Amway
Amway Corp. is an American multi-level marketing company that sells health, beauty, and home care products. The company was founded in 1959 by Jay Van Andel and Richard DeVos and is based in Ada, Michigan. Amway and its sister companies under Alticor reported sales of $8.9 billion in 2019. It is the largest multi-level marketing company in the world by revenue. It conducts business through a number of affiliated companies in more than a hundred countries and territories.
Amway has been investigated in various countries and by institutions such as the US Federal Trade Commission for alleged pyramid scheme practices. The company has paid tens of millions of dollars to settle these suits. In 1983, Amway admitted to defrauding the Canadian government of customs duties and taxes by falsely undervaluing goods it imported into the country over a period of 15 years; it had to pay a fine. Between 2007 and 2008, Amway was found guilty of illegal business practices in India, a ruling upheld by the Supreme Court of India and followed in 2021 by India's Enforcement Directorate attaching company and bank assets, identifying Amway's business model as a pyramid fraud and its product offerings a masquerade.
History
Founding
Jay Van Andel and Richard DeVos had been friends since school days and business partners in various endeavors, including a hamburger stand, an air charter service, and a sailing business. In 1949, they were introduced to the Nutrilite Products Corporation by Van Andel's second cousin Neil Maaskant. DeVos and Van Andel signed up to become distributors for Nutrilite food supplements in August. They sold their first box the next day for $19.50, but lost interest for the next two weeks. They traveled to Chicago to attend a Nutrilite seminar soon afterward, at the urging of Maaskant, who had become their sponsor. They watched promotional filmstrips and listened to talks by company representatives and successful distributors, then they decided to pursue the Nutrilite business. They sold their second box of supplements on their return trip to Michigan, and rapidly proceeded to develop the business further.Earlier in 1949, DeVos and Van Andel had formed the Ja-Ri Corporation to import wooden goods from South American countries. After the Chicago seminar, they turned Ja-Ri into a Nutrilite distributorship instead. In addition to profits on each product sold, Nutrilite offered commissions on sales made by new distributors introduced to the company by existing distributors—a system known as multi-level marketing or network marketing. By 1958, DeVos and Van Andel had built an organization of more than 5,000 distributors. However, they and some of their top distributors formed the American Way Association, or Amway, in April 1959 in response to concerns about the stability of Nutrilite and in order to represent the distributors and look for additional products to market.
Their first product was called Frisk, an organic cleaner developed by a scientist in Ohio. DeVos and Van Andel bought the rights to manufacture and distribute Frisk, and later changed the name to LOC. They subsequently formed the Amway Sales Corporation to procure and inventory products and to handle sales and marketing plans, and the Amway Services Corporation to handle insurance and other benefits for distributors. In 1960, they purchased a 50% share in Atco Manufacturing Company in Detroit, the original manufacturers of LOC, and changed its name to Amway Manufacturing Corporation. In 1964, the Amway Sales Corporation, Amway Services Corporation, and Amway Manufacturing Corporation merged to form the Amway Corporation.
Amway bought a controlling interest in Nutrilite in 1972 and full ownership in 1994.
International expansion
Amway expanded to Australia in 1971, to parts of Europe in 1973, to parts of Asia in 1974, to Japan in 1979, to Latin America in 1985, to Thailand in 1987, to China in 1995, to Africa in 1997, to India and Scandinavia in 1998, to Ukraine in 2003, to Russia in 2005, and to Vietnam in 2008.In 2014, a Russian loyalty card program called "Alfa-Amway" was created when Amway joined with Alfa-Bank.
Amway was ranked by Forbes as the 42nd-largest privately held company in the United States in 2018, and as the number one largest company on the Direct Selling News Global 100 list in 2018.
In the United States, the firm has a "much smaller" profile than it once had, and has posted a web page answering the question “Does Amway still exist?”.
Quixtar
The founders of the Amway corporation established a new holding company in 1999, named Alticor, and launched three new companies: a sister Internet-focused company named Quixtar, Access Business Group, and Pyxis Innovations. Pyxis, later replaced by Fulton Innovation, pursued research and development and Access Business Group handled manufacturing and logistics for Amway, Quixtar, and third-party clients.The main difference was that each "Independent Business Owner" could order directly from Amway on the Internet, rather than from their upline "direct distributor", and have products shipped directly to their home. The Amway name continued being used in the rest of the world. Virtually all Amway distributors in North America switched to Quixtar, prompting Alticor to close Amway North America after 2001. In June 2007, it was announced that the Quixtar brand would be phased out over an eighteen– to twenty-four–month period in favor of a unified Amway brand worldwide.
