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With Soap In Their Hands & Hope In Their Hearts
RAMJEE CHANDRAN (http://cageyconsumer.com/amwindia.html) According to the local office of Amway India, about six thousand five hundred Bangaloreans have already signed up to become Amway salespersons. These 6,500 people have paid the USA-owned Amway Corp. Rs. 4,200 each. 6,500 x Rs. 4,200 = (almost) Rs. 3 crores. Cash up front. And that’s only in Bangalore. A Bangalore company probably can’t raise this kind of money in the stock market in these days of tight money conditions. But Amway did. Without advertising. Without the great dollops of press coverage that even the launch of a new whisky usually generates. It’s all word of mouth, we are told. Word from the mouths of people living abroad who have been told by Amway to call their kith, kin and caboodle in India. Word is also to spam you on the internet. Spam is unsolicited promotional material— junk mail on the Net. Word is to send you cheap postcards. Calling, writing, faxing or spamming people in India to tell them of the good news. The good news is that they have the means to “help” you to change your life. To “own your business”. To “earn your freedom”. To “not just get a life, but get a lifestyle”. The subliminal message is: Stop being a loser. Whatever you’ve been doing with your life, it is worth less than what you can do as an Amway salesperson. When I put this last proposition across to an Amway sales person, his response was this: “You’ve hit the nail on the head. You’re right. That is the case.” He explained further: “You don’t have to give up your publishing business (thank god!). Use your spare time profitably. What do you do when drive to work? Nothing! What do you do in the evenings? Watch TV? Pah!” Right through this entire opening phase, something nagged me. There was no mention of what Amway did. What was the ‘word’ that this guy kept talking about. What was Amway selling?
I asked him. “The dream, my man,” he replied his face aglow “the dream. Amway is not selling you anything. Amway is giving you a ‘business opportunity’ you cannot beat.” The ‘business opportunity’ to do what?” I asked, still confused. “The opportunity to use world class products. The opportunity to get others to use world class products. The opportunity to change your life.” “What world class products?” “Only the best.” “Name one product.” “Many products. 10,000 products. From shampoo to Chrysler cars!” “I can buy Chrysler cars in Bangalore?” “Not yet. But the day will come. Maybe not Chrysler cars but maybe Marutis.” “I can buy a Maruti through Amway?” “Of course! When they tie up the deal.” “What deal?” “Distribution deal. If Maruti is smart, they will understand that in a few years, only multi-level marketing will survive. Even Bill Gates said it. The end of retail selling is here. Amway will overtake them. By the year 2000, no one will buy anything from shops.” “Which shops?” “Any shop. Every shop.” “Nilgiris, Shoppers’ Stop, Folio and Bata will all close down?” “Yes, of course.” He sounded a little exasperated. Then he became paternal. He employed the tone one uses to talk to a friend’s child. “Are you aware of Amway?” “Yes,” I replied “I have read everything they gave another salesman like yourself. And I went to an Amway meeting.” “Then you have learned nothing, my friend, nothing! You must have spoken to the wrong person. The world is going to change. Haven’t I already told you that retail selling dead?” I did not give up. “Where is this place where they stock 10,000 products. I’d like to see it for myself.” “Well, it’s not 10,000 products yet. But it will get there.” “How many products do they have right now?” “That’s immaterial. You’re just being pedestrian.” “Tell me how many products do they have?” “Six.” “Six of what?” “Detergents, a great Liquid Organic Cleaner which you can pour into your plants after cleaning the floors and Dish Drops which will make your glassware shine like anything!”
Before I could speak, he added: “They also have a lotion and a shampoo. But why am I telling you all this. The point is not the products but the opportunity. No matter what the products are, the opportunity will make you lots of money. And then you can retire. What is needed is not for us to quibble about details. We—you, me and everybody—must do all we can to make this succeed.” Then, totally pickled in his own sales pitch, he began to shout: “GET OFF THE POT! GET ON THE PHONE, MAN, AND SPREAD THE WORD!! USE YOUR MAGAZINES AND TELL LAKHS OF PEOPLE THE GOOD NEWS!!!” So I got off the pot, picked up my phone and began to research the story. How It Works Amway's operations rest on what is called Multi Level Marketing (or MLM). It has been called 'network marketing', 'pyramid selling' (a phrase that inspires vitriol among Amway types). It has also been compared to a chain letter or the buying of a lottery ticket. How it works is both simple and complicated at the same time. You try and sign up others as fellow Amway distributors. You get commissions on whatever they buy. You also get commissions on the purchases made by the people whom they in turn sign up as Amway distributors. The more people you sign up, the more they will buy. The more they buy, the more money you will make. How To Become A Millionaire Now I will explain the 9-6-3 scheme because every Amway distributor talked about this. Having signed up, you get 9 people to sign up. Next, each of the nine people gets 6 people to sign up. Then, each of those 6 people gets 3 people to sign up. Here's the calculation: You = 1. You x 9 = 9 people. 9 x 6 = 54. 54 x 3 = 162. Total = 226 Amway distributors in your group. If you achieve this target, you no longer 'belong' to someone else's group. You become a 'direct'. The next assumption is that each of these 226 people in your group will buy an average of Rs. 1,500 worth of Amway products every month. 226 x Rs. 1,500 = Rs. 3,39,000 per month.
For every Rs. 1,500 worth of product purchase you get 50 PV (Point Value). It works out to about 3.34% of the value of products bought. For every PV you get a commission. It's called 'bonus'. There is a (telescopic) slab system to determine your bonus. The lower the quantity of purchase, the lower the commission. Till you reach the level of 200 PV (that's Rs. 6,000 worth of goods), you get no bonus. With 200 PVs, your earnings (bonus for that month), will be Rs. 180. When you (together with your group) buy Rs. 15,000 worth of products, you will get 500 PV. Your bonus on this will still be 3% and your personal income will be Rs. 450 per month less whatever is to be shared with the others in the group. If you and your group members buy Rs. 3.39 lakhs worth of Amway products every month, you will earn 11,300 PV. Your bonus on this will be 21% and you will earn Rs. 71,190.00. After sharing your bonus with the others in your group, you will be left with Rs. 40,500.Amway Products vs. Other Products 1. G&H Body Lotion, 250 ml, Rs. 316.00 Nivea Lotion, 250 ml, Rs. 110.00 2. Satinique (shampoo & cond.) 250 ml, Rs. 314.00 Sunsilk (shampoo & conditioner) 250 ml, Rs. 85.00 3. Dishdrops (1 litre =4 litres), Rs. 420.00 Godrej Concentrate (1 litre=4 litres). Rs. 64.00 4. SeeSpray Concentrate, (1 litre=4 litres) Rs. 290.00 Colin Glass & Household Cleaner, 4 litres, Rs. 252.00 5. Amway Zoom Concentrate, 1 litre, Rs. 299.00 Robin Cuffs N Collars, 1 litre Rs. 128.75 6. LOC High Suds Organic Cleaner, (1 litre=167 litres) Rs. 322.00 Teepol, 5.5 litres=167 litres, Rs. 352 (NOTE: I could not work out a way for people to spend Rs. 1500 a month without wasting the product.) At this level, the bottom 162 people in your group make no bonuses at all because their PV is less than 200, having bought only Rs. 1,500 worth of product. However, you have nothing to worry about. You will make bonuses on their purchases because their PVs are counted in your tally. Remember, you will earn this Rs. 40,500 a month only: 1) IF you get to sign up 226 people; 2) IF you make sure that each and every one of the 226 people buy Rs. 1,500 worth of products EVERY MONTH; and
3) IF every one of these 226 people has the ability and the desire to pay Amway prices (see box) because Amway makes the claim that their products are "world class". When you get 226 people in your group, you become a 'direct'. Your commission drops to 4% on the purchases of the group. Then what? Then you go sign up more and more people if you want to make more money. If you want to become a millionaire, you will need to sign up several hundreds of people and have them all buy more Amway products. If you are the poor sod at the bottom of the heap, you will be told “if you work hard" you can sign up hundreds, why thousands, of people from anywhere in the world to become Amway distributors and that , ie., by "working hard", you can beat the odds and become a millionaire. (When you become a millionaire—by "working hard" in your spare time—you can buy the BMW they kept showing you in the promotional videos ... the one that had the stereotype honey-blond draped over the dude who was playing golf.) You are also being told that if you aren't making nice dollops of money, it is because you aren't "working hard". The definition of "working hard" is to get as many people as you can to pay Amway Rs. 4,200 to become distributors. There's another way. That is to sell products door-to-door or person-to-person. You could do that too. There should be nothing to stop you from lining up outside apartment buildings with the dabba distributors of Bangalore (see photo) and sell Amway shampoo for Rs. 315. You could also be posh and invite the ladies of your kitty party for tea and then sign them up or sell them shampoos or detergents. The Positive Side To Amway Let me say that the above is the positive side to Amway. That is, the chance to make money. It is the chance to get oneself involved in a trade as a side business, specially if one is trying to recover from a failed (or failing business) or one has lost one's job. To the extent that a few people will surely make money, the system works. Alas, that's not where the story ends. Because for every one who makes money, there will necessarily many who do not. Indeed, as I went along from Amway distributor to Amway distributor, I found myself vastly better informed than most of them, with the exception of one articulate couple.
