Type: Private

Founded: 1959
Headquarters: Ada, Michigan
Steve Van Andel
Key people: Doug DeVos
Lynn Lyall
Industry: Multi-level marketing
Website: www.amway.com

Amway is a multi-level marketing (MLM) or technically called network marketing

company founded in 1959 by Jay Van Andel and Rich DeVos (father of Michigan
gubernatorial candidate Dick DeVos). The company's name is a portmanteau of
"American Way." [1] Based in Ada, Michigan, the company and family of companies
under Alticor reported sales of $6.4 billion for the performance year ending August 31,
2005, marking the company’s sixth straight year of growth. Its product lines include
personal care products, jewelry, dietary supplements, water purifiers, air purifiers and
cosmetics also other products from top brands, called "personal shopper catalog". Amway
conducts business through a number of affiliated companies in more than ninety countries
and territories around the world [2]. A private company is a company that is
independently owned. ... Official language(s) None (English, de-facto) Capital Lansing
Largest city Detroit Area Ranked 11th - Total 97,990 sq mi (253,793 km²) - Width
239 miles (385 km) - Length 491 miles (790 km) - % water 41. ... It has been suggested
that Network marketing be merged into this article or section. ... It has been suggested
that Network marketing be merged into this article or section. ... It has been suggested
that this article or section be merged into Multi-level marketing. ... Jay Van Andel,
(1924-2004) American businessman best-known as the co-founder of the Amway
Corporation, was born in Grand Rapids, Michigan, June 3, 1924. ... Richard DeVos
(1926-) is one of the founders of Amway, reorganized as Alticor in 2000, now distributes
more than US$4. ... Dick DeVos at a campaign stop in Midland, Mich. ... Look up
Portmanteau word in Wiktionary, the free dictionary. ... Ada Township is a township
located in Kent County, Michigan, United States. ... Alticor is a privately-held
corporation, owned by members of the DeVos and Van Andel families. ... Closeup of a
womans eye while wearing makeup Cosmetics or makeup are substances to enhance the
beauty of the human body, apart from simple cleaning. ...

The original intent of Amway's founders was to create a business using a novel means of
product distribution that facilitates entrepreneurialism, understanding of economic
management, and economic independence among its associates (i.e. distributors; the term
currently in use is Independent Business Owners, or IBOs).

While Amway has been successful in implementing this ideal, some controversies have
developed around their business models. Rich DeVos also wrote a book called
"Compassionate Capitalism" while Jay Van Andel also wrote another one called
"Enterprising Life".
Contents
• 1 Quixtar
• 2 The Corporation
o 2.1 Pin Levels
o 2.2 "Crown Ambassador"
o 2.3 Lines of Sponsorship
• 3 Supporters
• 4 Controversy
• 5 Political causes/Culture
• 6 Legal rulings
• 7 Other violations
• 8 External links and references

• 9 Resources

Quixtar

In 1999 the founders of the Amway corporation launched a sister (and separate) Internet-
based company named Quixtar. The Alticor corporation owns both Amway and Quixtar,
plus several other concerns. Quixtar replaced the North American business of Amway in
2001, with Amway operating in the rest of the world. Amivo acts as an Amway
subsidiary in Europe. Quixtar is a multi-level marketing company, founded in 1999 by
the families of Richard DeVos and Jay Van Andel. ... Alticor is a privately-held
corporation, owned by members of the DeVos and Van Andel families. ... World map
showing Europe Political map Europe is one of the seven traditional continents of Earth;
the term continent here referring to a cultural and political distinction, rather than a
physiographic one, thus leading to various perspectives about Europes precise borders. ...

The Corporation
An Amway Independent Business Owner (or IBO, formerly known as a Distributor)
purchases products from Amway at rates published as wholesale prices. Wholesaling
consists of the sale of goods/merchandise to retailers, to industrial, commercial,
institutional, or other professional business users or to other wholesalers and related
subordinated services. ...
Each product/service has an associated Points Value (PV), which is the same for that
product all around the world. It operates like an international currency, which represents
the amount of profit inherent in the product. The sum of the group's PV determines the
commission level (3%, 6%, ... 25%) payable. The Business Volume (BV) turns the PV
into the local currency, after removing items such as value added tax (which obviously
cannot be part of the profit). The commission level is applied to the BV in determining
the monthly payments to be received as commission. To meet Wikipedias quality
standards, this article or section may require cleanup. ... It has been suggested that
MOMS be merged into this article or section. ...

As in most MLM businesses, a person wishing to join Amway is "sponsored" by an

existing IBO. This involves the new IBO purchasing an Amway Opportunity Kit or
Business Pack. The kit also contains literature and some starter product. IBOs must pay a
yearly fee to remain in Amway, although they are not required to buy a minimum amount
of products.

