some groups.

An IBO with business in the UK I have been in contact with has clarified the following  –

  • Sponsoring is postponed
  • BSM sale is stopped until it is (re)-approved.
  • Meetings with an entry-fee need written approval.
  • The business has not stopped, the sale of products have not been banned!
  • The income opportunity is not closed
  • Meetings are not banned

He goes on to point out –

This is not unique to the UK. It works fine in many countries (including China and Russia) where similar regulations have been in place from the opening of the business due to local government regulations. Those markets are not sleeping… 🙂 The IBO organisations I know of are not planning to sue Amway, they are cooperating with Amway to get the DTI issues cleared properly.

I’ll have more information as it comes to hand, but as it is a public holiday in the UK today, this may take a little while. It appears that what has happened is that the Quixtar Accreditation approach has been made compulsory and implemented immediately by Amway UK and Ireland in response to concerns expressed by the UK Deparment of Trade and Industry. Such “shock therapy” is what many critics have been calling for, whereas Amway and Quixtar has tended to take a more “softly, softly” approach to implementing change. The UK market is a potential sleeping giant for Amway, with very little market penetration, which hasn’t been helped by the deceptive practices and over-selling of some IBOs. It will be interesting to see the effect of these changes.

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