They spent over 2 hours with me, explaining the nitty gritty of the commission structure, despite reservations. I thank them for this. In direct contrast was my experience with the people at Amway's nice office on Airport Road. (See box above.)Hiding From Questions I spent 2 hours in the Amway office on Airport Road. The administrative manager, Arijit Mitra turned out to be extremely personable and a gentleman. However, he did say that he would not be able to answer any questions about the details of the scheme and indeed, he wanted to know why I wanted to write an in-depth story. His colleague, a lady that distributors speak to, first told me that she would come back in 10 minutes and then she vanished from plain sight. After one and a half hours, there was no sign of her and Mitra kept me engaged. Then another lady came out and told me that she was "very busy". I told her I would wait indefinitely. Then Mitra reappeared from the bowels of the Amway office and looked apologetic. He said his colleague would not meet me because she did not want to meet me. He explained that she was not "authorised to talk to the press". I tried to ask him to tell Vinitha not to hide inside the building and that my questions were very simple. But no dice. I never got to ask questions of the very person who was qualified to answer them. Then I asked Mitra to call her superior (Gowri Someone) in Delhi so I could talk to her. He did. He told me that she had told him the same thing. Mitra asked me to go to Delhi and speak to someone called Steven Beddoe. He said there was no one in Bangalore who was authorised to talk to the press. I asked Mitra why Amway had people in Bangalore who were authorised to take money from Bangaloreans but no one who could be accountable for this. Mitra had no answer. The Underside Of Amway My basic problem with Amway is that I believe that the success of some is dependent on the failures of others. That is: 1. Amway will make money; and 2. Some distributors will make money; but 3. Both will do so at the expense of the many that might not. And those who don't will probably be middle income people for whom Rs. 4,200 is a major piece of investment. (My accountant spends less on school fees for his two children for the whole year.)
As a quick aside, let me quote the 'zero sum theory'. For those who might not know it, this is a theory propounded by the famous economist, Lester Thurow. His book 'The Zero Sum Society' explains it in detail with a lot of econometric models. It will take me over a 100 pages to go into all that. Basically, Thurow said that for every person who has made a certain amount of profit, someone else has made an equivalent amount of loss. This is like the horse races. Any Turf Club will make money. A small number of bettors will make money. (One of them will hit the jackpot.) The only way that the Turf Club can make someone rich is because thousands of hopefuls lose their bets and their money. It is the losers' money which is collected and passed on to the lucky ones. The lottery works in pretty much the same way. I am not saying that Amway is like a horse race or a lottery. But the overall money movement and the odds of someone becoming rich are startlingly similar. This is better explained with numbers. Remember how many people you need to sign up? I'll remind you—225. If you must get 226 people (including you) to sign up, then consider this. 6,500 people (in Bangalore alone) have already signed up. Each one of them is a hopes he or she will make a lot of money. It is reasonable to expect that if one Amway distributor stands a chance of becoming a millionaire, then every Amway distributor should stand an equal chance of becoming a millionaire ... otherwise it is exactly like a horse race. So, if all 6,500 people adhere to the 9-6-3 formula, then hold on to your hat when you read this. 6,500 x 9 = 58,500 Amway distributors 58,500 x 6 = 3,51,000 Amway distributors 3,51,000 x 3 = 10,53,000 Amway distributors. That's Ten Lakhs Fifty Three Thousand (or 1.053 million) Amway distributors for the city of Bangalore. An employee of Bata Shoe Company, (the masters of retail selling), told me they employ about 30,000 sales people in their 1,500 stores across the nation. 30,000 Bata sales people for the whole of India. 10,53,000 Amway sales people only for Bangalore. The standard response to this is that all these Amway salespersons are not necessarily going to be in Bangalore. You can pick up the phone and call someone anywhere else in the world. Therefore, you can call your cousin in Ooty and tell her the 'good news'. She pays Rs. 4,200, then she will call her nephew in Raichur who will pay Rs. 4,200 and he will call someone else who will pay Rs. 4,200 and so on. All this is done in the hope that more sign-ups mean more people will buy Amway products.
So if not 10,53,000 Amway sales people, how many will actually operate in Bangalore? Let's hazard a guess. Half ... 5 lakh salespeople? 2 lakh sales people? 1 lakh sales people? Will there be any left at all? Two days after my visit to the Amway office I received a call from the Amway HQ in Delhi, from Steven Beddoe, GM, Distributor Services. He told me that the numbers would never grow to what I have mentioned above. Because I persisted, Beddoe suggested that the possible number of Amway distributors in Bangalore would be about 1.67% of the middle class population. Bangalore's population is about 5.2 million. Of this let's be conservative and say that 25% are middle-class. That is 1.3 million of which 1.67% (21,710) would be Amway distributors. Beddoe reacted again. He said he didn't think that the total number of Amway distributors would be that many. (He even said that the number was less for a certain South Asian country.) I asked him if that number could be as low as 10,000. He said that was a possibility. (10,53,000 to 10,000 and we still don't have a number.) Then the chances of people making money is slashed because Amway themselves are suggesting that each person will sign up less than 2 other people on an average. Therefore, if some of them manage to sign up 226 people, many others won't sign up people at all. And if you divide this number—10,000, into groups of 226, then the total number of 'directs' in Bangalore will be 44. 10,000-44 = 9,956 Amway distributors who do not stand the chance of becoming 'directs'. Who will be among the lucky 44? You? I asked Beddoe to help me with this puzzle and apart from giving me philosophical discourse, he couldn't address the matter of numbers. All he said was that Amway distributors should sign up more and more people. Which brings me to me to my next thought. Why Amway Will Make Money Even If You Don’t Another interesting calculation: If 1.05 million people sign up, Amway will receive Rs. 4,422 million (Rs. 442.26 crores or US$ 110.55 million) in up-front cash from this ‘cash rich’ country. They will have earned all this money without having sold a single one of their very expensive products.What Is A Pyramid Scheme? China recently banned direct selling. The Chinese government defended its move on the basis that direct selling operations like Amway can easily turn into ‘pyramid scheme’ operations without thorough regulation.