Amway claims to have 4 million distributors worldwide who have renewed at least once,
including 500,000 in the U.S. Japan represents a very fast-growing market with 1 million
distributors. Amway received permission to establish a network in the People's Republic
of China and achieved sales of over 2 billion U.S. dollars in 2004 and 2005. [citation needed]
However, due to a ban on direct sales, Amway cannot conduct Chinese operations in
exactly the same manner that it does elsewhere.

Training organizations exist to offer a variety of business services to IBOs as well as their
prospective business partners. This includes training seminars, CDs and literature. Often,
public meetings are made available as a way of helping present the concept to prospects.
These are conducted independent of Amway preview by independent business
organization groups within Amway. A seminar is, generally, a form of academic
instruction, either at a university or offered by a commercial or professional organization.
...

Amway's distributors are organized hierarchically, and the corporation employs a system
of pin levels to reward successful distributors (so-called because attainees are awarded a
stick pin to indicate their level.) Higher-level distributors act as mentors to newer
distributors, organize regular meetings of their group and (controversially) may derive
most of their profit from the sale of motivational tools to them. "Crosslining," or
associating with people from a different "leg" or distributor chain, is generally
discouraged.
Pin Levels

Pin levels reflect the level an IBO has reached in the Amway business. As such they are
an indication of both the size of an IBO's group and their income, and by extension the
IBO's knowledge and expertise in the field. Top pin level IBOs may have groups
numbering hundreds or thousands of people, and are in high demand. They also
command respect and adulation from their group. High pin levels are named after
precious metals or gems to convey a sense of the wealth that they are supposed to
represent.

The lowest pin levels reflect successively higher volumes of PV sold through the IBO's
group, and are named after the percentage bonus that each level pays.

The first significant pin level is that of Platinum (formerly known as a Direct.) The term
Direct came from distributors beginning to get products sent to them directly from the
corporation after attaining this level, as opposed to previously having bought them via
their "sponsoring" distributor. (These days the "Direct" concept is defunct, as all IBOs
order their product direct from Amway.) This level requires the IBO's group to be
moving 7,500 PV (or 10,000 PV in some countries) of product per month, and the
Amway recruitment plan customarily shows that such a group will have a total of 70-100
people; although in practice that number is often larger. The income at the Platinum level,
generally speaking, is approximately the same as the average full-time wage in the IBO's
country of origin, although this will depend on a number of factors including business
structure, volume of retail sales versus group sales, and the total PV turnover. Variations
typically range from half to over double the average full-time wage.

A significant pin level is that of Diamond. This level requires that six people the IBO has
sponsored have themselves reached the Platinum level (or higher). The remuneration at
Diamond is (generally) a "six-figure" passive annual income, and advertised to represent
financial freedom for the IBO. Almost all IBOs aspire to this pin level because of this
"freedom" aspect.

(Note that it cannot merely be assumed that the income of a Diamond IBO is a simple 6x
multiple of the income of a Platinum, since there are several other ranks between
Platinum and Diamond, and monetary bonuses are paid as a result of having attained
these as well.)

The highest level is Crown Ambassador. This level used to require at least twenty legs,
each at least at the Platinum level. There is one Double Crown Nakajima, Kaoru from
Japan. Amway has introduced a system called FAA Points, where it is possible to become
a Crown Ambassador with only 9 legs - however each needs to have a Diamond within
that leg. This is helping create much more stable sustainable businesses.

Only a small number of people have attained this pin level, and they are in constant
demand for recruitment, training and motivational speaking engagements.

Other pin levels include Ruby (15,000 PV per month), Emerald (three Platinum legs), and
Executive-, Double- and Triple Diamond (nine and twelve and 15 Platinum legs
respectively - or with differing numbers of FAA Points.)

On top of the remuneration for PV moved through their group, an IBO may be entitled to
additional monetary incentives. These bonuses are paid for meeting growth targets,
extraordinary recruitment number, etc and can represent a significant portion of an IBO's
income.

Alticor recently started a program that makes it possible to attain the Crown Ambassador
level with only 9 legs. If all of the 9 legs are Diamonds, the IBO receives 27 FAA points
as every Diamond counts for 3 FAA points. This allows for greater earnings than with the
"old-fashioned way." Additionally, approximately 80 FAA-points would guarantee a 7
figure bonus (USD) per year.

"Crown Ambassador"

By way of their seniority most Crown Ambassadors[3] sit on various Amway boards,
deciding business policy which affect all IBOs worldwide. Most also run, or contribute
heavily to, their own motivational organizations. To meet Wikipedias quality standards,
this article or section may require cleanup. ...