Global markets
According to the Amway website, as of 2011 the company operated in over 100 countries and territories, organized into regional markets: the Americas, Europe, greater China, Japan and Korea, and SE Asia/Australia. Amway's top ten markets are China, Korea, the United States, Japan, Thailand, Taiwan, India, Russia, Malaysia and Italy.In 2008, Alticor announced that two-thirds of the company's 58 markets reported sales increases, including strong growth in the China, Russia, Ukraine and India markets.
Amway Australia
- See ''Amway Australia''
Amway China
In 2006, Amway China had a reported 180,000 sales representatives, 140 stores, and $2 billion in annual sales. In 2007, Amway Greater China and South-east Asia Chief Executive Eva Cheng was ranked no. 88 by Forbes magazine in its list of the World's Most Powerful Women. In 2008, China was Amway's largest market, reporting 28% growth and sales of 17 billion yuan. According to a report in Bloomberg Businessweek in April 2010, Amway had 237 retail shops in China, 160,000 direct sales agents, and $3 billion in revenue. Since then, Amway has been continuing to expand in China, even as the government has been imposing greater restrictions on the company, and launched a WeChat mini-program in 2021.
Brands
Amway's product line grew from LOC, with the laundry detergent SA8 added in 1960, and later the hair care product Satinique and the cosmetics line Artistry.In 2018, nutrition and wellness products were 52% of total sales, and beauty and personal care products were 26% of total sales.
Household cleaners
Amway is best known in North America for its original multi-purpose cleaning product LOC, SA8 laundry detergent, and Dish Drops dishwashing liquid. Consumer Reports conducted blind testing of detergents in 2010 and ranked versions of Amway's Legacy of Clean detergents 9th and 18th of 20 detergents tested. Consumer Reports program manager Pat Slaven recommended against buying the products because consumers can "go to the grocery store and get something that performs a whole lot better for a whole lot less money".Health and beauty
Amway's health and beauty brands include Artistry, Satinique, Hymm, Body Series, Glister, Moiskin, Nutrilite, Nutriway, Attitude, eSpring, Atmosphere and iCook as well as XL and XS Energy drinks. Other Amway brands that were discontinued or replaced include Tolsom, Eddie Funkhouser New York, or beautycycle.Artistry
Amway's Artistry products include skin care, cosmetics, and anti-aging creams and serums. In 2011, Artistry brand reached sales of $2.8 billion.Nutrilite
Amway's largest-selling brand is the Nutrilite range of health supplements, and in 2008 Nutrilite sales exceeded $3 billion globally. In 2001, NSF International issued its first five dietary supplement certifications to Nutrilite.In 2011, Nutrilite brand of vitamins and dietary supplements led Amway's sales, totaling almost $4.7 billion. According to Euromonitor International, in 2014, Nutrilite was the world's No. 1 selling vitamins and dietary supplements brand. In 2015, it was reported that according to Euromonitor International, Amway was the largest vitamin and dietary supplement vendor in China, with 11% of a market that generated 100 billion yuan in annual sales. In 2015, it was reported that according to China Confidential consumer brands survey, Amway Nutrilite was the most popular vitamin and dietary supplement brand in China.
In January 2009, Amway announced a voluntary recall of Nutrilite and XS Energy Bars after learning that they had possibly been manufactured with Salmonella-contaminated ingredients from Peanut Corporation of America. The company indicated that it had not received any reports of illness in connection with the products.
In 2012, the Center for Science in the Public Interest, accused Amway of making unsubstantiated and illegal claims about Nutrilite Fruits & Vegetables 2GO Twist Tubes and threatened to launch a class action lawsuit against the company unless it took remedial action. Amway responded that the claims made about the products were properly substantiated and that they did not plan to change the product's labeling but nevertheless would review the statements that CSPI has questioned. CSPI later reported that Amway had agreed to changing product labels by the end of 2014.