Amway - Wikipedia

Amway China launched in 1995. In 1998, after abuses of illegal pyramid schemes led to riots, the Chinese government enacted a ban on all direct selling ... Amway FromWikipedia,thefreeencyclopedia Jumptonavigation Jumptosearch Americanmulti-levelmarketingcompany AmwayCorpHeadquartersinAda,MichiganTypePrivateIndustryHealth,Beauty,HomeCareFoundedNovember 9,1959(62yearsago) (1959-11-09)Founder RichardDeVos JayVanAndel HeadquartersAda,Michigan,UnitedStatesAreaservedWorldwideKeypeople SteveVanAndel(Co-Chairman) DougDeVos(Co-Chairman) MilindPant(CEO) ProductsAmwayHome,Glister,G&H,Nutrilite,Artistry,AmwayQueen,eSpring,Atmosphere,XSEnergyRevenueUS$8.4 billion(2019)[1][2]Numberofemployees16,000+[3][2]ParentAlticorWebsitewww.amwayglobal.com Amway(shortfor"AmericanWay")isanAmericanmulti-levelmarketing(MLM)companythatsellshealth,beauty,andhomecareproducts.[4][5][6]Thecompanywasfoundedin1959byJayVanAndelandRichardDeVosandisbasedinAda,Michigan.[7][3]AmwayanditssistercompaniesunderAlticorreportedsalesof$8.4billionin2019.[1][3]Itconductsbusinessthroughanumberofaffiliatedcompaniesinmorethanahundredcountriesandterritories. AmwayhasbeeninvestigatedinvariouscountriesandbyinstitutionssuchastheFederalTradeCommission(FTC)forallegedpyramidschemepractices.Ithasneverbeenfoundguilty,thoughithaspaidtensofmillionsofdollarstosettlethesesuits.[8][9][10][11][12][13] Contents 1History 1.1Founding 1.2Internationalexpansion 1.3Quixtar 2Globalmarkets 2.1AmwayAustralia 2.2AmwayChina 3Brands 3.1Householdcleaners 3.2Healthandbeauty 3.2.1Artistry 3.2.2Nutrilite 3.3eSpring 3.4XS 4DittoDelivery 5Businessmodel 6Commercialsponsorships 7Politicsandculture 7.1Politicalcontributions 7.2Religion 7.3Chamberofcommerce 7.4Accreditationprogram 8Pyramidschemeaccusations 8.1FTCinvestigation 8.2AmwayIndia 8.3U.S.classactionsettlement 8.4ClassactioninCanada 8.5Lobbyingforderegulation 9Otherlegalactions 9.1Canadiantaxfraudcase 9.2RIAAlawsuit 9.3AmwayUK 9.4WelcometoLife(Poland) 9.5Dr.PhilandShapeUp 9.6Procter&Gamble 9.7RegulatoryviolationsinVietnam 10Otherissues 10.1Cultism 10.2DatelineNBC 11Seealso 12References 13Books 14Externallinks History Founding AmwayJapanheadoffice AmwayVietnam(HồChíMinhCity) JayVanAndelandRichardDeVoshadbeenfriendssinceschooldaysandbusinesspartnersinvariousendeavors,includingahamburgerstand,anaircharterservice,andasailingbusiness.In1949,theywereintroducedtotheNutriliteProductsCorporation[14]byVanAndel'ssecondcousinNeilMaaskant.DeVosandVanAndelsigneduptobecomedistributorsforNutrilitefoodsupplementsinAugust.[15][page needed]Theysoldtheirfirstboxthenextdayfor$19.50,butlostinterestforthenexttwoweeks.TheytraveledtoChicagotoattendaNutriliteseminarsoonafterward,attheurgingofMaaskant,whohadbecometheirsponsor.Theywatchedpromotionalfilmstripsandlistenedtotalksbycompanyrepresentativesandsuccessfuldistributors,thentheydecidedtopursuetheNutrilitebusiness.TheysoldtheirsecondboxofsupplementsontheirreturntriptoMichigan,andrapidlyproceededtodevelopthebusinessfurther.[15][page needed] Earlierin1949,DeVosandVanAndelhadformedtheJa-RiCorporation(abbreviatedfromtheirrespectivefirstnames)toimportwoodengoodsfromSouthAmericancountries.AftertheChicagoseminar,theyturnedJa-RiintoaNutrilitedistributorshipinstead.[16]Inadditiontoprofitsoneachproductsold,Nutriliteofferedcommissionsonsalesmadebynewdistributorsintroducedtothecompanybyexistingdistributors—asystemknownasmulti-levelmarketingornetworkmarketing.By1958,DeVosandVanAndelhadbuiltanorganizationofmorethan5,000distributors.However,theyandsomeoftheirtopdistributorsformedtheAmericanWayAssociation,orAmway,inApril1959inresponsetoconcernsaboutthestabilityofNutriliteandinordertorepresentthedistributorsandlookforadditionalproductstomarket.[17] TheirfirstproductwascalledFrisk,anorganiccleanerdevelopedbyascientistinOhio.DeVosandVanAndelboughttherightstomanufactureanddistributeFrisk,andlaterchangedthenametoLOC(LiquidOrganicCleaner).[18]TheysubsequentlyformedtheAmwaySalesCorporationtoprocureandinventoryproductsandtohandlesalesandmarketingplans,andtheAmwayServicesCorporationtohandleinsuranceandotherbenefitsfordistributors.[19]In1960,theypurchaseda50%shareinAtcoManufacturingCompanyinDetroit,theoriginalmanufacturersofLOC,andchangeditsnametoAmwayManufacturingCorporation.[20]In1964,theAmwaySalesCorporation,AmwayServicesCorporation,andAmwayManufacturingCorporationmergedtoformtheAmwayCorporation.[21] AmwayboughtacontrollinginterestinNutrilitein1972[22]andfullownershipin1994. Internationalexpansion AmwayexpandedtoAustraliain1971,topartsofEuropein1973,topartsofAsiain1974,toJapanin1979,toLatinAmericain1985,toThailandin1987,toChinain1995,[23]toAfricain1997,toIndiaandScandinaviain1998,toUkrainein2003,toRussiain2005[citationneeded],andtoVietnamin2008.