INTRODUCTION TO PROJECT

Our objective of the study is to understand the Amway’s operations in international

marketing with respect to PESTLE analysis, SWOT analysis, Marketing Mix (Product,
Price, Place, Promotion, Packaging and People) and also we have compared its operation
domestically and internationally. To understand the former part, we have visited ‘Amway
India’ and gathered appropriate information with regards to project.

We have analyzed the information of the companies with respect to above determinants and
prepared relevant statement. After all our proceeds we get to know that this retail company
enhanced its business through Direct Marketing and created both Health & Wealth to its
customers.

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 Amway is the largest direct selling company and manufacturer in the world that uses
network marketing to sell a variety of products, primarily in the health, beauty, and home
care markets. Amway was founded in 1959 by Jay Van Andel and Richard DeVos. Based in
Ada, Michigan, the company and family of companies under Alticor reported sales growth
of 2.3%, reaching US$ 8.4 billion for the year ending December 31, 2009. Its product lines
include home care products, personal care products, jewelry, electronics, Nutrilite dietary
supplements, water purifiers, air purifiers, insurance and cosmetics. In 2004, Health &
Beauty products accounted for nearly 60% of worldwide sales. Amway conducts business
through a number of affiliated companies in more than ninety countries and territories
around the world. It is ranked by Forbes as one of the largest private companies in the
United States and by Deloitte as one of the largest retailers in the world.

Amway is more than an income opportunity or a company or products. It’s about

putting people in control of their lives. It’s about connecting people to others who respect
them, who share their goals and aspirations. It’s about supporting people in their
achievements. Amway is about people connecting people to a better way of life.

Amway has more than 6000 employees worldwide. In addition, Amway has more
than 3.6 million Independent Business Owners (IBOs) around the world. In China, Amway
products are sold by Amway sales representatives.

Vision of Amway
 Helping people live better lives.
 Showing where the business wishes to be in the future.

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Mission of Amway
 Through the partnering of Distributors, Employees, and the Founding Families and
the support of quality products and service, we offer all people the opportunity to
achieve their goals through the Amway Sales and Marketing Plan. Broad over riding
statement of purpose.
 To facilitate best business opportunities.
 To deliver high-quality products to semi-urban and urban homes in diverse areas of
insurance, home tech, home care, personal care, cosmetics and wellness.

Goal of Amway
 The development of new business opportunities.
 To increase the company's role in relations to social responsibility.
 To provide excellent customer service.

Community Services
Amway, its Independent Business Owners and employees are involved in improving the
communities in which they do business. Amway are committed to serve their customers to
fulfill their needs by focusing efforts on discovering and thereby meeting stated and
unstated requirements. Amway promote a culture of openness and mutual trust by
interacting objectively and without underlying personal interests. Amway are committed to
honor, encourage and support individuals and teams who contribute, through their behavior
and actions, to the success of the organization.
Social responsibilities performed by AMWAY
 One by One Campaign for Children
 Amway Opportunity Foundation (AOF)
 National Project for the Blind

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 THE HISTORY OF AMWAY
What does the word Amway mean? Amway is an abbreviation for "American Way"
and was coined in 1959 by company founders, Jay Van Andel and Richard DeVos. Short,
unique and easy to remember, Amway has been registered as a corporate name and
trademark ever since. In the following decades, Amway Corporation successfully
established itself as a leading multilevel marketing business, built on strong values and
founding principles that continue to sustain our company today. The business is built on the
simple integrity of helping people lead better lives.

Today, Amway is a multibillion-dollar international business representing freedom

and opportunity to millions of people in more than 88 countries and territories around the
world. Amway offer over 3 million Business Owners the inspiration to grow those
businesses, and to work hard to provide new and better ways for them to achieve their life
goals.

A Solid Foundation
Rich DeVos and Jay Van Andel's friendship actually
began with a business proposition, when Rich struck
a deal with Jay for a ride to school for 25 cents a
week After high school they entered the military, but
they planned to start a business together after separate
tours of duty. A friendship formed and became a
business relationship that has lasted to this day.   .