In a typical pyramid scheme, people are obliged to buy over-priced products which they cannot return. The only way that the company makes money is by bringing more and more people into the network. The company makes money on their initial sign up fees. Such companies would not care if products are not sold, since the pressure to move products rests with the ‘distributors’. The distributors also are motivated to sign up more and more people because that’s the only way they can move any products. The danger of the pyramid scheme is that those who join later in the scheme are stuck at the bottom of the pyramid and have very little chances of making any money. But no one wants to believe that he is at the bottom of the pyramid. And the effort to sign up people far exceeds the motivation to sell others products from door to door. The Federal Trade Commission of the USA ruled that Amway was not a pyramid. The basis for its decision was that Amway encourages its distributors to sell products at a retail level. But The Advocate newspaper in the US reported that these rules are not enforced, followed, in fact, not even monitored. Suggesting that Amway is a pyramid scheme evokes considerable ire among Amway people. All of them parrot the standard Amway comeback that every corporation is a pyramid. The guy at the top makes more money than the bloke at the bottom. But in a commercial operation, that is any company, nobody takes money from all the employees as Amway does from all its salespeople.
Then, by some chance, if all these people actually manage to spend Rs. 1,500 a month on products, Amway will giggle into their bank manager's sleeves having earned another Rs. 18,954 million (Rs. 1,895.40 crores or US$ 473.85 million) on sales every year. Surely, the numbers I have outlined above are absurd. No one supposes that Amway will turn this kind of money around. But the significant thing is that these calculations are based on Amway's numbers, not mine. I seek to demonstrate from these numbers that no matter how many Amway sales people there are and how much they buy every month (even if they do not buy anything), Amway stands to make a lot of money from the initial sign up fees.
Because, for Rs. 4,200, you get about Rs. 2,000 worth of products. (It means they have sold Rs. 2,000 worth of products for Rs. 4,200) The rest, they say, goes towards giving you a 'business opportunity'. In addition Beddoe informed me that each year, distributors will have to "renew their contract". He wouldn't confirm the exact amount they will have to pay, but said it would be in the region of Rs. 1,200. So, the existing 6,500 people will give their American masters a revenue of Rs. 78 lakhs a year ... money for jam. One Amway distributor told me that if he did not buy products worth at least Rs. 1,500 every six months, he would be bounced out of the system. One Amway employee denied this. Another distributor said that the distributor I spoke to was "a bullshitter". (Frankly, I found it difficult to establish who should be believed.) If this is true, Amway stands to make about Rs. 2 crores a year from this minimum performance requirement. Add to this the number of others (in the entire country) who may have signed up and your guesstimate on Amway's profits is as good as mine. They could recover more than their entire capital cost in a quick manner with a hefty profit to boot, without any heartburn about selling products. If they were keen on selling products, they would appoint a number of sales agents who would knock on doors and sell individuals the Amway Dish Drops as an alternative to Teepol. This is what the honest 'dabba distributor' does. The cornerstone of my arguments is that this is a fair and just system only if each and everyone of the Amway distributors stands the same chance of making the same money. I wonder if those signing up realise that they will most likely be at the bottom of the heap and may not make any money at all. Is Amway a pyramid therefore? Again, time will tell. To refute this argument, some Amway salespersons told me that there are no guarantees in any business. Some will make it and some won't. This is the silliest argument where Amway is concerned. In no other business is every buyer propositioned to become a "distributor". And in no other type of business does the principal company take capital deposits from every buyer. If this mathematical argument is not clear in your mind and you still think that the system will work for everyone who signs up, you must be the guy who gave all his money to Mr. C. R. Bhansali.
How This Is Done At The Expense Of The Middle Class When I posed the absurdity of the numbers to a distributor, he replied: "Yes, your calculations may be right, but quite definitely, only a few people will succeed in the Amway business." Here's another way of putting it: Most people will fail in the Amway business. I have established that the only way to succeed in the business is to be able to sign up vast numbers of people and make them use the products for themselves. The other way is to run around peddling soap from door to door after having bought it from Amway at a discount. I cannot see any of the Amway distributors I met, ringing my doorbell to sell me Amway Gly-Honey hand lotion. Selling soap is infra dig. Selling hope is chic. The effect that this has on the middle class is unfortunate. Subjected to videos and presentations by the select few who have struck it rich, they believe that they, too, can strike it rich. In response, Steven Beddoe said that middle class people might have smaller ambitions (like buying a scooter or educating their children) and Amway will make their humble ambitions (my expression) come true. When I was waiting in the Amway office, I saw a lady signing up. The address she had filled out belonged to a building a few streets from mine. It was not a rich address, so I made a few enquiries. I learned that her family income is about Rs. 5,000 a month. She had just paid Amway Rs. 4,200. Clearly her monthly savings cannot be more than around Rs. 500 a month if she is lucky. And she had just bought herself a shampoo for Rs. 315 among other delights. She picked up her Amway cardboard-box of dreams and struggled down Airport Road towards the bus stand. I thought about the kind of individual who would sponsor a lady like this. What would the sponsor have told her? That she stood the chance of becoming a millionairess? That all she had to do was to smooth-tongue nine others into becoming Amway salespersons? That her life of abjection was over and that she now had the "chance to use world class products?" The barren truth is that what the lady had just bought gave her 'friend' 40 PV. (I have heard of someone else who was diddled for a few pieces of silver by a 'friend'. I cannot decide which is the greater greed, the greater treachery.) Her Rs. 4,200 has gone into the Amway system. This has added to the kitty into which the more fortunate will dip.