[24] In2014,aRussianloyaltycardprogramcalled"Alfa-Amway"wascreatedwhenAmwayjoinedwithAlfa-Bank.[25] AmwaywasrankedbyForbesasthe42nd-largestprivatelyheldcompanyintheUnitedStatesin2018,[26]andasthenumberonelargestcompanyontheDirectSellingNewsGlobal100listin2018.[27] Quixtar Mainarticle:AmwayGlobal ThefoundersoftheAmwaycorporationestablishedanewholdingcompanyin1999,namedAlticor,andlaunchedthreenewcompanies:asister(andseparate)Internet-focusedcompanynamedQuixtar,AccessBusinessGroup,andPyxisInnovations.Pyxis,laterreplacedbyFultonInnovation,pursuedresearchanddevelopmentandAccessBusinessGrouphandledmanufacturingandlogisticsforAmway,Quixtar,andthird-partyclients.[28] Themaindifferencewasthatall"IndependentBusinessOwners"(IBO)couldorderdirectlyfromAmwayontheInternet,ratherthanfromtheirupline"directdistributor",andhaveproductsshippeddirectlytotheirhome.TheAmwaynamecontinuedbeingusedintherestoftheworld.AftervirtuallyallAmwaydistributorsinNorthAmericaswitchedtoQuixtar,AlticorelectedtocloseAmwayNorthAmericaafter2001.InJune2007itwasannouncedthattheQuixtarbrandwouldbephasedoutoveran18-to-24-monthperiodinfavorofaunifiedAmwaybrand(AmwayGlobal)worldwide.[29] In2006,QuixtarpublishedTheQuixtarIndependentBusinessOwnerCompensationPlan,inwhichthecompanyreportedthattheaveragemonthlygrossincomefor"Active"IBOswas$115.[30] Globalmarkets AccordingtotheAmwaywebsite,asof2011[update]thecompanyoperatedinover100countriesandterritories,organizedintoregionalmarkets:theAmericas,Europe,greaterChina,JapanandKorea,andSEAsia/Australia.Amway'stoptenmarketsareChina,Korea,theUnitedStates,Japan,Thailand,Taiwan,India,Russia,MalaysiaandItaly.[1][2] In2008,Alticorannouncedthattwo-thirdsofthecompany's58marketsreportedsalesincreases,includingstronggrowthintheChina,Russia,UkraineandIndiamarkets.[31] AmwayAustralia SeeAmwayAustralia AmwayChina AmwayChinalaunchedin1995.In1998,afterabusesofillegalpyramidschemesledtoriots,theChinesegovernmentenactedabanonalldirectsellingcompanies,includingAmway.[32]Afterthenegotiations,somecompanieslikeAmway,Avon,andMaryKaycontinuedtooperatethroughanetworkofretailstorespromotedbyanindependentsalesforce.[33]ChinaintroducednewdirectsellinglawsinDecember2005,andinDecember2006,Amwaywasoneofthefirstcompaniestoreceivealicensetoresumedirectsales.However,thelawforbidsteachers,doctors,andcivilservantsfrombecomingdirectsalesagentsforthecompanyand,unlikeintheUnitedStates,salespeopleinChinaareineligibletoreceivecommissionsfromsalesmadebythedistributorstheyrecruit. In2006,AmwayChinahadareported180,000salesrepresentatives,140stores,and$2 billioninannualsales.[34]In2007,AmwayGreaterChinaandSouth-eastAsiaChiefExecutiveEvaChengwasrankedno.88byForbesmagazineinitslistoftheWorld'sMostPowerfulWomen.[35]In2008,ChinawasAmway'slargestmarket,reporting28%growthandsalesof17 billionyuan(US$2.5billion).[36]AccordingtoareportinBloombergBusinessweekinApril2010,Amwayhad237retailshopsinChina,160,000directsalesagents,and$3 billioninrevenue.[37]Sincethen,AmwayhasbeencontinuingtoexpandinChina,evenasthegovernmenthasbeenimposinggreaterrestrictionsonthecompany,[38]andlaunchedaWeChatmini-programin2021.[39] Brands Amway'sproductlinegrewfromLOC,withthelaundrydetergentSA8addedin1960,andlaterthehaircareproductSatinique(1965)andthecosmeticslineArtistry(1968).TodayAmwaymanufacturesover450products,withmanufacturingfacilitiesinChina,IndiaandtheUS,aswellasNutriliteorganicfarmsinBrazil,MexicoandtheUS(CaliforniaandWashingtonstate).[citationneeded]AmwaybrandsincludeArtistry,Atmosphere,BodyBlends,Bodykey,BodyWorks,ClearNow,eSpring,Glister,iCook,LegacyofClean,Nutrilite,PeterIsland,PerfectEmpoweredDrinkingWater,PersonalAccents,Ribbon,Satinique,ArtistryMenandXS. In2018,nutritionandwellnessproductswere52%oftotalsales,andbeautyandpersonalcareproductswere26%oftotalsales.[1][2] Householdcleaners AmwayisbestknowninNorthAmericaforitsoriginalmulti-purposecleaningproductLOC,SA8laundrydetergent,andDishDropsdishwashingliquid.IntheJanuary2007issueofConsumerReports,SA8withBioquestwasratedthebest-performinglaundrydetergent.[40]ConsumerReportsdid,however,criticizeSA8'spricing,asituationwhichwasdisputedbyAmway.[41]ConsumerReportsconductedblindtestingofdetergentsin2010andrankedversionsofAmway'sLegacyofCleandetergents9thand18thof20detergentstested.ConsumerReportsprogrammanagerPatSlavenrecommendedagainstbuyingtheproductsbecauseconsumerscan"gotothegrocerystoreandgetsomethingthatperformsawholelotbetterforawholelotlessmoney".[42][43] Healthandbeauty Amway'shealthandbeautybrandsincludeArtistry,Satinique,Hymm,BodySeries,Glister,Moiskin(SouthAmerica),[44]Nutrilite,Nutriway(ScandinaviaandAustralia/NewZealand),Attitude(India),eSpring,AtmosphereandiCookaswellasXLandXSEnergydrinks.OtherAmwaybrandsthatwerediscontinuedorreplacedincludeTolsom,EddieFunkhouserNewYork,orbeautycycle(EasternEurope). Artistry Mainarticle:Artistry(cosmetics) Amway'sArtistryproductsincludeskincare,cosmetics,andanti-agingcreamsandserums.In2011,Artistrybrandreachedsalesof$2.8billion.