The Early Years

Amway quickly outgrew its original facilities in the basements of Rich DeVos's and Jay Van
Andel's homes. In its first full year of business, Amway's sales were more than half a
million dollars. 

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The Decade of Growth
As vowed by Jay Van Andel the night of the 1969 disaster, Amway rebuilt the aerosol plant
and went on. The '70s began with sales of more than $100 million at estimated retail, and
kept going strong. After a lengthy investigation, the FTC verified that Amway is a genuine
business opportunity and not a "pyramid."  

The Billion-Dollar Decade

The '80s will be remembered for the first Billion Dollar Year at estimated retail in 1980.
Building expansion at Amway World Headquarters continued at breakneck speed as
Amway scrambled to keep pace with demand, opening its new cosmetics plant in Ada,
Michigan.  
 
The Next Generation
As carefully planned by Rich and Jay, the second generation Van Andel and DeVos families
took the helm during the ' 90s. The Policy Board was formed and Steve Van Andel and Dick
DeVos succeeded their fathers as Chairman and President. Distributors witnessed a similar
trend, with the second generation of many distributor families taking on important
leadership roles.  
 
New Horizons
In 2000, Amway prepared for a new century and a
new exciting era. Almost 50 years after Amway
began, the DeVos and Van Andel families created a
new structure to meet the challenges of this new
century. A parent company, Alticor, was established
with subsidiaries Amway, Quixtar and Access
Business Group—the latter to consolidate
manufacturing and distribution for the enterprise.

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 At the helm of Alticor are Steve Van Andel (Chairman) and Doug DeVos
(President), jointly holding the Office of the Chief Executive. Today each area of the
business, including Amway, has the freedom to build on its strengths. Amway continues to
be a leading company in the direct selling industry. Its fundamental principles—freedom,
family, hope and reward—hold as true today as they did in the very beginning.

Amway continued to expand, reaching past the borders of the US to offer the same
opportunities in other countries:
- Australia - 1971
- Europe and parts of Asia - 1974
- Japan - 1979
- Latin America - 1985
- China - 1995
- Africa - 1997
- India - 1998
- Russia - 2005
- Vietnam -- 2008

Awards
 As a corporate leader in promoting environmental awareness and education, Amway
received the prestigious United Nations Environment Programme Achievement
Award in 1989.
 Corporate Citizenship Award - On November 08, 2005, the United States Chamber
of Commerce awarded Alticor with the Corporate Citizenship Award in the category
of International Community Service for the One by One Campaign for Children

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 AMWAY INDIA
Amway promotes individual entrepreneurship through its innovative direct selling
approach of world class consumer products. Amway India is the country’s leading direct
selling FMCG-company which manufactures and sells world-class consumer products. Its
business opportunity and all its products are covered by 100% Money Back Guarantee.
Amway sources all its products from within India, thereby providing stimulus to the local
manufacturing industry.
 
Amway India is a wholly owned subsidiary of US $ 7.2 billion Amway Corporation,
Ada, Michigan, USA. Established in 1995, Amway India commenced its commercial
operations in May 1998 and has emerged as the largest Direct Selling FMCG Company. The
Company is headquartered at the National Capital Region of India - New Delhi. Amway has
invested in excess of US $ 35 million (Rs. 151 crore) in India of this; US $ 6 million (Rs. 26
crore) is in the form of direct foreign investment. Amway India has 400 full time employees
and has generated indirect employment for 1,650 persons at all the contract manufacturer
locations.