The fact is that in the USA, a more socially homogenous society than ours, it is possible for any American, from whatever background, to approach another American with a degree of confidence and talk about Amway or anything else. In India, as we all know, things are different. The lady I speak about would not be given the courtesy of a smile by most people I know. Our class-conscious snobbery would prevent them from standing beside her when the great achiever from the USA is shouting "Hooo Hooo Go Diamond!" into a hapless microphone. I imagine that she stands a snowflake's chance in hell of making it to the top of the Amway heap. All she now has is a bottle of world-class indeterminate substance which will make her glasses shine like crystal. And the dream that she is a favoured participant in the great American, now Indian, dream. So what if Bangalore is reaching saturation? All she needs to do is to pick up the phone and call her cousin in Coimbatore to sign him up. The trouble is that she does not have a phone. She cannot afford one. It is from the money of thousands of individuals like her that the zero sum society seeks its rewards. So What? So my opinion is that all of it falls to deception. Because all Amway sales people are made to feel that they stand the chance of becoming millionaires. This was energetically contested by one salesperson. She said that in the Amway sales meetings people are repeatedly told that some of them will not make it. I asked the Amway people if they said this at the time of signing people up. They said no. They were only an administrative people. Sponsors should take care of this. There is a dissonance between what Amway says (in general) and what Amway distributors say to their prospects. Steven Beddoe admitted there was this dissonance but told me about the reams of literature which Amway calls its Code of Ethics. All this is very noble, but Beddoe was not able to tell me exactly what mechanism Amway has to monitor and enforce these ethics across so many thousand Amway distributors. If things go wrong, Amway can hide behind their rule book and say that the distributors were wrong. Even during my research, Amway company officials said several times that I was "wrongly informed" by Amway distributors. To my mind, this is a dissonance which is convenient to Amway. But the greater dissonance is this: If Amway knows that only a few of their sign-ups will succeed, they are doing the gravest injustice to the Indian middle
class by taking their money and in return, selling them a little more than a hardto-fulfil promise.Typical Amway Defences “Amway will never saturate the population. There are only 2 million Amway people world-wide. A fraction of the population.” (Why? Obviously this means that Amway have failed to sign up as many people as the 9-6-3 scheme permits.) “Amway is a billion dollar corporation. Whatever you might say, they are successful.You can plug in to their system.” (Fact: Amway is successful by taking money from people. I challenge Amway to draw a correlation between the money taken from sign-ups and the volume of products they have moved through retail sales.) “If you have a bad impression about Amway,you’ve spoken to the wrong people.” (Right. That’s what Nazis say when denying the holocaust.) “Amway is perfectly legal” (So was C. R. Bhansali for a while). “Every major corporation is a pyramid.” (See “What Is A Pyramid Scheme”) “I met so many rich people at Amway. Surely such a rich guy cannot be taken in by a scam.’ (Sure. And has it occurred to you that he may have become rich by taking money from people like you?) “So many Fortune 500 companies have formed partnerships with Amway.” (These are not partnerships. Pepsi Corp doesn’t become a partner of Safina Plaza by having a vending machine there. Amway only vends Pepsi. They have not signed a partnership agreement.) “After all, Rs. 4,200 isn’t such a great risk. You get products for Rs. 2,000. “ (Not a great risk for whom? I would hate to lose Rs. 4,200. I would also hate to buy soaps for Rs. 2,000 even if they are “world class” soaps.) “If you think Amway is so bad, what do you have to offer me that’s better.” (Let me tell you. Work hard and get the hell out of everyone’s hair. My advise is this: Go Diamond... go away!) These are only some of the things that you may hear from the Amway crowd. The basic defence from people appears to be that they do not wish to hear that they may not properly assessed the significance of handing over Rs. 4,200 to Amway. As for the people who work for Amway, they serve their American masters well. After all, it does appear that we are genetically engineered to serve our masters well.
One distributor said to me that Amway gives him the opportunity to help someone. "Even if all people do not become millionaires, it will help at least a few. Some of them will make at least Rs. 1,500 a month. Won't they?" I contest the viability of even as small a sum as this. To make Rs. 1,500, he or she will have to sell at least Rs. 25,000 worth of goods. At the level of Rs. 1,500 usage per month, the sale of Rs. 25,000 worth of goods covers at least 17 families. Which means 17 more Amway distributors (unless he sells the soap door to door). Amway types often add product discounts to their potential earnings. It is silly to count discount on forced purchases as cash in hand. Therefore, my friend (who wishes to help the impoverished earn around Rs. 1,500 a month) must tell them that not only must they cough up the initial Rs. 4,200 but they must get another 16 people to cough up Rs. 4,200 each. And get everyone to spend Rs. 1,500 every month. This would be a considerable achievement for someone in an economic strata where he or she needs to earn Rs. 1,500 a month. Not to mention all the lovely PVs that my pal himself will collect from the person he is 'trying to help'. I believe that my friend's deception begins with himself and therefore spills over to his bottom dogs.And Who Is Bill Britt? From the experiences of friends I spoke with in the USA, what is more likely to appear on the Amway list of promises is promotional cassettes and books rather than more products. The promotional material is designed to help an Amway distributor "sell, sell, sell." The basis for this activity is propounded by American, Bill Britt. He and another American, Dexter Yager, run two of the most successful 'systems' under the Amway banner. It is said that about 90% of Amway's products move through these two systems. In India, what is being discussed is the Bill Britt system. The Advocate newspaper in the USA reported that to follow Britt's system is to spend hundreds of dollars a year on motivational tapes. Amway distributors are told that "spending money to buy these tapes is the key to building a large, successful Amway business." Therefore, it is likely that new products peddled by Amway distributors will not be more soap but more hope in the form of these motivational materials. One USA based distributor, an Indian (who has since left the business), told me that these tapes were meaningless and were sold to people by convincing them that weren't doing well enough. He said that the tapes would become an item for sale and Amway distributors will be selling them to each other in a self feeding frenzy.
I asked a Bangalore salesperson about this. He said: "Yeah, we've got that covered. We will buy one set and make many copies of it and pass it around for free. This is India, man." Exactly. That is exactly my problem with a business which makes people hand over their savings to Amway to buy themselves a dream and then try to create parallels between the growth of Amway and the growth of the church to justify themselves. Bill Britt is reported to be unashamed to use God to promote the Amway trade. He reportedly said once that he sponsors a system set in place by Jesus. "There was a man that sponsored twelve people 2,000 years ago and I'm in his group. Because he sponsored twelve and he taught us sponsoring, he now has one-and-a-half billion people in his organisation. So I think we have a pretty good precedent of what sponsoring is all about." (All we have is the Shankaracharya who keeps to himself most of the time.) Even with all the two- paise philosophy that foreign Amway distributors can throw at Indians, it falls to the sensible ones to try and understand the hidden agenda and separate the lure of lucre from the realities of returns. That may happen, if not immediately, then later. After all, this is India, man. And What Of The Products? Most Amway salespeople agree that the present range of 6 products is not sufficient to generate usage of Rs. 1,500 a month. They expect more products will be added. I asked the Amway officials when they would release more products, what products and at what price. One employee said he had absolutely no idea and wouldn't tell me anything even in the vaguest detail because he hadn't been told anything himself. I mentioned this to a distributor. It distressed him considerably and told me that he would call Amway "and give them a royal bollocking." How could he be made to wait to earn his PVs? According to the Bill Britt system (see box), he should soon retire to his counting house. Steven Beddoe contradicted his Bangalore office. He said that Amway plans to launch new products every 3 months. By August, a laundry detergent. By October, a hand cream soap. By December, a toothpaste. (Bye bye, Colgate Palmolive?) Another Mathematical Conundrum