[45] Nutrilite Mainarticle:Nutrilite Amway'slargest-sellingbrandistheNutriliterangeofhealthsupplements(marketedasNutriwayinsomecountries),andin2008Nutrilitesalesexceeded$3billionglobally.[46]In2001,NSFInternationalissueditsfirstfivedietarysupplementcertificationstoNutrilite.[47] In2011,NutrilitebrandofvitaminsanddietarysupplementsledAmway'ssales,totalingalmost$4.7billion.[45]AccordingtoEuromonitorInternational,in2014,Nutrilitewastheworld'sNo.1sellingvitaminsanddietarysupplementsbrand.[48]In2015,itwasreportedthataccordingtoEuromonitorInternational,AmwaywasthelargestvitaminanddietarysupplementvendorinChina,with11%ofamarketthatgenerated100billionyuan($15.6billion)inannualsales.[49]In2015,itwasreportedthataccordingtoChinaConfidentialconsumerbrandssurvey,AmwayNutrilitewasthemostpopularvitaminanddietarysupplementbrandinChina.[50] InJanuary2009,AmwayannouncedavoluntaryrecallofNutriliteandXSEnergyBarsafterlearningthattheyhadpossiblybeenmanufacturedwithSalmonella-contaminatedingredientsfromPeanutCorporationofAmerica.Thecompanyindicatedthatithadnotreceivedanyreportsofillnessinconnectionwiththeproducts.[51] In2012,theCenterforScienceinthePublicInterest(CSPI),accusedAmwayofmakingunsubstantiatedandillegalclaimsaboutNutriliteFruits&Vegetables2GOTwistTubesandthreatenedtolaunchaclassactionlawsuitagainstthecompanyunlessittookremedialaction.[52][53]Amwayrespondedthattheclaimsmadeabouttheproductswereproperlysubstantiatedandthattheydidnotplantochangetheproduct'slabelingbutneverthelesswouldreviewthestatementsthatCSPIhasquestioned.[54]CSPIlaterreportedthatAmwayhadagreedtochangingproductlabelsbytheendof2014.[55] eSpring Amway'seSpringwaterfilterwasintroducedin2000.AccordingtoAmway,itwasthefirstsystemtocombineacarbonblockfilterandultravioletlightwithelectronic-monitoringtechnologyinthefiltercartridgeanditbecamethefirsthomesystemtoachievecertificationforANSI/NSFStandards42,53,and55.[56][57]AccordingtoAmway,eSpringwasthefirstwatertreatmentsystemtoreceivecertificationforallfifteenNSF/ANSI401contaminantswhichincludepharmaceuticals,pesticidesandherbicides.[56][58]Thecompanyalsoclaimsthat,inadditiontothese15contaminants,eSpringiscertifiedformorethan145potentialcontaminants,includingleadandmercury.[56] eSpringwasthefirstcommercialproductwhichemployedFultonInnovation'seCoupledwirelesspowerinductiontechnology.[59]InDecember2006,Amwaysistercompany,FultonInnovations,announcedthatitwouldintroduceeCoupledtechnologyinotherconsumerelectronicproductsatthe2007ConsumerElectronicsShow.[60]CompanieslicensingthistechnologyincludeVisteon,HermanMiller,MotorolaandMobilityElectronics.[61]FultonwasafoundingmemberoftheWirelessPowerConsortiumwhichdevelopedtheQi(inductivepowerstandard).[62] In2007eSpringwasrankedfifthoutof27brandsinacomparisonofwaterfiltersbyConsumerReports.[63] XS OnJanuary14,2015,AmwayannouncedthatithadacquiredXSEnergy,aCalifornia-basedbrandofenergydrinksandsnacks.TheXSEnergybrandhasbeensoldasanAmwayproductsince2003.AsofJanuary2015,ithasbeendistributedin38countries,generatingannualsalesof$150million.[64][65][66] AccordingtoEuromonitorInternational,theXSEnergywasthefirstexclusivelysugar-freeenergydrinkbrandsoldglobally.[48] DittoDelivery DittoDeliveryisAlticor'sautomatic,monthlyreplenishmentprogramthatfillsordersbasedoncustomers'predeterminedneeds.AsofMay2001,DittoDeliveryaccountedfor30%ofQuixtar'sNorthAmericansales.[67] Businessmodel Amwaycombinesdirectsellingwithamulti-levelmarketingstrategy.Amwaydistributors,referredtoas"independentbusinessowners"(IBOs),maymarketproductsdirectlytopotentialcustomersandmayalsosponsorandmentorotherpeopletobecomeIBOs.IBOsmayearnincomebothfromtheretailmarkuponanyproductstheysellpersonally,plusaperformancebonusbasedonthesalesvolumetheyandtheirdownline(IBOstheyhavesponsored)havegenerated.[4]PeoplemayalsoregisterasIBOstobuyproductsatdiscountedprices.HarvardBusinessSchool,whichdescribedAmwayas"oneofthemostprofitabledirectsellingcompaniesintheworld",notedthatAmwayfoundersVanAndelandDeVos"accomplishedtheirsuccessthroughtheuseofanelaboratepyramid-likedistributionsysteminwhichindependentdistributorsofAmwayproductsreceivedapercentageofthemerchandisetheysoldandalsoapercentageofthemerchandisesoldbyrecruiteddistributors".[68] Commercialsponsorships InDecember2006,AlticorsecuredthenamingrightsfortheOrlandoMagic'shomebasketballarenainOrlando,Florida.TheOrlandoMagicareownedbytheDeVosfamily.Thearena,formerlyknownastheTDWaterhouseCentre,wasrenamedtheAmwayArena.Itssuccessor,theAmwayCenter,wasopenedin2010,andtheolderarenawasdemolishedin2012.