The Company has provided income generating opportunity to over 4,50,000 active

independent Amway Business Owners. Amway India provides free and unlimited training to
all its distributors to help them grow their business. Amway India conducted over 29,000
training sessions during in the past 12-months with an attendance of over 1.5 million
Amway Business Owners and prospects. Amway India recorded a sales turnover of over Rs.
800 crore during January’07 –December’07. Amway India is a member of the Indian Direct
Selling Association (IDSA). The IDSA is an industry regulatory body, with several reputed
international and Indian Direct Selling companies as members. Amway India is also a
member of the Confederation of Indian Industries (CII) and Federation of Indian Chambers
of Commerce (FICCI).

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 In ten years of commercial operation, Amway India has established a nation-wide
presence in over 125 offices and 55 city warehouses and four regional mother warehouses.
The distribution and home delivery network set up with the support of independent logistics
partners is spread across over 3,000 locations.

Amway Opportunity Foundation (AOF)  

Amway Opportunity Foundation (AOF) a registered non-profit organization which looks
after Amway India’s Corporate Social Responsibility (CSR). Amway distributors are also
volunteers of AOF and they have enthusiastically participated in all AOF activities.
Globally, Amway’s CSR campaign is known as the One by One Campaign for Children. 
 
Promoting Free Enterprise and Self-Employment 
Amway has conducted several seminars on ‘Entrepreneurial Development and Direct
Selling’ in concert with the Confederation of Indian Industries (CII) and the All India
Management Association (AIMA) on the benefits of organized direct selling.  
 
Member - IDSA (Indian Direct Selling Association)  
Amway India Enterprises Pvt. Ltd. is a member of the India Direct Selling Association. The
Indian Direct Selling Association is an association of companies engaged in the business of
direct selling in India. Its members are of high national and international repute having set
standards in delivering quality goods and in following ethical business practices.

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 TERMS USED IN AMWAY
IBO/ABO/AIE-Independent Business Owner/Amway Business Owner/Amway
Independent Entrepreneur is a business partner of Amway who is authorized to market
and distribute products and services available from Amway. Different names are used in
different markets.

Distributor - an older term for IBO.

PV — Point Value is a value assigned to each product or service sold by Amway. An IBOs
monthly performance bonus bracket depends on total PV in a month.

BV — Business Volume is typically the wholesale cost of the product or service sold by
Amway. Performance bonuses are multiplied by the group’s total BV.

Performance bonus is the monthly bonus paid by Amway to IBO's. The higher the PV, the
greater the percentage earned. In North America the Performance bonus ranges from 3% to
25%. In other markets it ranges from 3% to 21%. In India it ranges from 6%-21%.

Retail Profit is the markup earned by an IBO when they sell a product to a consumer, either
personally or through an Amway website. Recommended retail markup ranges from 20%-
35%.

Sponsor is an IBO who refers (sponsors) a new IBO to Amway, although IBO's do not get
paid to sponsor.

Upline is the term used to refer all the IBOs up in the line of sponsorship of an IBO.

Downline is the term used to refer all the IBOs down in the line of sponsorship of an IBO.
They are collectively also known as group.
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Leg refers to a personally sponsored IBO and all of their downline.

Silver Producer is an IBO who has reached the maximum bonus level for one month.

Gold Producer is an IBO who has reached the maximum bonus level for three months.

Platinum or direct is an IBO who has reached the maximum bonus level for six months. In
North America Platinum is generating a minimum of approximately $30,000 in sales
volume per month.

Emerald a distributor with at least three legs generating Silver Producer volume for at least
6 months of a year.

Diamond a distributor with at least six legs generating Silver Producer volume for at least 6
months of a year.

Q-12 is a Platinum or higher IBO that qualifies every month for 12 months of a year.

Independent Business Owner (IBO)

An IBO is, literally, an Independent Business Owner: an individual or individuals
who own and operate their own business, which is powered by Amway North America,
formerly Quixtar. IBOs are the CEOs of their own businesses, and they make many of the
same daily business decisions other business executives make. As independent business men
and women, IBOs decide how active to be in their business, what products to sell and at
what prices, who to sponsor, what hours to keep, and other important decisions. IBOs are
independent contractors; they are not employees of Amway North America or Amway
Corporation. As independent business owners, IBOs are free to make decisions many others
in business are not free to make.