Dexter Yager, one of the biggest landowners in Charlotte, North Carolina is probably one
of the most famous American Crown Ambassador. He created a training system of
functions, books of the month, and tapes. Flag Nickname: Formal: The Queen City,
Hornets Nest - Informal: The City of Churches, Tree City USA Location Location in
Mecklenburg County in the state of North Carolina Coordinates: Government Country
State Counties United States North Carolina Mecklenburg County, North Carolina Mayor
Pat McCrory, (R) Geographical characteristics Area 280. ... Brockhaus Konversations-
Lexikon, 1902. ... Look up Tape in Wiktionary, the free dictionary. ...

Berniece Hansen, the widow of early Amway partner Fred Hansen, is another Crown
Ambassador who has created a successful Amway operation. She used her wealth to
build the Berniece Hansen Athletic Center at Cornerstone University. Cornerstone
University is a private, independent, non-denominational Christian liberal arts college
located on the east side of Grand Rapids, Michigan. ...

Lines of Sponsorship

A line of sponsorship (LOS or line of affiliation) is an essential organizational concept in

Amway organizations - since a new member (the downline) can only link in by
connecting underneath an existing member (the upline). [4]

Typically, it is the upline's responsibility to guide and support the new IBO, and thus
there is a higher status associated with being higher up in the Line of Sponsorship.
However, whereas a member's income in some network marketing organizations is
purely determined by one's position in that Line of Sponsorship, under the Amway
structure it is possible for an IBO to earn more than their upline, by building a greater
number of independent Lines of Sponsorship below themselves. It has been suggested
that this article or section be merged into Multi-level marketing. ...

A new IBO signs an agreement upon registration that says he/she will not switch LOS
(Crossline). This protects an upline from having someone transfer out of their business,
even after they have played a significant role in building that group.

Some of the more significant Amway LOS have included: InterNET, Britt World Wide
(BWW), WorldWide Dream Builders (WWDB), TEAM (formerly Team of Destiny),
Alliance Net Solutions (ANS), Empire, True North, eFinity, InterNet Associates (INA),
International Connection, International Leadership Development (ILD), MarkerMan
Productions (MMP), ProAlliance, Interbiz, IBO Alliance, and GlobalNet. [5]

Supporters
John C. Maxwell, a famous Christian author, supports Worldwide DreamBuilders and has
coauthored a book with Crown Ambassador Jim Dornan, founder of Amway-affliated
training company, Network TwentyOne. Paul Harvey, a radio broadcaster, known for his
'The rest of the story' tagline has been an ardent supporter of the Amway program for
years. Og Mandino, author of The Greatest Salesman In The World and The Greatest
Miracle In The World, has also been a supporter of the Amway program. Robert
Kiyosaki, author of the all time best-selling (but controversial) business/financial books
Rich Dad, Poor Dad and Cashflow Quadrant, endorses organizations that, according to
him, promote financial literacy. A few of those organizations utilize Amway as a vehicle
to develop a business. Kenneth Copeland and Charles Stanley, well known Christian
pastors and authors, have endorsed or spoken at various functions for some of the
Motivational Organizations. Former President Ronald Reagan has also spoken at such a
conference. Other speakers include MTV's Jeannie Mai, renowned chef and culinary
specialist Jason Roberts, heavyweight boxer Evander Holyfield, and motivational author
Zig Ziglar. Recently, world 100m record holder, Asafa Powell was announced as global
spokesperson for Amway brand Nutrilite, after crediting Nutrilite product Double X with
improving his training prior to breaking the record. John C. Maxwell is an American
pastor, author, and leadership expert. ... It has been suggested that this article or section
be merged into Christianity. ... For the Stuckist artist, see Paul Harvey (artist). ... Og
Mandino is a sales guru and author of the bestselling book The Greatest Salesman in the
World who was also a U.S. military pilot during World War II. His works, based on
fundamental Christian beliefs, were also heavily influenced by the likes of Napoleon Hill.
... Robert Kiyosaki Robert Toru Kiyosaki (ãƒãƒ�ート・トール・ã‚ヨサã‚,
清崎 徹, born April 8, 1947) is an investor, businessman, and self-help author. ...
Cashflow Quadrant: Rich Dads Guide to Financial Freedom, or simply Cashflow
Quadrant for short, (ISBN 0-44667-747-7) is a personal finance and investing book
published in 2000 by Robert Kiyosaki, with Sharon Lechter, C.P.A. It is the sequel to
Kiyosakis first best-seller, Rich... Kenneth Copeland (born December 6, 1936 in
Lubbock, TX) is a Pentecostal preacher and televangelist. ... There have been several
people called Charles Stanley: Charles Stanley (chess player), US chess player Charles
Stanley (Lord of Man), Lord of the Isle of Man 1660_1672 Charles Stanley (Governor of
the Isle of Man), Governor of the Isle of Man 1702-03 and 1715 Charles Stanley (radio
evangelist), US... Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was the
40th President of the United States (1981–1989) and the 33rd Governor of California
(1967–1975). ... Jason Roberts (born January 25, 1978 in Park Royal, London) is a
Grenadian international football player. ... Evander Holyfield (born October 19, 1962 in
Atmore, Alabama) is a professional boxer from The United States. ... Hilary Hinton
“Zig� Ziglar (born November 6, 1926) is a highly successful American author,
salesperson, and motivational speaker. ... Asafa Powell at the Athens Games 2004 Asafa
Powell (born 11 November 1982) is a Jamaican sprinter and current joint 100 m world
record holder (with Justin Gatlin). ... Nutrilite is a brand of nutritional products
manufactured by Access Business Group at its facilities in California. ... Alexander
Kowalski is a popular German techno (music) artist. ...