[69] In2009,AmwayGlobalsignedathree-yeardealwiththeSanJoseEarthquakesMajorLeagueSoccerteamtobecomethejerseysponsor.[70] InMarch2009,AmwayGlobalsignedamulti-yeardealtobecomethepresentingpartneroftheLosAngelesSolofWomen'sProfessionalSoccer.[71]Thedeal,however,wouldlastonlyoneyear,astheSolfoldedin2010. In2011,Amwaysignedathree-yeardealtobethepresentingsponsoroftheNationalHockeyLeague'sDetroitRedWings.[72] Since2012,AmwayhasbeenthetitlesponsoroftheCanadianChampionship,anannualsoccertournament. Politicsandculture Politicalcontributions Inthe1990s,theAmwayorganizationwasamajorcontributortotheRepublicanParty(GOP)andtotheelectioncampaignsofvariousGOPcandidates.Amwayanditssalesforcecontributedasubstantialamount(uptohalf)ofthetotalfunds($669,525)forthe1994politicalcampaignofRepublicancongresswomanandAmwaydistributorSueMyrick(N.C.).[73]AccordingtotworeportsbyMotherJonesmagazine,AmwaydistributorDexterYager"usedthecompany'sextensivevoice-mailsystemtorallyhundredsofAmwaydistributorsintogivingatotalof$295,871"toMyrick'scampaign.[73][74]Accordingtoacampaignstafferquotedbythemagazine,MyrickhadappearedregularlyontheAmwaycircuit,speakingathundredsofralliesandselling$5and$10audiotapes.[73]Followingthe1994election,Myrickmaintained"closetiestoAmwayandYager",andraised$100,000fromAmwaysources,"mostnotablythroughfundraisersatthehomesofbigdistributors",inthe1997–98electioncycle.[74] InOctober1994,Amwaygavethebiggestcorporatecontributionrecordedtothatdatetoapoliticalpartyforasingleelection,$2.5 milliontotheRepublicanNationalCommittee(RNC),andwasthenumberonecorporatepoliticaldonorintheUnitedStates.[73]Inthe2004electioncycle,theorganizationcontributedatotalof$4milliontoaconservative527group,ProgressforAmerica.[75] InJuly1996,Amwayco-founderRichardDeVoswashonoredata$3 millionfundraiserfortheRepublicanParty,andaweeklater,itwasreportedthatAmwayhadtriedtodonate$1.3 milliontopayforRepublican"infomercials"andtelevisingoftheGOPconventiononPatRobertson'sFamilyChannel,butbackedoffwhenDemocratscriticizedthedonationasaploytoavoidcampaign-financerestrictions.[73][76] InApril1997,RichardDeVosandhiswife,Helen,gave$1 milliontotheRNC,[74][76]which,atthetime,wasthesecond-largestsoft-moneydonationever,behindAmway's1994giftof$2.5 milliontotheRNC.[74]InJuly1997,SenateMajorityLeaderTrentLottandHouseSpeakerNewtGingrichslippedalast-minuteprovisionintoahotlycontestedcompromisetaxbillthatgrantedAmwayandfourothercompaniesataxbreakontheirAsianbranchesthattotaled$19 million.[74] InacolumnpublishedintheFortWorthStar-TelegramnewspaperinAugust1997,[77]reporterMollyIvinswrotethatAmwayhad"itsowncaucusinCongress...FiveRepublicanHousemembersarealsoAmwaydistributors:Reps.SueMyrickofNorthCarolina,JonChristensenofNebraska,DickChryslerofMichigan,RichardPomboofCalifornia,andJohnEnsignofNevada.TheirinformalcaucusmeetsseveraltimesayearwithAmwaybigwigstodiscusspolicymattersaffectingthecompany,includingChina'stradestatus."[78] A1998analysisofcampaigncontributionsconductedbyBusinessweekfoundthatAmway,alongwiththefoundingfamiliesandsometopdistributors,haddonatedatleast$7 milliontoGOPcausesintheprecedingdecade.[76]PoliticalcandidateswhoreceivedcampaignfundingfromAmwayin1998includedRepresentativesBillRedmond(R–N.M.),HeatherWilson(R–N.M.),andJonChristensen(R–Neb).[74] AccordingtoareportbytheCenterforPublicIntegrity,inthe2004electioncycle,membersoftheVanAndelandDeVosfamilieswerethesecond,thirdandfifthlargestdonorstotheRepublicanparty.[79] DickDeVos,sonofAmwayfounderRichardDeVosandpastpresidentofthecompany,servedasFinanceChairmanoftheRepublicanNationalCommittee,[80]andhiswifeBetsyDeVosservedaschairoftheMichiganRepublicanPartyfrom1996to2000and2003to2005.[81] InMay2005,DickDeVosranagainstincumbentGovernorJenniferGranholminMichigan's2006gubernatorialelection.DeVoswasdefeatedbyGranholm,whowon56%ofthepopularvotetohis42%.[82] InAugust2012,gayrightsactivistFredKargerbeganamovementtoboycottAmwayinprotestofthecontributionfromaprivatefoundationofAmwayPresidentDougDeVostotheNationalOrganizationforMarriage,apoliticalorganizationwhichopposeslegalizationofsame-sexmarriageintheUnitedStates.[83] OnFebruary7,2017,BetsyDeVoswasconfirmedbytheSenateasthe11thSecretaryofEducation. Religion SeveralsourceshavecommentedonthepromotionofChristianconservativeideologywithintheAmwayorganization.[74][84][85][86]MotherJonesmagazinedescribedtheAmwaydistributorforceas"heavilyinfluencedbythecompany'sdualthemesofChristianmoralityandfreeenterprise"andoperating"likeaprivatepoliticalarmy".[74]InTheCultofFreeEnterprise,StephenButterfield,whospenttimeintheYagergroupwithinAmway,wrote"[Amway]sellsamarketingandmotivationalsystem,acause,awayoflife,inafervidemotionalatmosphereofralliesandpoliticalreligiousrevivalism."