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Independent Business Owners Association International (IBOAI)
The IBOAI (IBOA International or Independent Business Owners Association
International) is a trade association representing Independent Business Owners affiliated
with Amway North America, formerly Quixtar. It is the primary advocacy organization for
IBOs in North America. A trade association is an organization of business people who share
common interests or concerns, and who educate and represent their members. The IBOAI
(or IBOA International) is one example.

Role of the IBOAI Board

The IBOAI Board is the representative body of the Association acting on behalf of all
IBOs. With IBO input, support, and participation, the IBOAI Board listens to ideas,
proposes improvements, and advises Amway on the best way to move the business forward.
Working closely with corporate staff, the Board advises Amway on every facet of the
business, from products and promotions to operations and business guidelines, as it has for
50 years. Together, they bring positive change to this business, to keep it moving forward
and make certain the business is better for every generation.

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 PESTLE ANALYSIS
Political
Political factors are how and to what degree a government intervenes in the economy.
Specifically, political factors include areas such as tax policy, labour law, environmental
law, trade restrictions, tariffs, and political stability. Furthermore, governments have great
influence on the health, education, and infrastructure of a nation.
 With the flow of Liberalization in India many foreign companies have
invested in India.
 Production base in India help Amway for Government allowances.
 Supportive for India’s entry into WTO.

Economical
Economical factors include economic growth, interest rates, exchange rates and the inflation
rate. These factors have major impacts on how businesses operate and make decisions.
 Localization of production and raw materials.
 Own production plant in India.
 50% of raw materials acquired itself from India.
 Localization of employees
 More than 2000 employees were Indians.

Social
Social factors include the cultural aspects and include health consciousness, population
growth rate, age distribution, career attitudes and emphasis on safety. Trends in social
factors affect the demand for a company's products and how that company operates.
 Active involvement of community
 Financial and human support in areas of human services education, art, culture, etc.
 Invested $ 4 million for this purpose

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Technological
Technological factors include technological aspects such as R&D activity, automation,
technology incentives and the rate of technological change. They can determine barriers to
entry, minimum efficient production level and influence outsourcing decisions.
 Setup R&D department
 Invested $ 1.5 million
 Developed new and tailored products like whitening make up for Indian women.

Legal
Legal factors include discrimination law, consumer law, antitrust law, employment law, and
health and safety law. These factors can affect how a company operates, its costs, and the
demand for its products.

Environmental
Environmental factors include ecological and environmental aspects such as weather,
climate, and climate change, which may especially affect industries. Furthermore, growing
awareness of the potential impacts of climate change is affecting how companies operate
and the products they offer.
 Amway products are 100% natural products, so they not affect our Environment.
 Amway recycle its waste bottles & containers

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 PRODUCTS AND SERVICES
Over 450 unique, high-quality products carry the Amway name in the areas of
nutrition, wellness, beauty and home, as well as commercial products and a variety of
services (from which 105 products are offered in India). In addition, Amway independent
business owners in selected markets sell additional brand-name goods through local
merchandise catalogues, plus a variety of services and educational products. All products
are backed by a customer satisfaction guarantee.

Nutrition and Wellness

Nutrilite® is the world’s leading brand of vitamin, mineral, and dietary supplements, grown
harvested and processed on its own certified organic farms.

Cosmetics
Our skin is the outward appearance of who or what we are , or what we would like to be.
But it is more than a simple cover. It is the largest organ of our body - a complex and
dynamic system that is vital to our health and reflects it as well.

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Artistry®
Artistry® is one of the world’s top five largest-selling prestige brands of facial skin care and
colour cosmetics.

Attitude®
All products of Attitude contain Skin Vitalizing Complex that synergistically combine to
cleanse, Replenish & Moisturize the skin making it soft & supple.