In the course of conversation, Beddoe mentioned that Amway maintains Rs. 28 crores worth of product stock. I asked him how many months worth of inventory that represented. He consulted with his finance man and said, nine months. That works out to a sale of Rs. 3.1 crores per month. At the stated average of Rs. 1500 per Amway distributor per month, it works out to 20,667 users. A mere 20,667 Amway users for the whole of India? With many more people than that having paid up the Rs. 4,200? Summary If all Amway did was to manufacture and sell their products through door-todoor salespeople there would be no problem. The choice of purchase is left up to the individual. By asking for deposits from buyers —in the beginning and again every year— it looks like Amway seeks to build a captive consumer base. Once someone has paid Rs. 4,200 to Amway, he is naturally disinclined to buy Nivea hand cream instead of Amway Gly-Honey hand lotion. The element of personal choice is thus prejudiced. By involving their "distributors" in a complicated system of down-the-line commissions (which most of them showed no signs of comprehending), they are given the impression that there is a limitless market for Amway products. The truth is that the market share for Amway is as limited as the market share for any other product. Traditional retail trade is not about to collapse. And because of the expensive price structure, the growth of that market is restricted to the very wealthy. Calling this "an opportunity to use world class products" is a bit like calling the purchase of a Mercedes Benz for Rs. 25 lakhs an "opportunity", when an efficient Maruti 800 for one-tenth of that price will do nicely. With all these constraints, telling people of profit mechanisms tied into several thousand people buying Rs. 1,500 worth of Amway soaps every month seems laughable in a country where entire families lead their lives on less money. Transplanting an American operation into India is downright dangerous under the circumstances. The per capita GDP in the US is $26,980. The per capita GDP of India is US$ 340. (Source: Barclay's Bank Econ.Dept.) The cost of becoming an Amway distributor in the USA is US$ 120. In India, they have simply multiplied this by 35 and made it Rs. 4,200.I Have Seen The Light...And If You Haven’t, You’re Not My Friend
The parallel with an evangelist (with the light in his eyes who gives you unsolicited advice about Jesus,equally, the all-American Hare Krishna selling you the Bhagavad Gita) is inescapable. You can recognise him in a minute. His opening lines run something like this: "I have a wonderful way for you to make a lot of money with little effort." Tell such a person: "Oh, you're talking about Amway, aren't you?" And watch his expressions fail him immediately. He squares his shoulders and gives you complete attention. He is the Amway distributor.He is IN YOUR FACE. He looks directly in your eyes and gesticulates in your peripheral vision. You can't look anywhere but at him. Nothing matters to him but you. You are the next cog in his wheel of fortune. He expects that you will be lured into his web of promises. The promise that he has the ability to make you a millionaire. The promise that you will not just get a life but a lifestyle. That your good fortune can be willed to your children and that you and your progeny will live off what he will describe to you as 'residual income'. His evangelism is complete. I overheard one distributor tell his wife: "I think so-and-so will soon become a convert." His ability to make money depends on your signing up. Your ability to make money depends on who you can get to sign up and thus the web expands. In Bangalore, the growing tribe of Amway salespeople have inspired all kinds of emotions in non-Amway distributors. The 'I-have-seen-the-light' evangelism is all but alien to our society and it inspires dread in many. Writer Ajit Saldanha said: "When I see an Amway salesguy, I leap like a nimble mountain deer out of his path." Hotelier Rishad Minocher said: "I laugh at them. At least a few dozen people have tried to 'convert' me." A fashion designer said of her friends: "They get very excited about this whole thing. But it's not for me. I will not be seen selling detergents." Another lady working for a media relations company complained that one of her colleagues has all but stopped doing any office work: "He uses the office phones to prospect for Amway business and ties up all the lines. Normally a very dumb fellow, he is emotional about Amway and his own livelihood matters to him no longer." US$ 120 does not represent anything close to a risk even for lower income Americans. Rs. 4,200 exceeds the monthly income of most Indians. And a 250 ml shampoo for Rs. 315 is unspeakable for all except the richest among us.
One Amway employee said that they did not want the Indian middle class to get hurt but that Amway could not possibly check into the economic background of every sign up. Bullshit. Even small finance companies in India have the mechanism to look into the backgrounds of their borrowers. That is because they themselves would get hurt if the borrower failed. The reason Amway does not look into the background of their distributors is because Amway will not get hurt if the distributor fails. (They are taking his money up front). Quite correctly, I think, Amway should not worry itself about the fate of people who willingly sell the family silver to become Amway distributors. After all, who is anyone to say that the Indian middle class knows not what it does. (Steven Beddoe made the gratuitous offering that he felt Indians are not dumb people.) And what Amway is doing is to tell all their prospects that they could make pots of money. But with the full knowledge that many of them will not. The Latin phrase 'caveat emptor' simply means 'let the buyer beware'. But what if nobody is a buyer and everybody is a seller ... with soap in their hands and hope in their hearts?
Sources for my story included these websites: http://www.jps.net/jasong/ http://student.uq.edu.au/~py101663/miscult/scamway.htm http://www.awod.com/gallery/rwav/slarsen/amway.html http://www.willynet.com/rglasser/amway/ http://members.jlee.com/midgett/ http://www.theadvocate.com/news/story.asp?StoryID=887 The Yahoo search site is: http://search.yahoo.com/bin/search?p=amway Or look up this newsgroup: Newsgroups: alt.business.multi-level
Most of what you read on the Net against Amway (from the USA), is about the evils of 'social engineering' —how Amway sales people are brainwashed and try to brainwash others. While much of this appears to have relevance to India, our story rests on the economic evil since that is the greater danger to our country.
The Amway Aftermath
RAMJEE CHANDRAN A few days ago, Noor Hussain Sait of Variety Book Stall told me that one Amway distributor had told him that I ‘hid’ the fact that people can get their money back from Amway. I wasn’t hiding it. I did not mention it because I thought that all prospects were informed about this. I now find out that this is one valuable piece of information that several people, who had paid Rs. 4,200 to Amway, were not told or did not understand clearly. One lady, a beautician, said her sponsor had not told her this and she was livid. Two others lamented that their 90-day time limit had passed. (Many people also asked why I had not written the piece two months ago.) To set the record straight, I now give readers the information that they can get their money back from Amway. Steven Beddoe — Amway GM who had earlier called me from Delhi — said that (1) they will refund the entire amount within 90 days whether or not the products have been used; and (2) he also said that after 90 days, people can get back the Rs. 4,200 less 30% of the value of the products if returned within their shelf life. There it is. So, not to worry, you can get all or some of your money back any time you want before or after the 90 day limit according to Steven Beddoe. As soon as the June issue was released in the market, the phone started ringing. It almost did not stop. Most callers said that they were “saved” by the story and that it helped them clarify their arguments against people who were interested in signing them up as Amway salespersons. Some others seemed upset and a few threatened me with legal action and of course, violence. Simultaneously, the letters began pouring in. The sentiment was the same as the callers. We have printed only a selection of these letters. Some others will be printed in the next issue. I have printed ALL the pro-Amway letters received by the cut-off date against only a few of the anti-Amway letters. Everyday, the mail box (snail mail and e-mail) is inundated with letters. I have a request. Please don’t send me any more letters in response to the June cover story because we are a publication with modest resources and simply cannot handle the volume. However, my sincere thanks to all those who chose to respond, whether pro or anti.
The most touching call I received (late one evening when I was alone in the office) was from one lady who broke down and wept on the phone. She said she felt that she had cheated her ‘downlines’ and said she couldn’t sleep. She said that she was going to sell some of her possessions to return their money. I told her there was no need to do that because Amway said they would return the money. I also explained to her that I did believe that neither Amway nor their salespeople were cheating anyone. My argument was simply that I believe that the Amway proposition works only for very few people and of course, for Amway themselves. Another call which disturbed me was from another lady who told me that an autorickshaw driver in her neighbourhood had become an Amway distributor. He had been signed up by a noted, upper class Bangalorean. Now, from our ‘Salaries’ story (May 1998), I learned that auto drivers earn around Rs. 2,500 a month if they are lucky. I wonder if this guy pawned something to pay Amway Rs. 4,200. Apparently, he was telling people that he would soon be making Rs. 40,000 a month. This time, it was I who nearly broke down and wept. Another set of responses talked of companies like Green Gold, Japan Life and others who, they say, run operations similar to Amway. We are investigating these. Meanwhile, Amway wrote to me. I replied to them. I have not printed their covering letter, nor my reply, for want of space and for fear of repetition. However, I have printed their rebuttal in full, unedited, and with my comments. (Read it with a copy of the previous issue.) Readers will notice that Amway have failed to answer my mathematical arguments. Simply, if the growth of the numbers of distributors is as small as Amway said it would be, how will the new entrants make money without signing up more people? And from where will they sign them up? The story is far from done. From the incredible responses I have received from all over India and abroad, the USA mainly, there are a few more aspects of the operations that have cropped up. I will soon start to work on these and when my research is complete, you’ll read it. Notably, The Advocate newspaper in the USA reported that Procter & Gamble have filed a suit against Amway for running a pyramid scheme. The case, I understand, is still in court. The essence of a pyramid scheme, as I understand it, is that the operation should not develop only on the basis of signing up fees. Then this becomes a simple money chain. In order not to be a pyramid, Amway distributors must actually sell products to non-Amway people. I raised a challenge to Amway in my last story to produce the details of sales of products ... obviously, other than those sold with the business kit.