[84]PhiladelphiaCityPapercorrespondentMaryamHeneinstatedthat"ThelanguageusedinmotivationaltoolsforAmwayfrequentlyechoesordirectlyquotestheBible,withtheunstatedassumptionofasharedChristianperspective."[85] BusinessweekcorrespondentsBillVlasicandBethRegancharacterizedthefoundingfamiliesofAmwayas"ferventlyconservative,ferventlyChristian,andhugelyinfluentialintheRepublicanParty",notingthat"RichDeVoschargedupthetroopswithamessageofChristianbeliefsandrock-ribbedconservatism."[76] High-rankingAmwayleaderssuchasRichardDeVosandDexterYagerwereownersandmembersoftheboardofGospelFilms,aproducerofmoviesandbooksgearedtowardconservativeChristians,aswellasco-owners(alongwithSalemCommunications)ofaright-wing,ChristiannonprofitcalledGospelCommunicationsInternational.[74][85][87][88][89]Yager,interviewedon60Minutesin1983,admittedthathepromotesChristianitythroughhisAmwaygroup,butstatedthatthismightnotbethecaseinotherAmwaygroups.[90][needquotationtoverify] RollingStone'sBobMoserreportedthatformerAmwayCEOandco-founderRichardDeVosisconnectedwiththeDominionistpoliticalmovementintheUnitedStates.MoserstatesthatDeVoswasasupporterofthelateD.JamesKennedy,givingmorethan$5 milliontoKennedy'sCoralRidgeMinistries.[91][92][93]DeVoswasalsoafoundingmemberandtwo-timepresidentoftheCouncilforNationalPolicy,aright-wingChristianorganization.[94] SociologistDavidG.BromleycallsAmwaya"quasi-religiouscorporation"havingsectariancharacteristics.[95][96]BromleyandAnsonShupeviewAmwayaspreachingthegospelofprosperity.[97]PatralekhaBhattacharyaandKrishnaKumarMehta,oftheconsultingfirmThinkalytics,LLC,reasonedthatalthoughsomecriticshavereferredtoorganizationssuchasAmwayas"cults"andhavespeculatedthattheyengagein"mindcontrol",thereareotherexplanationsthatcouldaccountforthebehaviorofdistributors.Namely,continuedinvolvementofdistributorsdespiteminimaleconomicreturnmayresultfromsocialsatisfactioncompensatingfordiminishedeconomicsatisfaction.[98] Chamberofcommerce Amwayco-founderJayVanAndel(in1980),andlaterhissonSteveVanAndel(in2001),wereelectedbytheboardofdirectorsoftheUnitedStatesChamberofCommercetobethechairmanoftheprivateAmericanlobbyingorganization.[99] Accreditationprogram In2006,Amway(thenQuixtarinNorthAmerica)introduceditsProfessionalDevelopmentAccreditationPrograminresponsetoconcernssurroundingbusinesssupportmaterials(BSM),includingbooks,tapesandmeetings.[100][101]In2010thiswassupersededbyitsAccreditationPlusprogramtoensurethatallBSMcontentisconsistentwithAmway'squalityassurancestandards,whichapprovedprovidersofBSMmustabideby.[102][103]Thequalityassurancestandardsstatethat[104][105][106] PromotingpoliticalcausesorotherissuesofapersonalnatureintheAmwayBusinessenvironmentisnotpermitted Spiritualreferencesarenotallowedasthemessageorfocusandpresentersmaynotusethestageasaplatformtopromotereligiousand/orpersonalsocialbeliefs Endorsementordenouncementofspecificcandidates,politicalparties,and/orissues,unlessspecificallyrelatedtotheoperationofanAmwayBusinessisnotallowed. Pyramidschemeaccusations RobertCarroll,oftheSkeptic'sDictionary,hasdescribedAmwayasa"legalpyramidscheme",andhassaidthatthequasi-religiousdevotionofitsaffiliatesisusedbythecompanytoconcealpoorperformanceratesbydistributors.[107] FTCinvestigation Mainarticle:InreAmwayCorp. Ina1979ruling,[21][108]theFederalTradeCommissionfoundthatAmwaydidnotfitthedefinitionofapyramidschemebecause(a)distributorswerenotpaidtorecruitpeople,(b)itdidnotrequiredistributorstobuyalargestockofunmovinginventory,(c)distributorswererequiredtomaintainretailsales(atleast10permonth),and(d)thecompanyandalldistributorswererequiredtoacceptreturnsofexcessinventoryfromdown-leveldistributors.[109][110] TheFTCdid,however,findAmway"guiltyofprice-fixingandmakingexaggeratedincomeclaims";[111]thecompanywasorderedtostopretailpricefixingandallocatingcustomersamongdistributorsandwasprohibitedfrommisrepresentingtheamountofprofit,earningsorsalesitsdistributorsarelikelytoachievewiththebusiness.Amwaywasorderedtoaccompanyanysuchstatementswiththeactualaveragesperdistributor,pointingoutthatmorethanhalfofthedistributorsdonotmakeanymoney,withtheaveragedistributormakinglessthan$100permonth.Theorderwasviolatedwitha1986adcampaign,resultingina$100,000fine.[112][113] Studiesofindependentconsumerwatchdogagencieshaveshownthatbetween990and999of1000participantsinMLMsthatuseAmway-typepayplansinfactlosemoney.[114][115]AccordingtoTheSkeptic'sDictionary,"IntheUnitedStates,theFederalTradeCommissionrequiresAmwaytolabelitsproductswiththemessagethat54%ofAmwayrecruitsmakenothingandtherestearnonaverage$65amonth."[116] AmwayIndia InSeptember2006,followingapubliccomplaint,AndhraPradeshandTelanganastatepolice(CID)initiatedraidsandseizuresagainstAmwaydistributorsinthestate,andsubmittedapetitionagainstthem,claimingthecompanyviolatedthePrizeChitsandMoneyCirculationSchemes(Banning)Act.