Home Care
Amway’s Home Care Brands provide complete cleaning systems that fit with everyone’s
needs. Their versatile, effective product systems offer the features and benefits consumers
want. No matter what your lifestyle, Amway’s Home Care products make light work of your
cleaning chores.

SA8®
SA8 Gelzyme is India's only 3-in-1 laundry detergent which pretreats, cleans and softens.

LOC®
LOC High Suds is a multipurpose household liquid cleaner.

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Dish Drops®
Dish Drops is a concentrated hand dishwashing liquid with a powerful "Triadic Detergency
System".

Personal Care
Amway Personal Care products have built global reputation based on their world-class
research and development. These products are designed to deliver the ultimate grooming
experience and the confidence that lasts long.

Glister®
Glister Toothpaste is a revolutionary Multi-Action Toothpaste with Sylodent that offers
seven benefits.

Persona®
Persona Premium 3 in 1 Soap is a complete soap for the entire family promises refreshing
confidence.

Satinique®
Satinique Advanced Range with unique Ceramide Infusion System uses nature's own
renewing technology to rejuvenate, strengthen and protect your hair.

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Dynamite®
Dynamite's range of male grooming products, formulated internationally is designed to
deliver the ultimate grooming experience.

G&H®
G&H Range enriched with the goodness of Glycerine and Honey, deeply nourishes and
hydrates the skin for a healthy glow.

Apart from this Amway also deals in Air purifiers and Water purifiers, Jewellery,
Electronics, & Insurance products.

Manufacturing Strategy
Almost all Amway India products are manufactured in the country through third
party contract manufacturers. With the exception of Cosmetics range (Artistry*) and some
products in Nutrition and Wellness category, all Amway India products and bottles are
manufactured in India.
The products match Amway’s global quality standards. They carry a tamper-proof
seal and a ‘100% Money Back Guarantee'. If not completely satisfied with the product, the
consumer can return it for a refund.  Amway products are environment friendly, and are not
tested on animals. Amway encourages the return of its used product bottles for re-cycling
and to prevent their misuse.
To bring the identified contract manufacturers’ production facilities and skills to
international standard, Amway has invested in excess of US$ 4 million (approx. Rs. 17
crore). The transfer of this state-of-the-art, world-class technology, has been free of cost.

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 SALES AND MARKETING PLAN
The Amway is private co operative organization. The Amway Sales and Marketing
Plan put you in control, allowing you the flexibility to work where and when you want,
giving you time for family and friends as well as the opportunity to earn a good income. It
adapts easily to your needs and ambitions, and grows with them, offering you all the
personal support and assistance you require to become the Business Owner you want to be.
With Amway you are Connected to the global leader in multilevel marketing, with over 40
years of experience, Supported by great products and people who will help you succeed,
and finally In Control of your life.

The Amway Sales and Marketing Plan is a low risk, low start-up cost business
opportunity that is open to everyone. It allows you to build your business through retailing
products and sponsoring other people who, in turn, can retail products and offer the business
opportunity to others. By passing your sales and marketing knowledge to your developing
team, you not only build your own business network but also enable others to build one of
their own.

Marketing strategy
A strategy is a plan of action designed to achieve the goals of the organisation. In
creating a marketing strategy for the Super Concentrated Cleaning System, Amway needed
to set out the key objectives it wanted to achieve. The following objectives for the brand
were set:
 To increase distribute or profitability and productivity by providing a new and
exciting business opportunity
 To optimize consumer convenience and value through enhanced product
differentiation with this exclusive and revolutionary cleaning system
 To provide innovative and unique products to enhance the image of Amway Home
Care.