Supporters in Australia include Former QLD Master Builders president Derek Pingel,
former Federal Parliamentarian Peter Shack, and well known community and spiritial
advocate Brian Houston. Brian and Bobbie Houston Brian Houston is the Senior Pastor
of Hillsong Church in Sydney, Australia. ...
Controversy
Amway (and its American online incarnation, Quixtar) have been controversial for years
because of allegations that these companies are pyramid schemes or cults, despite the
1979 FTC ruling (93 F.T.C. 618 (1979)) that legitimized the Amway business. The case
revealed that most of the products sold by Amway are to the Independent Business
Owners (IBOs) themselves for personal consumption rather than to retail consumers who
aren't enrolled as IBOs. Buying products from Amway or Quixtar gives IBOs points and
they are paid back on the number of points that they generate from personal consumption.
It is claimed to be a business opportunity and hence an existing IBO can help others to
get an IBO number and divert their buying habit from other stores to Amway or Quixtar.
Thus the business grows as a greater number of people join the group. The share of profit
is based on the leverage that an IBO has. Quixtar is a multi-level marketing company,
founded in 1999 by the families of Richard DeVos and Jay Van Andel. ... A pyramid
scheme is a non-sustainable business model that involves the exchange of money
primarily for enrolling other people into the scheme, usually without any product or
service being delivered. ... It has been suggested that cult debate be merged into this
article or section. ... Quixtar is a multi-level marketing company, founded in 1999 by the
families of Richard DeVos and Jay Van Andel. ...

Typically, IBOs spend money on tapes, books, and seminars (known as "tools" in AMO
parlance) which are promoted to IBOs as the preferred way to learn the "business skills of
the IBOs" and to maintain their desire to build their business. These are not provided by
Amway itself but organizations often described as Amway Motivational Organizations
(AMO) in general run by people in the higher ranks of the organization. Claims regarding
the support material range from "can be of help to an IBO " to some organizations
claiming they "are absolutely required" to "build a big business". However, investigations
like one done by MSNBC Dateline in April 2003 suggested that most of the money being
earned by these successful individuals was coming from the hidden "tools" business
rather than through selling the company products. Critics also claim that the materials are
specifically geared towards encouraging IBOs to continue working for a non-economic
return, rather than improving their actual business skills. Proponents of the materials
claim that the "tools" business is the best way to develop a large business, because every
person in their organization can get the same information (as opposed to the results
achieved by "playing telephone" as a child, where one person passes a message onto
another, to another, etc). Proponents note that many IBOs with large numbers of people
in their organization cannot possibly spend the required time teaching every single person
without taking time away from their family or job or other responsibilities.

Crown Ambassador Dexter Yager's organization, the International Dreambuilders'

Association/Digital Alliance (usually simply referred to by the abbreviation IDA) is
arguably the largest and best-known of the AMOs, and is probably the one most
commonly associated with Amway.
Political causes/Culture
Commentators have often identified Amway as supporting the U.S. Republican Party,
and it contributed $4,000,000 to a conservative 527 in the 2004 election cycle. [6]
However, Amway Corporation claims to support no political party. The Republican
Party, often called the GOP (for Grand Old Party, although one early citation described it
as the Gallant Old Party) [1], is one of the two major political parties in the United States.
... A 527 group, is a type of tax-exempt organization, named after a section of the United
States tax code, that is created primarily to influence the nomination, election,
appointment or defeat of candidates for public office. ...