[117]TheyshutdownallcorporateofficesassociatedwiththeAmwayorganizationincludingtheofficesofsomeAmwaydistributors.Theenforcementsaidthatthebusinessmodelofthecompanyisillegal.[10][118]TheReserveBankofIndia(RBI)hadnotifiedthepolicethatAmwayinIndiamaybeviolatingcertainlawsregardinga"moneycirculationscheme"andtheIBTimesarticlewritesthat"somesay...Amwayisreallymoreaboutmakingmoneyfromrecruitingpeopletobecomedistributors,asopposedtosellingproducts".[10]In2008,thestategovernmentofAndhraPradeshenactedabanonAmwaymediaadvertisements.[117] OnAugust6,2011,KeralaPolicesealedtheofficesofAmwayatKozhikode,Kannur,Kochi,Kottayam,Thrissur,KollamandThiruvananthapuramfollowingcomplaints.[11][119][120]InNovember2012,theEconomicOffencesWingofKeralaPoliceconductedsearchesattheofficesofAmwayatKozhikode,ThrissurandKannuraspartofitscrackdownonmoneychainactivitiesandcloseddownthefirm'swarehousesatthesecentres.Productsvaluedat21.4millionrupees(aboutUS$400,000atthetime)werealsoseized.[121]Later,AreamanagerofAmway,P.M.Rajkumar,whowasarrestedfollowingsearcheswasremandedinjudicialcustodyfor14days.[122] OnMay27,2013,CrimeBranchofficialsofKeralaPolicearrestedWilliamS.Pinckney,ManagingDirector&CEOofAmwayIndiaEnterprisesalongwithtwootherdirectorsofthecompanyfromKozhikode.Thethreewerearrestedonchargesofrunningapyramidscheme.[12][123]Theyweregrantedbailthenextdayandthebusinesswasunaffected.OnJune8,2013,KozhikodeCourtliftedthefreezeonAmwayofficesinKerala.[124]OnMay26,2014,PinckneywasarrestedbyAndhraPradeshpoliceonthebasisofaconsumercomplaintthatallegedunethicalcirculationofmoneybyAmway.Hewassubsequentlyarrestedinothercriminalcasesregisteredagainsthiminthestateonallegationsoffinancialirregularitiesbythecompany.[125]Pinckneywasjailedfortwomonthsuntilbeingreleasedonbail.[125][126][127] In2017,aChandigarhcourtframedcharges,underSection420oftheIndianPenalCodeandthePrizeChitsandMoneyCirculationScheme(Banning)Act,againsttwodirectorsofAmwayIndia,WilliamScotPinckneyandPrithvaiRajBijlani.Thiswasbasedonacheatingcasefiledbyeightcomplainantsin2002,followingwhichtheEconomicOffencesWinghadfiledchargesheetin2012.ArevisionpleamovedbythetwoAmwayofficialsagainsttheframedchargeswasdismissedin2018.[128][129] U.S.classactionsettlement OnNovember3,2010,Amwayannouncedthatithadagreedtopay$56 million—$34 millionincashand$22 millioninproducts—tosettleaclassactionthathadbeenfiledinFederalDistrictCourtinCaliforniain2007.[9]Theclassaction,whichhadbeenbroughtagainstQuixtarandseveralofitstop-leveldistributors,allegedfraud,racketeering,andthatthedefendantsoperatedasanillegalpyramidscheme. Amway,whilenotingthatthesettlementisnotanadmissionofwrongdoingorliability,acknowledgedthatithadmadechangestoitsbusinessoperationsasaresultofthelawsuit.Thesettlementissubjecttoapprovalbythecourt,whichwasexpectedinearly2011.[9]Theeconomicvalueofthesettlement,includingthechangesAmwaymadetoitsbusinessmodel,totals$100 million.[130] ClassactioninCanada A2009classactioncaselodgedinCanadawasrejectedbytheFederalCourtandconfirmedonappealbytheFederalCourtofAppeal,withcostsawardedtoAmwayandtheplaintiffsdirectedtoarbitration.[131][132][133][134] Lobbyingforderegulation TheDeVosessupportedanamendmenttotheUSHouseofRepresentatives'omnibusFinancialServicesandGeneralGovernmentAppropriationsbillforfiscalyear2018byUSRepresentativeJohnMoolenaarthatwouldhavelimitedtheabilityoftheFTCtoinvestigatewhetherMLMsarepyramidschemes.[135]TheamendmentwouldhavebarredtheTreasuryDepartment,theJusticeDepartment,theSmallBusinessAdministration,theSecuritiesandExchangeCommission,theFTC,oranyotheragenciesfromusinganymoniestotakeenforcementactionsagainstpyramidoperationsforthefiscalyear.[136]ItalsoadoptedprovisionsfromH.R.3409,theso-called"Anti-PyramidSchemePromotionActof2016",[137]whichwouldblurthelinesbetweenlegitimateMLMactivityandpyramidschemesestablishedundertheoriginal1979FTCcasebydeemingsalesmadetopeopleinsidethecompanyassalestoan“ultimateuser,”thuserasingthekeydistinctionmadeintherulingbetweensalestoactualconsumersofaproductandsalesmadetomembersoftheMLMnetworkaspartofrecruitmentofmembersortoqualifyforcommissions.[136][137][138]TheamendmentwasopposedbyacoalitionofconsumerinterestgroupsincludingConsumerAction,theConsumerFederationofAmerica,ConsumersUnion(thepublisherofConsumerReportsmagazine),ConsumerWatchdog,theNationalConsumersLeague,andtheUnitedStatesPublicInterestResearchGroup(USPIRG),[137]aswellasTruthinAdvertising(TINA.org)initsoriginalincarnation.[138] Otherlegalactions Canadiantaxfraudcase In1982,Amwayco-founders,RichardM.DeVosandJayVanAndel,alongwithAmway'sexecutivevicepresidentforcorporateservices,WilliamJ.DischerJr.,wereindictedinCanadaonseveralcriminalcharges,includingallegationsthattheyunderreportedthevalueofgoodsbroughtintothecountryandhaddefraudedtheCanadiangovernmentofmorethan$28millionfrom1965to1980.