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A New Strategy of Amway
 Agreement with the government and company
 Resumed Operations
 Goods will be sold in retail outlets and through
 Sales Representatives
 Income of sales distributors will be based on direct selling done by them
 Same Distribution centers served as retail outlets for the company
 Localization of employees
 Localization of production and Raw Material
 Localization of research and development
 Transparency and Credibility of company’s management

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 SWOT ANALYSIS OF AMWAY
STRENGTH
 Based on direct selling operations. Hence it can be A home based business. Every
can participate in business. It’s easy to get admission in Amway with easy rout like
intent.
 Training to staff.
 Functions are performed by IBOs.
 Organize meetings and events time to time.
 Have good customer service system.
 Backed by a 100% Customer Product Refund Policy produce faith and reselling
attitude in customers.
 Quality Products that Inspire Confidence. Almost no risk of money as world class
quality Minimal start up costs gives strong base to the initiation of business. So
everyone can participate in business. The person who wants do something can be
make profit with investment of low cost.
 Products are easy to sell.
 A business with national and international scope gives more opportunity to the
costumers.
 The possibility of financial security and freedom of time to enjoy life.

WEAKNESS
 More power to IBOs gives critical structure to organization.
 Initially high entry cost leads to somewhat restrictions for business development.
 Rumors for direct selling operations.
 Focus shifted from selling products to recruiting.

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OPPURTUNITIES
 Setup a manufacturing plant in all countries leads to better platform for company.
 Population of INDIA gives better opportunity to company to receive more profit.
 As the company name itself gives reliance and faith for the customer and buyer
produce greater opportunity for marketing which leads to decrease in total
expenditure of company.

THREATS
 Too much freedom to IBOs.
 Change in government policy may affect to the profit and freedom of company.
 Competitors like AVON, MARY KAY; SUNRIDER creates lot of competition in
market which leads to strong marketing competition in market.

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 USE OF MLM IN AMWAY
Multi-level marketing (MLM) is a marketing strategy in which the sales force is
compensated not only for sales they personally generate, but also for the sales of others they
recruit, creating a downline of distributors and a hierarchy of multiple levels of
compensation. Other terms for MLM include network marketing, direct selling, and
referral marketing.

Although the products and company are supposed to be marketed directly to

consumers and potential business partners by means of relationship referrals and word of
mouth marketing, critics have charged that most MLMs are pyramid schemes.

MLM companies have been a frequent subject of criticism as well as the target of
lawsuits. Criticism has focused on their similarity to illegal pyramid schemes, price-fixing
of products, high initial start-up costs, emphasis on recruitment of lower-tiered salespeople
over actual sales, encouraging if not requiring salespeople to purchase and use the
company's products, potential exploitation of personal relationships which are used as new
sales and recruiting targets, complex and sometimes exaggerated compensation schemes,
and cult-like techniques which some groups use to enhance their members' enthusiasm and
devotion. Not all MLM companies operate the same way, and MLM groups have
persistently denied that their techniques are anything but legitimate business practices.

Amway use direct Selling model to sell its products & services. For this Amway
offer membership to their potential customers. These members also act as agents for Amway
& sell their products entirely on their wish. Amway provide points on each product sell to
their IBO which further get converted into monetary terms. Also, these points have
worldwide acceptance.

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 To start the Amway Business one needs to buy the Amway Business Kit and be
sponsored in the business by an already existing Amway Business Owner. Despite what you
may have heard, starting an Amway business doesn't involve handing over large amounts of
cash. With your efforts and our knowledge, the Amway opportunity can become everything
from a means of earning a little extra cash to building an international business. Where do
you want to go?

Business Kit--Priced at Rs995 only

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 CONTROVERSY
Pyramid Scheme Accusations
Amway has several times been accused of being a pyramid scheme. A 1979 FTC
investigation in the United States (see below), a 1997 Belgian court and a 2008 court
judgment in the United Kingdom all dismissed these claims.

FTC Investigation
In a 1979 ruling, the Federal Trade Commission found that Amway does not qualify
as a pyramid scheme since Amway compensation system is based on retail sales to
consumers, not payments for recruiting.
It did, however, order Amway to stop retail price fixing and allocating customers
among distributors and prohibited the company from misrepresenting the amount of profit,
earnings or sales its distributors are likely to achieve with the business. Amway was ordered
to accompany any such statements with the actual averages per distributor, pointing out that
more than half of the distributors do not make any money, with the average distributor
making less than $100 per month. The order was violated with a 1986 ad campaign,
resulting in a $100,000 fine.

