WHAT’S SO UNIQUE ABOUT AMWAY?

 Global leader in the $102-billion direct selling

industry
 More than three million Amway Business
Owners
 Operates independent businesses in more than 80
countries and territories
 Employs 13,000+ people worldwide
WHAT’S SO UNIQUE ABOUT AMWAY? (CONTD..)

 ABO’s can market products directly to potential

customers and recruit train other people who
become IBOs
 IBO earnings – retail markup + performance
based bonus based on sales volume
AMWAY’S SUPPLY CHAIN
Raw Materials

Amway Manufacturing and Distribution

ABO’s

End Consumers
DISTRIBUTION MARGINS
 Amway business owners (ABOs) can earn income and
other incentives in a variety of ways
 They fall under the categories of:
 Retail Markup

 Volume Rebates

 Leadership Bonuses

 Higher Awards and Incentives

HOW THE DISTRIBUTION CHANNEL WORKS
Amway

ABO 1

END
CONSUMER SPONSOR

ABO 2

SPONSOR
END
Every ABO & Sponsor has to CONSUMER ABO 3
register with Amway
RETAIL MARK-UP

 ABO’s can buy products directly from Amway at

wholesale prices and sell them at retail prices
directly to customers or add a mark – up and sell
them to other ABO’s. the difference is earned by
the ABO
 The retail mark–up for Amway is 20%
 VOLUME REBATES PV BV
Rebate (%
of BV)
10,000+ 5,00,000 21%
 Every product is allocated a Point
Value (PV) and a Business Volume 7,000 3,50,000 18%
(BV). The PV is used to calculate the 4,000 2,00,000 15%
rebate percentage earned
2,000 1,00,000 12%
 The BV is usually close to the
wholesale price of the product less 1,000 50,000 9%
any sales tax 300 15,000 6%
 The rebate paid is calculated by 1PV = 50 BV
multiplying the PV rebate
percentage by the total BV
Approximately every family requires products equivalent
to 100
PV per month.
EXAMPLE
 Let’s presume that you have 2 friends, who are interested in buying Amway
products and you make them your customers. So in order to meet the monthly
requirements of your own along with your friends you can easily sell products
worth 300 PV

You
Personal use 100 Total sale 15000
PV Retail profit 3000
margin @ 20% of
personal sale
Commission 900
earned 6% of
Customer1: Customer 2
total BV
Sale:100 PV Sale:100 PV
Total amount Rs.3900
earned

300 PV = 15000 BV
6 % Rebate On final volume
Leadership Bonuses and
Higher Awards and Incentives.
 Performance Bonus
 Commission
 leadership bonus
 4 % leadership bonus for a sponsor whose
down lines have become direct distributors
 Recognition levels
 Silver
 Gold
 Platinum
 Diamond
ADVERTISING AND COMMUNICATION STRATEGY

 Portfolio of over 450 products, backed by strong

R&D
 Promoted 3000 products through catalogue sales
 Utilizes media advertising to promote its products
in India
STRATEGY IN INDIA
 Put stickers on its products clearly indicating the number of
usages very clearly
 Incentives to cost and freight agents who deliver parcels in
the same city within 48 hours, outside - 72 hours
 Tap unemployed youth in smaller towns by subsidizing
entry fee for the starters’ sales kit
 Introduced value-for-money ‘chhota (small) packs' in
December 1999
 Indianisation – ‘Hamara Apna Business’ slogan
 ‘Operation Gaadi' and ‘Operation Ghar