[139][140][141][142]Thechargesweredroppedin1983afterAmwayanditsCanadiansubsidiarypleadedguiltytocriminalcustomsfraudcharges.Thecompaniespaidafineof$25 millionCAD,thelargestfineeverimposedinCanadaatthetime.In1989thecompanysettledtheoutstandingcustomsdutiesfor$45 millionCAD.Ina1994articleauthoredbyDeVos,hestatedthattheguiltypleawasenteredfortechnicalreasons,despitebelievingtheywereinnocentofthecharges,andthathebelievedthatthecasehadbeenmotivatedby"politicalreasons".[143] RIAAlawsuit TheRecordingIndustryAssociationofAmerica(RIAA),aspartofitsanti-piracyefforts,suedAmwayandseveraldistributorsin1996,allegingthatcopyrightedmusicwasusedon"highlyprofitable"trainingvideotapes.[144]Amwaydeniedwrongdoing,blamingthecaseonamisunderstandingbydistributors,andsettledthecaseoutofcourtfor$9 million.[145]Inarelatedlawsuitinitiatedbythedistributorsinvolved,theCourtestablishedthatMahaleelLeeLuster,whohadbeencontractedtomakethevideotapes,hadviolatedcopyrightwithouttheknowledgeofthreeofthefiveofthosedistributors.[146] AmwayUK In2007,Amway'soperationswerehaltedintheUnitedKingdomandIrelandfollowingayearlonginvestigationbytheUKDepartmentofTradeandIndustry,whichmovedtohaveAmwaybannedonthebasisthatthecompanyhademployeddeceptivemarketing,presentedinflatedearningsestimates,andlureddistributorsintobuyingbogus"motivationandtraining"tools.[147][148]In2008,aUKjudgedismissedgovernmentclaimsagainstAmway'soperations,sayingmajorreformsintheprioryear(whichincludedbanningnon-Amway-approvedmotivationaleventsandmaterials)hadfixedcompanyfaultsthatfavouredsellingtrainingmaterialsoverproductsandmisrepresentedearnings.However,thejudgealsoexpressedhisbeliefthatAmwayallowed"misrepresentations"ofitsbusinessbyindependentsellersinyearspastandfailedtoactdecisivelyagainstthemisrepresentations.[149] WelcometoLife(Poland) In1997,AmwayPolandandNetworkTwentyOneseparatelysuedthemakersofaPolishfilm,WelcometoLife(Polish:Witajciewzyciu),fordefamationandcopyrightviolations.HenrykDederko(thedirector)andproducerwerelateracquittedonthechargeofdisseminatingfalseinformation.[150][151]Thefilm,bannedfor12years,wasoneofthehighlyanticipatedmoviesof2009'sWarsawFilmFestivalandwasdubbedbythepromotersasa"scarymovieaboutbrainwashing"[150]Itwassaidtodepicthard-sell"peprallies",andtoincludestatementsfromdistributorsthatmeetingshadasimilartonetomeetingsoftheCommunistPartybeforeitlostpowerinPoland.Methodsofrecruitmentthatconfusinglyresembledthoseofasectwerealsodescribed.[152]Abestselleronthelocalvideoblackmarket,thefilmwasbannedwhilethesuitproceeded.[153] In2001aregionalcourtruledinfavorofNetwork21;however,in2004theWarsawRegionalCourtdismissedAmway'scivillawsuit.OnappealAmwaywonthecaseandtheproducerswereorderedtopayafinetoachildren'scharityandpublishapublicapology.[154][155]Asof2009[update]thefilmwasstillbannedduetoanongoingcasebroughtby"privateindividuals"ridiculedinthefilm.[156] OnDecember18,2012,thecourtruledthatfilmcanbescreened,butthemakershavetoremove"untrueinformation",asthescreenneartheendofthemoviestatedthat30%ofcompanyincomeisgeneratedbysalesoftrainingmaterialsandthatthevastmajorityofitsprofitsaresharedonlybythetinyfractionoftopdistributors.[157]Thisisnottheonlycourtcase,sothefilmisstillbannedonothergrounds.[158] Dr.PhilandShapeUp InMarch2004,TVpersonalityPhilMcGraw(a.k.a.Dr.Phil)pulledhis"ShapeUp"lineofsupplementsoffthemarketinthefaceofaninvestigationbytheU.S.FederalTradeCommission(FTC).ThesupplementsweremanufacturedbyCSANutraceuticals,asubsidiaryofAlticor'sAccessBusinessGroup.[159]TheFTClaterdroppedtheprobe,butinOctober2005aclass-actionlawsuitwasfiledagainstMcGrawbyseveralpeoplewhousedtheproductsandclaimedthatthesupplements,whichcost$120permonth,didnotstimulateweightloss.[160]InSeptember2006,a$10.5 millionsettlementwasreached,inwhichAlticoragreedtoprovide$4.5 millionincashand$6 millioninNutriliteproductstodisgruntledusersofShapeUp.[161][162][163][164] Procter&Gamble SomeAmwaydistributorsdistributedanurbanlegendthatthe(old)Procter&GambleservicemarkwasinfactaSatanicsymbolorthattheCEOofP&GishimselfapracticingSatanist.(Insomevariantsofthestory,itisalsoclaimedthattheCEOofProcter&Gambledonated"satanictithes"totheChurchofSatan.)[165]Procter&GambleallegedthatseveralAmwaydistributorswerebehindaresurgenceofthestoryinthe1990sandsuedseveralindependentAmwaydistributorsandthecompanyfordefamationandslander.[166]ThedistributorshadusedAmway'sAmvoxvoicemessagingservicetosendtherumortotheirdownlinedistributorsinApril1995.[167]By2003,aftermorethanadecadeoflawsuitsinmultiplestates,allallegationsagainstAmwayandAmwaydistributorshadbeendismissed.InOctober2005,aUtahappealscourtreversedpartofthedecisiondismissingthecaseagainstthefourAmwaydistributors,andremandedittothelowercourtforfurtherproceedings.