Amway Andhra Pradesh (India)

In September 2006, following a public complaint, Andhra Pradesh state police (CID)
initiated raids and seizures against Amway distributors in the state, and submitted a petition
against them, claiming the company violated the Prize Chits and Money Circulation
Schemes (banning) Act. They shut down all offices of firm Amway, and Arijit Saha writes
that "with it the fate of 80,000 distributors of the company has been indefinitely sealed". The
enforcement said that the business model of the company is illegal. The Reserve Bank of
India (RBI) had notified the police that Amway in India may be violating certain laws
regarding a "money circulation scheme" and the IB Times article writes that "some say ...
Amway is really more about making money from recruiting people to become distributors,
as opposed to selling products."The complaint was initiated following a dowry dispute
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between a local man and his wife, an Amway distributor. Following a petition by Amway,
the state High Court issued an injunction against the CID and stated the Act did not prima
facie apply, however after Amway requested the CID petition be dismissed the High Court
declared that if police allegations were true, Amway's Indian subsidiary would be in
violation of the act and the investigation should continue. On August 14, 2007 the Supreme
Court of India ordered the state police to complete the investigation against Amway in 6
months. In 2008, citing the High Court decision, the Andhra Pradesh state government
enacted a ban on Amway media advertisements. Amway challenged the ban and in July
2009 the AP High Court refused a petition the ban should be enforced. As of June, 2009 the
original 2006 CID case was still pending at the Chief Metropolitan Magistrate Court in
Hyderabad.

Class Action Settlement

On November 3, 2010, Amway announced that it had agreed to pay $56 million - $34
million in cash and $22 million in products - to settle a class action that had been filed in
Federal District Court in California in 2007. The class action, which had been brought
against Quixtar and several of its top-level distributors, alleged fraud, racketeering, and that
the defendants operated as an illegal pyramid scheme. While noting that the settlement is
not an admission of wrongdoing or liability, Amway acknowledged that it had made
changes to its business operations as a result of the lawsuit. The settlement is subject to
approval by the court, which is expected in early 2011. The economic value of the
settlement, including the changes Amway made to its business model, totals $100 million.

Canadian Tax Case

In 1983, Amway pleaded guilty to criminal tax evasion and customs fraud in Canada,
resulting in a fine of $25 million CAD, the largest fine ever imposed in Canada at the time.
In 1989 the company settled the outstanding customs duties for $45 million CAD. In a 1994
interview, Amway co-founder Rich DeVos stated that this incident had been his greatest
"moral or spiritual challenge", first in "soul searching as to whether they had done anything

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wrong" and then for pleading guilty for technical reasons, despite believing they were
innocent of the charges. DeVos stated he believed that the case had been motivated by
"political reasons".

RIAA Lawsuit
The Recording Industry Association of America (RIAA), as part of its anti-piracy
efforts, sued Amway and several distributors in 1996, alleging that copyrighted music was
used on "highly profitable" training videotapes. Amway denied wrongdoing, blaming the
case on a misunderstanding by distributors, and settled the case out of court for $9 million.
In a related lawsuit initiated by the distributors involved, the Court established that Mahaleel
Lee Luster, who had been contracted to make the videotapes, had violated copyright without
the knowledge of three of the five of those distributors.