My words were “I challenge Amway to draw a correlation between the money taken from sign-ups and the volume of products they have moved through retail sales.” Amway have not responded to this challenge or mentioned it in their rebuttal. I again request Amway to make this information available. Even some of their distributors have asked me to raise this. I also request them to answer the questions I have raised in my subsequent letter. More on that as it develops. Meanwhile, all I can say to my readers is a heartfelt “Thank you.”
AMWAY’S REBUTTAL AND OUR RESPONSE
In their rebuttal, Amway had extracted a few words instead of the entire para. For this rebuttal to be read in the proper context, you will need to read the story again. Because we cannot either link or reproduce the entire paragraph/s in question, we give their rebuttal in full, with Ramjee Chandran's comments in bold text, following each para of rebuttal. The rebuttal has not been edited. (Any typos are inadvertent). Multi Level Marketing is not network selling, pyramid selling, a chain of letter of a lottery ticket. Multi Level Marketing companies sell products through independent distributors as an alternative to the traditional approach of hiring staff, advertising etc. distributors in turn train new distributors to expand the marketing network, offering personal service and demonstrating products to consumers on an individual basis. Amway has been endorsed by US Federal Trade Commission. It has been acknowledged by govts. across the world as a role model of Multi Level Marketing. The hallmarks of a Multi Level business like Amway are: Equal opportunity, irrespective of when you join; distributorships are not for sale; product training provided by the company; no need to maintain inventories; low start-up costs; pay only on product sales in direct proportion to effort; buy back both stock & sales kits; success earned by repeatedly retailing products to consumers, sponsoring others to do the same; Offer international quality products; Follow World Federation of Direct Selling Associations (WFDSA) Code of Conduct. In sharp contrast, pyramid schemes: Offer unequal opportunity; Sell distributorship; require large inventory purchases; involve high initial costs; pay for recruiting; don’t buy back stock or sales kits; solicit people to buy success by buying inventories/titles; offer questionable products; will collapse when no more people can be lured. A brochure from their local office says their scheme is ‘network selling’. Not explained: The basis of the pending lawsuit against Amway in the US? (Source: “The Advocate.”) In Multi Level Marketing business like Amway, there is no top/bottom. Performance alone dictates distributor status. “working hard” is not just sponsoring new distributors. It is that + selling products. The article itself says “the lower the quantity of purchase, the lower your commission”. Most salespersons in the city say that if you sign up you don’t really need to sell soap. Not answered: My earlier question to explain the criterion to determine minimum sales to avoid becoming a pyramid.
Success depends on performance, on sponsoring and retailing. On people helping others help themselves. The opportunity is equal for all. But as in any human endeavour, there will be success and failure. They have only repeated what I have said. Not answered: Why do they take capital deposits from everybody? An Amway Distributor can sponsor people anywhere in India/the world. He/She is not limited to one city. Not answered: Except for the very rich, who can do this? Amway has made no such comment. Chance to make money depends on entrepreneurial drive, personal skills/ability and initiative. Amway offers an opportunity to be exploited. It is up to the individual to chart own course. Is the Amway GM now denying that he told me the max. no. of distributors would grow to around 10,000? Not answered: By how much will the 9-6-3 scheme grow from the present level of 6,500 salespersons? The Rs 4200/- charged for every Business Kit covers a variety of costs: the products, dispensers, forms. literature, business newsgrams, Amagrams, training programmes, subscription cost for 18 months. Production & mailing of monthly statements, courier of cheques. Amway has already invested over US$ 25 million in India and is scheduled to invest US$ 20 million more. Money has gone into setting up 3 local manufacturing facilities with state-of-the-art technology. Hiring a staff of over 200, operating in 5 metros, servicing 150 towns, sponsoring community development programmes . Any marketing company has these expenses. Which other company takes money for stationery? All Multi Level Marketing companies sell business opportunities to distributors unlike companies, which merely offer employment. Amway salespeople are not employees. They are independent entrepreneurs. Multi Level Marketing companies like Amway appoint Distributors who sell through a network of people they know on a personal basis. Specious argument. The comparison with corporations was from Amway salespeople. Not answered: How exactly is retail sales encouraged? This is an unfair and incorrect assumption. Over 3 million distributors and 450 products are proof of the viability of the Amway business. The majority of Amway distributors sell products. I maintain that if they say “only a few will succeed”, it means that “most will fail”. Not answered: Will Amway make public its ratio of ‘directs’ to total numbers of distributors? This is a wrong allegation. All Amway distributors are explained the business opportunity; they set their own goals, decide their own workplans and reap benefits on that basis. No one is promised millionaire status, everyone is appraised of the business potential and the way it operates.
It was no mere allegation. I repeated exactly what I heard. But Amway distributors said materially different things to me and since they are the people talking to prospects and that is mainly how the scheme gets explained. This is the dissonance I imagine is convenient to Amway. All Amway Distributors are accountable to the company. They are mature, responsible, trained adults. At the time of adopting the Amway opportunity, they sign and agree to abide by our rules of conduct and code of ethics. Rules are enforced by a variety of measures, upto and including, termination of the Distributorship. Amway’s Rules of Conduct are aligned with WFDSA Code. Amway is a founder member of the Indian Direct Selling Association (IDSA). One of the IDSA’s objectives is to “Protect and promote the interests of consumers”. The IDSA has appointed Justice Rege of the Bombay High Court as its Ombudsman & Code Administrator. Not answered at all: Does Amway have a mechanism to monitor and enforce the ‘Code of Ethics’? One ombudsman will do all that? Amway is a serious, viable business opportunity. The Amway business plan has evolved over 35 years and the Amway sales & marketing plan has revolutionised the direct selling industry since 1959. The essential attributes of an Amway distributor are an entrepreneurial spirit and a desire to work hard towards achieving goals. Prospective distributors are encouraged to make an informed choice before entering the business. (Emphasis ours). Distributors enjoy a high degree of support from the company as well as their sponsors. In addition distributor interests are safeguarded at all times. Those wishing to discontinue their relationship with Amway, can do so at any time. If this is done within a 90 say period from the date of joining, they receive a refund on the investment of Rs. 4200/-. It is easy to get in/get out of the Amway business. The Amway business opportunity offers maximum flexibility to distributors. Who encourages prospects to “make an informed decision?” Not their distributors from what I witnessed and heard from first-hand sources. Then why did hundreds of people call to say that they had not been told what I had written in my article? To buy or not to buy a product is a matter of individual choice. How can purchase of a particular product prejudice personal choice? On the contrary one prefers one product over the other by exercising personal choice. Once someone has paid a hefty capital deposit, will he/she buy a product other than from Amway? This statement contradicts the one made earlier “...the only way to succeed is to make vast numbers of people use the products for themselves.” An Amway distributor has to sell. It is incorrect to imagine that a company as large, and as diversified as Amway, could sustain itself for almost 40 years, operate in more
than 80 countries, match stringent and diverse government regulations, sustain over 13,000 employees, invest in over 450 products, and progress in its career without a strong accent on sales. I have not denied that Amway Co. will be profitable. In fact, it is on that very basis that I made the statement that the fortunes of Amway, and the few distributors who make it, are at the expense of the many who might not. Amway’s statement is not a rebuttal. It is a confirmation of my stand. I must thank Amway for this. Amway is a people centered business which touches millions across the globe everyday. Yet our company and the industry are not fully understood. Whilst we are supporters of expression, we are anxious to see the same standards that society applies to other media, applicable to the Internet as well. The Internet remains an open platform, which is often misused to address personal agendas. If an individual is serious about forming an opinion independently, and not being fed on other’s interpretations he/she should also visit the Amway sites on the Internet. The Amway Global site can be accessed at www.amway.com. This will present Amway’s perspective. Clearly, what I asked readers to do would lead them to the Amway site. After so many years and “touching so many people” (an expression which I consider apt), if they are still so misunderstood, it tells you something about the dissonance. Amway products are not expensive. All Amway products are defined by their highly concentrated formulation and multi-purpose usage, which promises value-for-money, the high quality standards of Amway products exceed consumer expectations. Comparable products do not exist in India. The comparison is meaningless. Besides world class quality, another unique feature of Amway products, which no company in India offers, is a customer refund policy. An example of Amway’s customer service is that all products are delivered and demonstrated in the comfort of their homes. Comparable products do not exist in India? Is a 250 ml shampoo for Rs 315 “not expensive?” And "Comparable products do not exist in India" ... is this some commercial arrogance?