[168]InthelawsuitagainstthefourformerAmwaydistributors,Procter&Gamblewasawarded$19.25millionbyaU.S.DistrictCourtjuryinSaltLakeCityonMarch20,2007.[169][170]OnNovember24,2008,thecasewasofficiallysettled.[171]"It'shardtoimaginethey'dpursueitthislong,especiallyafteralltheretractionsweputout,"saiddistributorRandyHaugen,a53-year-oldOgden,Utah,businessmanwhomaintainedP&Gwasneverabletoshowhowitwasharmedbytherumors."Wearestunned.Allofus."[172] RegulatoryviolationsinVietnam InJanuary2017,theVietnamMinistryofIndustryandTradedeterminedthatAmwayVietnamhadviolatedfederalregulationsbyengaginginunauthorizedmulti-levelmarketing.[173] Otherissues Cultism SomeAmwaydistributorgroupshavebeenaccusedofusing"cult-like"tacticstoattractnewdistributorsandkeeptheminvolvedandcommitted.[84][174][175][176]AllegationsincluderesemblancetoaBigBrotherorganizationwithaparanoidattitudetowardinsiderscriticaloftheorganization,[176]seminarsandralliesresemblingreligiousrevivalmeetings,[84][176]andenormousinvolvementofdistributorsdespiteminimalincomes.[84][175][176]Anexaminationofthe1979–1980taxrecordsinthestateofWisconsinshowedthattheDirectDistributorsreportedanetlossof$918onaverage.[95][175] DatelineNBC In2004,DatelineNBCfeaturedacriticalreportbasedonayearlongundercoverinvestigationofbusinesspracticesofQuixtar.[177]Thereportnotedthattheaveragedistributormakesonlyabout$1,400peryearandthatmanyofthe"highleveldistributorssingingthepraisesofQuixtar"areactually"makingmostoftheirmoneybysellingmotivationalbooks,tapesandseminars;notQuixtar'scosmetics,soaps,andelectronics". "Infact,abouttwentyhighleveldistributorsarepartofanexclusiveclub;onethatthosehundredsofthousandsofotherdistributorsdon'tgettojoin.Foryearsonlyaprivilegedfew,includingBillBritt,haverunhugelyprofitablebusinessessellingallthosebooks,tapesandseminars;thingstherankandfiledistributorscan'tsellthemselvesbut,aretoldoverandoveragain,theyneedtobuyinordertosucceed." TheprogramsaidthataQuixtarrecruiterfeaturedinthereportmademisleadingandinconsistentstatementsaboutQuixtarearningsduringarecruitmentmeetingandhadanoutstandingarrestwarrantforcocainepossessionfromthemid-90s.[177] InaresponsetotheDatelinereport,Quixtarpublisheda"DatelineQuixtarResponse"onitsofficialwebsite.[178]Initsresponse,[179]Quixtarstated: "WelearnedthattwoDatelineproducershadregisteredasIBOsandformonthshadbeenconductingundercoverresearchforthestory,whichincludedusingahiddencameratovideotapemeetingsandconversationswithIBOs.TheproducersdidnotidentifythemselvesasworkingforDateline,insteadfeigninginterestinbuildingabusinesspoweredbyQuixtar." Thesitealsostatedthat: "Dateline'sstoryonQuixtarboileddowntothecomplaintsofthreeformerIndependentBusinessOwners(IBOs)–oneofwhomisacompetitor–andignoredthehundredsofthousandsofIBOspoweredbyQuixtarwhoareachievingtheirgoals." Seealso Companiesportal Listofmulti-levelmarketingcompanies Morrisonv.AmwayCorp. 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Books AmericanVictory:TheRealStoryofToday'sAmwaypublishedApril1997byChapel&CroftPublishing;ISBN 0-9645171-6-7 Amway:TheCultofFreeEnterprisepublishedDecember1,1985,bySouthEndPress;ISBN 0-9648795-1-4 AmwayForever:TheAmazingStoryofaGlobalBusinessPhenomenonpublishedAugust2011byJohnWiley&Sons;ISBN 978-0-470-48821-8 Amway:TheTrueStoryoftheCompanyThatTransformedtheLivesofMillionspublishedSeptember1,1999,byBerkleyPublishingGroup;ISBN 0-425-17040-3 AnEnterprisingLifepublished1998byHarperCollins;ISBN 0-88730-997-6 AnUncommonFreedom,theAmwayExperienceandWhyItGrowspublished1982byRevell;ISBN 978-0800713058 Commitmenttoexcellence:TheremarkableAmwaystorypublished1986byBenjamin;ISBN 0-87502-136-0 CompassionateCapitalism:PeopleHelpingPeopleHelpThemselvespublishedSeptember1994byPenguinBooks;ISBN 0-452-27051-0 EmpireofFreedom:TheAmwayStoryandWhatItMeanstoYoupublishedSeptember3,1997,byPrimaLifestyles;ISBN 0-7615-1088-5 HowtoBeLikeRichDeVos.SucceedingwithIntegrityinBusinessandLifepublished2004byHealthCommunications,Inc;ISBN 0-7573-0158-4 MerchantsofDeception:Aninsider'schillinglookattheworldwide,multi-billiondollarconspiracyofliesthatisAmwayanditsmotivationalorganizationspublished2009byBookSurgePublishing;ISBN 978-1-4392-4715-0 TheFirstEleven—ThegrowthofAmwayinBritainthroughthelivesofitslocalheroespublished1984byAMPublishing;ISBN 0-9509593-0-8 PromisestoKeep:TheAmwayPhenomenonandHowItWorkspublished1986byBerkleyBooks;ISBN 0-425-09856-7 TheDirectSellingRevolution:UnderstandingtheGrowthoftheAmwayCorporationpublished1993byWileyBlackwell;ISBN 978-0-631-19229-9 ThePossibleDream:ACandidLookAtAmwaypublished1977byRevell;ISBN 0-8007-0857-1 ProfilesoftheAmericanDream:RichDeVosandJayVanAndelandtheRemarkableBeginningsofAmway1997byPremiereFilms Externallinks WikimediaCommonshasmediarelatedtoAmwayCorporate. 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