Procter & Gamble

Some Amway distributors were involved with an urban legend that the (old) Procter
& Gamble service mark was in fact a Satanic symbol or that the CEO of P&G is himself a
practicing Satanist. (In some variants of the urban legend, it is also claimed that the CEO of
Procter & Gamble donated "satanic tithes" to the Church of Satan.) Procter & Gamble
alleged that several Amway distributors were behind a resurgence of the urban legend in the
1990s and sued several independent Amway distributors and the company for defamation
and slander. The distributors had used Amway's Amvox voice messaging service to send the
rumor to their downline distributors in April 1995. After more than a decade of lawsuits in
multiple states, by 2003 all allegations against Amway and Amway distributors had been
dismissed. In October 2005 a Utah appeals court reversed part of the decision dismissing the
case against the four Amway distributors, and remanded it to the lower court for further
proceedings. On 20 March 2007, Procter & Gamble was awarded $19.25M by a U.S.
District Court jury in Salt Lake City, in the lawsuit against the four former Amway
distributors. On November 24, 2008 the case was officially settled.

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Amway UK
In May 2007, the UK Department of Trade and Industry (DTI) accused Amway and
distributor organizations Britt WorldWide and Network TwentyOne UK of "objectionable
practices" and petitioned to wind up the companies. The case against Amway was dismissed
in 2008 on the condition that a full earnings disclosure is published publicly, no registration
or renewal fees are charged and that the sale of business support materials are prohibited.
The case against Network 21 was dismissed in 2009.

Welcome to Life (Poland)

In 1997, Amway Poland and Network TwentyOne separately sued the makers of a
Polish film Welcome to Life for defamation and copyright violations. The film was banned
while the suit proceeded, the first banning of a film in Poland since the fall of Communism.
In 2001 Network 21 won their case and the producers were ordered to remove the violating
material. In 2003 the producers were convicted of libel, order to pay a fine to a children's
charity and publish a public apology.

Other Issues
A Dateline NBC report from 2004 picked up the criticism against some Amway
distributor groups. Amway subsequently published a website with a response to the Dateline
report.
Some Amway distributor groups have been accused of using cult-like tactics to
attract new distributors and keep them involved and committed. Allegations include
resemblance to a Big Brother organization with paranoid attitude to insiders critical of the
organization, seminars and rallies resembling religious meetings and enormous involvement
of distributors despite minimal incomes. An examination of the 1979–1980 tax records in
the state of Wisconsin showed that the Direct Distributors, comprising less than 1% of all
distributors, reported a net loss of $918 on average.
Sociologist David G. Bromley calls Amway a quasi-religious corporation having
sectarian characteristics. Bromley and Shupe view Amway as preaching the Gospel of

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Prosperity. Economists Bhattacharya and Mehta propose an alternative economic
explanation to negative claims, concluding that distributors' continued involvement despite
minimal economic return results from social satisfaction compensating for less economic
satisfaction.

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 CONCLUSION
Amway is one of the largest direct selling company in the world. The main objectives
of Amway are to profit there distributers by eliminating the middlemen and provide the
products to the distributers in cheaper price. The products of Amway are world class
product quality. They are made up of natural a thing that’s why they are good for health and
environment.
Amway covers a wide range of products from beauty care. Health care, to clothing,
and daily use products etc. the products are costly as compared to other branded products
available in market but if we compare the quantity while using the products require less
amount and thus can be used for longer time. Successful business today depends upon a
company's ability to quickly adapt to changes in the marketplace.
At Amway, they pride it selves on knowledge of the dynamic networking market that
is quickly becoming central to modern business. This knowledge, and its willingness to act
upon it, has enabled us to become one of the industry's technological leaders. Through they
continued pursuit of new product ideas, and by consistently refining our existing product
line, they have become one of the top providers of cutting-edge networking products in the
global market. If you're looking for high quality products and solid customer support at
rock-bottom prices, then choosing Amway really does make sense.

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 SUGGESTIONS
 Trial packs should be used because customer must have to introduce the product.
Once customer gets idea about product he comes to know advantages of products.
 The products should be cheap the home delivery system takes at least two days to
deliver the products so the delivery should be instant.
 There must be multiple options for purchasing the products for distributers like
online, tale and instant purchasing.
 In every city, the Amway office should be situated in such a location so that it is in
reach of all distributers.

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