Accolade & Acrimony
LETTER OF THE MONTH You were right on target. I used to be an Amway distributor, and in fact worked for my upline Diamond for nearly five years before the deceptions and fraud became too obvious for even this dedicated fool to overlook. What opened my eyes? A combination of things. As part of my job, I attended several “country openings.” At the first one I attended, I have vivid recollections of the person who was then head of Dexter Yager’s international development commenting to me, “my mandate here is to sell tools.” That was when the penny dropped and I finally realised that the priority of the “big pins” was not building an Amway distributorship — it was using Amway as a recruiting front for their motivational tools business. In the country of Colombia, which I’m sure you know is very impoverished, people were taking out bank loans to buy their Amway Business Kit. In the past five years, Amway has opened in many impoverished countries: Costa Rica, Honduras, El Salvador, Panama, Uruguay; Romania, Czech Republic, Poland, Slovakia, Slovenia, and Hungary; and of course, China and now India. North American diamonds brag on audio tapes about the “dedication” of recruits in these countries. One tape I listened to not long ago talked about a Honduran who rode on horseback from the mountains for 75 miles, and then in the back of a pickup truck for another 50 miles, to come into town for an “Introductory Seminar.” Now, I ask you, what realistic hope does someone who lives that remotely, have of building a successful business? The diamond I worked for in 1996, the last year for which I have complete information, derived only 4% (yes, you read that right, FOUR PERCENT) of his income from Amway itself. In a recent three-part article in the Baton Rouge, LA “Advocate,” a diamond claimed his income from tools barely covered his secretary’s salary. Well, if that’s true, he must have applicants lined up for miles for that million$ -plus annual salary!!!! Amway distributorships are slipping in North America, down in the last two years from over 1 million to only 700,000. Hence their eagerness to expand into new countries. The diamonds don’t care at all about helping people in other countries become successful Amway distributors. They just want lots of recruits who sign up for Standing Order Tape. In my opinion, as someone who knows the business from the inside, India would be better served if they followed China’s lead and booted MLM out of the country. It is indeed a social evil, causing people to prey on others for financial gain, and causing tremendous rifts among families and friends as distributors manipulate their personal relationships for personal gain.
Nomore Scams You drive the point home. Being in the US I have had several encounters with these Amway preachers so I can vouch for what you are saying. Keep it up. Amoghe If I cannot thank someone who could potentially save millions of poor middle class Indians, my life is in vain. Niranjan I have just read your cover story Amway. And you know what? I am on my way to the florist to check the cost of a garland, the value of which I would gift a needy person (which is how you celebrate your anniversary isn’t it?!). I suggest you bring out a separate hand out/pamphlet or supplement so that you expose this scam and wake up innocent middle class dreamers who are sleep walking into Uncle Sam’s Coffers or should I say Uncle Scams Coffers. Keep it up! Ismail Sait, Magrath Road I am really impressed with the excellent quality of the article’s presentation, content and background. Jacob John I take my hat off to this American ability to sell products and services worldwide. I am surprised that even the elite Bangaloreans fell prey to this so called marketing concept of the next millennium. Or, are we in a fantasy to believe that the “Made in USA” label means quality?! Mathew George, St. Thomas Road I am Charles Midgett, author of The Other Side of The Plan. Let me first say that I am impressed with the detailed investigation that you performed to get actual facts for your article. You obviously went to a lot of effort and it shows in the quality of your article. By the time you read this, I will have added a link to your website. People from all over the world need to read what you said. Charles How refreshing and satisfying to read such an accurate and lucid expose on the so-called great Amway opportunity. The article is extremely detailed and wellresearched and I was totally immersed from beginning to end. That said, I would like to point out that a most crucial aspect of the deceptive practices of
motivational leaders was essentially missing from the article: the truth is that anywhere from 70 to 90 percent of kingpin Amway distributor riches comes from the sale of motivation and the illegal “Amway Buying Club” (BUYING of Amway products by Amway distributors for PERSONAL USE instead of retailing). Ramjee, it is so very crucial that the Indian people understand this colossal deception. I would love to start a dialogue of any kind to help save the Indian people from this most egregious and predatory enterprise. Ashley Wilkes Author of “Amway Motivational Organisations: The Nightmare Builders (http://www.tc.umn.edu/nlhome/m307/wilke001/amway.html) Whew! Ramjee Chandran’s scintillating article on Amway-Scamway is Pulitzer Prize material. Of the highest quality and a great piece of public service. Here in the USA, people take a step backwards when a person tells them that he or she is associated with Amway! Bangaloreans, you’re better served avoiding this one way trap! Perryn What a masterpiece. I encourage you to submit this work for a PhD dissertation to one of the top business schools in the US. I threw away about 275$ to get an Amway representative out of my tail. Arms You should be conferred the PhD (considering) the quality of this article. I am a retired GM of Indian Airlines and also a Prof. of Management. Prof. Ken Joseph To criticise your article in seven words: “You could not have said it better”. Please keep up the investigative journalism. Muthu Vairavan I am including the link to your Amway story from my site http://www.nagpurcity.net Thanks for a great story and public service done as a lot of people in Nagpur as well are getting lured. Tarique I have added link to your Amway article from http://www.mahesh.com. B. G. Mahesh, USA
I have lived in the United States for over 8 years now, and in fact a few of those years were in Grand Rapids, Michigan., (near) where the Amway world HQ is located. I have several comments to make of this company, having known about it. I’ll never forget one of the basic, fundamental truth, as they say here, ‘There is absolutely no free lunch. Somebody, always pays’. Amway is owned by these two families, who practically own the whole town of Grand Rapids among other things. DeVos and Van Andel, two gentlemen in their late years now, are multi billionaires, and one of the top 20 richest men in US. But as for the rest of the ‘millions of world-wide’ Amway distributors, god help them. Amway Asia and Amway Japan are publicly traded on the New York Stock Exchange. The stock market has been on a record bull run for the last 3 or 4 years and almost every company stock has hit the roof. If Amway is so successful, why is it that these two stocks are languishing at their all time lows ? Your simple, really elementary math proves that it just doesn’t work, or works for very very small number of people. Why is it that a world class multi billion corporation is not able to give answers to these simple questions and instead blames it on lack of hard work and faith and sour grapes and other excuses ? I hope someone in the government sees the light just like somebody did in China, for the good of everyone involved. Naren Nayak This American company is (taking) the Indian middle-class for millions of dollars for Uncle Sam. You must have come across another (scheme) by the name of Japan Life which sells Rs.80,000 mattresses with multi-level marketing spiel. Penta Your estimate was 44 (‘directs’), but I would say (only) 5 out of those distributors will become lakhiers (not millionaires) in the next five years. That’s my estimate. I am no longer a member of Amway now, because there are other ways of getting essential items at the wholesale prices, in the USA. Rajasekhar I Quit! I joined under a Indian guy. They initially told me that all I need to spend is 5 hrs a week. But after sometime everybody above pushed me to sign up new people. I found myself talking on the phone all the times and my friends also started avoiding me because of the harassment. My wife started quarrelling and I finally quit. My life is back to normal now. C Raghavan
