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Home / Business

Amway readies to rock a new generation

By Maria Slade
NZ Herald·
20 Jan, 2009 03:00 PM3 mins to read

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Amway President Douglas DeVos believes there is more potential in its $20 million New Zealand business. Photo / Brett Phibbs

Amway President Douglas DeVos believes there is more potential in its $20 million New Zealand business. Photo / Brett Phibbs

KEY POINTS:

Remember the cleaning products, the evangelistic salespeople, the rags-to-riches promises?

Amway has faded from the suburban consciousness in recent years. So it may surprise many to know that the direct seller of everything from vitamins to beauty products is undergoing a process of rejuvenation.

Accused of being a pyramid scheme in the 1970s, embroiled in a Canadian criminal fraud case in the 1980s, Amway is about to turn 50.

After restructuring and dropping the name in the early 2000s the company is pouring millions into reviving the Amway brand - including sponsoring a tour by the grandmother of rock'n'roll, Tina Turner.

Dropping into Auckland by private jet for a 21-hour visit yesterday, President Doug DeVos lamented missing the chance to meet Turner.

The youngest son of Amway co-founder Rich DeVos, he said the Turner sponsorship had been "very, very well received".

"We hadn't done any brand building or advertising for years - that was a way to kind of get back into the marketplace."

In the late 1980s three-quarters of Amway's business was in the United States. Now about 80 per cent of it is outside the country.

Although it describes its $20 million New Zealand business as "mature" the market is part of that worldwide position, and DeVos sees potential here.

The US$7 billion ($13.1 billion) company had a target of doubling its business within five to seven years, he said, and while that growth was perhaps not possible in New Zealand, the Amway model appealed to immigrant groups here.

As in Third World countries, it provided an opportunity to those with little but an entrepreneurial spirit and a work ethic. "The Amway business allows people to connect to economic development that they may not have otherwise been able to connect to."

Amway products are sold through around three million "Independent Business Owners (IBOs)", whose aim is to build a network of other IBOs and earn commission on what those under them sell.

Stories of Amway brainwashing have been rife - a 1980s book called Amway: The Cult of Free Enterprise described 12-hour mass rallies with chanting and incitement to fight against communism.

How does DeVos answer those claims today?

"Had that happened? Yes," he said. "Have we had a meeting where I went, 'wow, why would somebody have ever done that?' Sure."

But that was Amway of a bygone era, and some claims were exaggerated. "It does speak to the challenge of making sure everybody's experience with the business today is a positive experience."

Maintaining ethical standards was something Amway was investing in heavily, particularly in ensuring claims about products and earning potential were not overstated.

While hard times did present an opportunity to recruit more people to Amway, the company was careful.

"This is not a get-rich-quick scheme, this is not an immediate solution to being made redundant."

DeVos said claims that up to 99 per cent of IBOs made no money from Amway were "inaccurate", but half did leave within a year. "That's too many. Our objective is to do a better job of helping people make more money sooner."

Amway's connections to the Christian right are well known, with Rich DeVos reported to support extremist Christian groups.

"I think it's very fair to say I grew up in a Christian household, and that's a faith that I have," said Doug.

But he added: "I think my father is really anything but extreme ... I think he's very strong in his beliefs but very open-minded and welcoming to people and that's what we try to be as a business as well.

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