Many of Amway's best-known distributors, including Dexter Yager, have also declared
themselves Republicans. Amway touts the environmental benefits of many of its
products, and in June 1989 the United Nations Environmental Program's Regional Office
for North America recognized it for its contributions to the cause of the environment. An
environment is a complex of external factors that acts on a system and determines its
course and form of existence. ... Klaus Töpfer, UNEP Exec. ...

Senior distributors also promote a world view encompassing Judeo-Christian values, and
a general advocacy of boomer/50s values. The Amway Motivational Organization's
(AMO's) perception of the role of women, though, always includes successful women in
awards, recognition and speaking engagements. One rarely, if ever, sees a male, married
distributor speak on stage without his wife getting equal billing, and explaining her active
role in the business. This is a reflection of the AMOs' strong advocacy of the 1950s style
nuclear family model. A baby boomer is someone who was born during the period of
increased birth rates when economic prosperity arose in many countries following World
War II. In the United States, the term is iconic and more properly capitalized as Baby
Boomers and commonly applied to people with birth years from... The 1950s were the
decade that traditionally speaking, spanned the years 1950 through 1959. ... The term
nuclear family was developed in the western world to distinguish the family group
consisting of parents and their children, usually a father, mother, and children, from what
is known as an extended family. ...

A significant part of the Amway culture is the promotion and sale of training materials, as
well as the attendance at meetings and rallies locally, regionally, and nationally. Training
includes education about the topic of generalized, non-Amway specific entrepreneurship.
The purpose of this is to create interest and enthusiasm. They are intended to maintain
and increase membership, and to inspire IBOs to be more successful in their businesses.
To a casual observer, they have some resemblance to a religious gathering, due to the fact
that most meetings and rallies begin with the Pledge of Allegiance and a prayer. By
involving people in a regular schedule of meetings, people are encouraged to maintain
their focus, and to not be distracted by critics and other nay-sayers. Entrepreneurship is
the practice of starting new organizations, particularly new businesses generally in
response to identified opportunities. ...

Doug Wead, who was a Special Assistant to former U.S. President George H. W. Bush, is
a successful IBO who is a regular speaker at group rallies. Doug Wead Doug Wead was a
Special Assistant to former U.S. President George H. W. Bush, and is the author of over
twenty books, including the New York Times best-seller, All the Presidents’
Children: Triumph and Tragedy in the Lives of the First Families. ... George Herbert
Walker Bush (born June 12, 1924) was the 41st President of the United States of America
(1989–1993). ...

Amway cofounder late, Jay Van Andel (in 1980) and later his son Steve Van Andel (in
2001) were elected by the board of directors of the United States Chamber of Commerce
as chairman of that organization. Jay Van Andel, (1924-2004) American businessman
best-known as the co-founder of the Amway Corporation, was born in Grand Rapids,
Michigan, June 3, 1924. ... The U.S. Chamber of Commerce is the worlds largest not-for-
profit business federation, representing 3,000,000 businesses 2,800 state and local
chambers 830 business associations They are staffed with policy specialists, lobbyists and
lawyers. ...

In May of 2005, former Amway President Dick DeVos, one of the wealthiest and largest
charitable givers in Michigan, announced that he would run against Governor Jennifer
Granholm in Michigan's 2006 gubernatorial election. Dick DeVos at a campaign stop in
Midland, Mich. ... Jennifer Mulhern Granholm (born February 5, 1959) is the current
Governor of the U.S. state of Michigan. ...

Legal rulings
In the 1979 In re. Amway Corp. (93 F.T.C. 618) ruling [7], the Federal Trade
Commission found that Amway does not qualify as an illegal pyramid scheme since
the main aim of the enterprise is the sale of product and money is paid only for business
volume, personal and group. It did, however, order Amway to change several business
practices and prohibited the company from misrepresenting the amount of profit, earnings
or sales its distributors are likely to achieve. 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.
[8] In re. ... FTC headquarters, Washington, D.C. The Federal Trade Commission (or
FTC) is an independent agency of the United States government, established in 1914 by
the Federal Trade Commission Act. ...

In 1983, Amway, headed by Richard DeVos, pled guilty to tax evasion and customs fraud
in Canada, resulting in a fine of $25 million CAD, the largest fine ever imposed in that
country. Richard DeVos, Sr. ... This article contrasts tax evasion, tax avoidance, tax
resistance and tax mitigation. ... A customs duty is a tariff or tax on the import or export
of goods. ...

Other violations
In 2005, Amway/Quixtar orchestrated an attempt to drown out sites reporting deceptive
practices and negative opinions. The "Web Initiative" was flagged as Google bombing, a
violation of Google's Quality Guidelines.