I bid farewell to Amway. I would urge you to forward your analysis to RBI and FDI Regulation Board in Delhi so that Government can take some action (Like China) against Amway and stop India losing hard earned middle class money to this US company. Psaraph Here in the US (I live in San Jose, California.) there are a lot of Indians who are Amway distributors chasing the dream of becoming millionaires. I sent your article to few of them and their reaction was, “Oh God, why didn’t I think like this before?” Raghavendra Bhagavatha I realised I made a wrong decision by joining AMWAY I corrected the mistake and I got my deposit back. Now, I encourage people not to dream of making millions based on someone else’s failures. Eileen A Chandler I had to chose between friendship and $120 (in USA). Your article is excellent and I hope it will change the minds of at least a few balanced thinkers. Bhaskara Reddy Thanks for the coverage. Luckily my friend and myself had the good sense not to get involved. Must have done something good in my young life so far for this crucial escape. Rajesh Shedde Your article has really clarified a lot of questions and has helped me make up my mind to fight against this evil. Seema Sureka Ban it! I wholeheartedly agree with your analysis. Can’t the government of India do something similar to what was done in China? Or do our politicians already have a vested interest in this horrendous scheme! Is anything being done to widen the article’s distribution within India? Mamata Bhopatkar Is it possible to make the Government ban Amway in India. Can anything be done about this? Jeydev Rajamini
Beware of Smiling Indians I was new in USA and one afternoon waiting in a queue in post office. One Indian lady of age 28, was staring at me. She said “Hi” and asked me about my age, my married status and my job. I thought she was attracted to me. I was pleased. I asked the same questions to her. She informed me that she is unmarried and staying alone. I was excited as I am single, looking for girlfriend in new land. After two weeks, she asked me for dinner in an Italian restaurant. She informed me that she has a wonderful business opportunity for me and that she is really impressed with my personality. I was really excited as I found one girlfriend with good resources in a foreign land. After one week, she invited me to one business party. Next day, one gentlemen came with her to my apartment. He told me about Amway and said that he had made lots of money. Only after I signed up, I figured out that it’s on my head to find new members and cover my money. Also I found out that the young lady was married. She was doing a job like a prostitute to make new member for Amway. Particularly in India, people are (too) emotional in relationships to say no. It is in your kind of journalist’s hand to make people aware that this is the system which will eat away all friendships, relationships and make people so much selfish that Indian culture would not be the same one. Alpa R. Shah As you mentioned there are good sides and down sides to (Amway). The down sides being more. In the US we have become used to people accosting us in Shopping malls etc. with the standard question “Do you want to make some money?”. This question is usually answered with “Are you from Amway ?”. Many people here are disgusted with Amway and the lengths to which people will go to recruit new people. Kushalappa Baduamanda I have been approached by at least 10 people when ever I go to shopping complexes. They always do one common mistake. They all try to be friendly, or strike a conversation. The first thing I ask them is “Hope you are not an Amway” Venkatesh Neelakantan (Amway distributors) all have one thing in common; ‘Greed’. I had seen people using their wife as a bait. They open a communication link, then the hubby jumps in and start the dialogue. These girls, educated, charming, goodlooking ,smile at potential prey (I have seen these kind of girls at Bombay Fort, but they sell different things). Pannakal
I have seen some Indians / Americans brainwashed and go with their wife to please the people, saying lots of stories. We look down upon them in the US. Muralidhar Subbaraya A simple outing like going shopping has become a nightmare for the rest of us, as we avert our eyes from every Indian who smiles at us. M Sriram Publish it Everywhere I fully endorse all your views. I live in the US and I was startled ... even a small city like my native place, Tirunelveli, has an Amway office. If your article can be reprinted in one of any popular local media there, I would like to help to make it happen. Ajeyakum I hope this article is published in all the local newspapers in different languages. Having come from a middle class family, I would hate see someone’s savings (in many cases it may be out of their provident fund, etc.,) thrown out. Ramki Ramakrishnan My heart aches to know that so many hundreds of people are signing for Amway not knowing the complicated structure and their logo “working hard”. Please print the article in several Kannada magazines, so that many can read the article in local language. Lakshmi P. I thank you for the initiative that you took in educating the innocent people. If there’s anything I can do I am willing to do. Please publish your article in all magazines and newspapers in India. Raju.Chidambaram I hope you can get this article published in our regional newspapers like Prajavani, Deccan Herald etc.. This story should be told to the Indian Public before they are fooled by these idiots who are into Amway. I stay in Chicago. I see lot of my fellow Indians who are Amway businessmen/women. They just plainly disgust us here. They are worse than a “cult”. Madhu
We Love Amway As an Amway distributor in the USA and one that is not making money out of it and one that is not actively involved in it, I strongly disagree with some of your comments. Bill Britt is better than some of the fools that we in India call swamis. Please research a little better before throwing your litter all over the globe. Radharam A great pity on your poor soul. It is obvious how you were brought up & educated—by looking at all the negative aspects of everything - You ‘ll see everything in yellow colour if you look thru a coloured (yellow) glass. PITY on you. A person with a broke mentality cannot show another person how to be successful! Mohan P I am a very successful Amway Distributor in the USA. It is very easy to criticise everything in this world!. Even Mahatma Gandhi was criticised. If (Amway was) so bad, why would corporate America try to partner with Amway! Because of the Britt System my self-confidence has increased, my marriage has become a lot better, I have seen tremendous internal growth. So I am not upset at what you wrote! Ssringari And Finally If somebody seems too polite, and approach you with a “business proposal” believe me they are from AMWAY. Remember what our elders said, “Ati Vinayam Doorth Lakshanam”. Nitin Kulkarni Thank you for providing this important and valuable public service! This article is simply, “the whole story”! It is TOTAL EVIL for purveyors of Amway to attempt to tie their CORRUPT system to the Name and Personhood of Jesus Christ! They deserve the TRUTH about them being brought forward to the public. They need to RUN from these CORRUPT and EVIL people! I an certain you are coming under attack as all of us do who TELL THE TRUTH about this EVIL EMPIRE! Kenneth Lowndes A family member is becoming embroiled in the Amway mind-control and I am attempting to learn how to best handle it, as they are apparently known for telling people to divorce themselves from “dream stealers” who might speak ill
(THE TRUTH) about the company. As your article states, the emphasis is not on selling product. It is on recruiting people. Again, great article. Thank you. Name withheld