None. I have never seen them sold anywhere or been approached to buy any. This is strange because of the great market penetration I have read about. It is also strange because I did have some interactions with Amway, over the course of a few months. Lots of tapes, a few meetings -- no products shown or sold, not one.
And frankly IMO, and you'd probably agree, that's a dumb way to promote a business, isn't it? On the other hand there are many groups that run product demonstrations as a standard part of their initial presentation.
So who's buying them and why? I think the allegation is that distributors are buying them to gain points -- either for themselves or others. If this is so, then they feel, as you said above (and as you yourself have claimed), "value for money."
The "points" are only of significant "value", and incentive, if they're getting translated in to something worthwhile, ie cash. Statistics revealed in the TEAM vs Quixtar (Amway North America from 2001 to 2009) lawsuit revealed that the vast majority of people purchasing Amway products, are
not earning commissions. Yet they renew and continue to purchase products.
Having said that, there are groups (like TEAM) where they clearly were pushing people to purchase products because of the potential monetary incentive. They even developed a business building system to maximise the
number of people getting commissions through the volume rebate system. Of course, that also means
less income on average as it's spread over more people.
There's a pretty predictable problem if you simultaneously promote product purchasing because of potential financial incentives, while at the same time minimizing that financial incentive.
TEAM vs Quixtar also revealed that the TEAM organization had much higher member turnover than the Quixtar average, with fewer people renewing, and fewer people continuing to purchase products.
In any case, Amway/Quixtar kicked this group out because they believed how they were operating might be considered an illegal pyramid scheme - ie exactly what critics claim.
The mistake is to believe that is the normal mode of operation in Amway.
I'm trying to think of a parallel in the stuff I buy -- where my purchase is influenced not strictly by need, price or quality, but driven with an element of social/business interaction. The only thing I can think of is the stuff my wife buys from Pampered Chef. It is nice stuff, probably "premium." Honestly though, I don't think she would buy it if she wasn't sold by way of party and friends. After all, how much mental effort does one put in when buying measuring cups? We aren't professional chefs here, we just occasionally need to measure something.
There's infuences like this on all product purchases. I get points through other stores and suppliers as well. It has a small influence on where I shop. Not huge though.
If I had to make a claim, it would be that the amount of selling needed to get the Amway stuff out of inventory is way out of proportion to the profits available.
I'm not sure what you mean by this? It's really not that hard to sell Amway products, at full retail price. When I was active we had two major paths to this, one was small group seminars on health and nutrition (promoting Nutrilite obviously) where we'd first educate people on nutrition and then promote Nutrilite. The other was skin care/cosmetics sessions, normally in someone's home, where we'd educate people on skin care and then promote at let them try the Artistry range.
A couple of hours of "work" (including invitations) would on average result in several hundred dollars in profit. More importantly these customers would reorder the products regularly in the future, with very little work involved.
But in the MLM model, the act of having a salesperson tout your product is cheap. Much less so for Amway than, say WalMart and the stuff they sell.
The MLM model for a company is very cost effective. They pay very little in marketing costs unless the marketing is actually effective in generating sales.
Let's try something straight out. Suppose I had a retail location. If I were an Amway distributor, an IBO, could I put Amway products on the shelf with a price tag? Why or why not? (I'm in the US.)
It depends on the nature of the retail location. One of the basics of the Amway model, and which the company believes differentiates it from competitors, is "personal service" by people who (hopefully) know what they are talking about. So "professionals" in some areas are allowed to market Amway products through their businesses, for example Doctors and Nutrilite, or salons and Satinique, or beauty therapists and Artistry.
If you simply stick a product on a shelf with a price tag, and don't try to influence purchasing decisions through things like TV advertising, the only thing you're competing on is price. Amway is not trying to be the cheapest, so sticking it on the shelfs simply wouldn't work anyway!
The first MLM product (Nutrilite, later bought by Amway) operated on the basis that you needed trained salesman who could educate people about the product and it's features/benefits. When Amway started in the late 5s/60s they tried to find a product that everyone needed but didn't require the salespeople to be too knowledgeable, so they settled on organic soap concentrates that could be easily demonstrated by anyone.
That worked through the 70s, but coming in to the 80s the competitors in that category caught up a lot both in price and value/performance and Amway moved more into "home shopping", offering a wide variety of products with convenience being the major "hook".
As competitors moved in to this area, big box retailers took off, and later the internet, this model became less and less effective and Amway in the 00s moved focus back to health and beauty, areas of high margin where, just like with Nutrilite, any salespeople actually need to know something about the products to effectively sell.
Unfortunately in the US they didn't simultaneously work on providing product training to the field. So particular in the 90s and 00s you know have a lot of people who know little about the products trying to sell them. This means all you've got left to compete with is price, somewhere Amway (corporate) isn't trying to compete. The field reacts by dropping the retail markup and marketing the products at the base wholesale rate and instead trying to make money solely on volume rebates. You've now removed pretty much half your profit base, so people are making less money. Groups like TEAM come up with strategies to try and get more people to buy the products, and they do so by spreading the volume rebates even more thinly, so that even people not doing any work start getting them - and the "active" people are now making even less money.
Now,
some groups have kept product knowledge and training as part of their systems all along, and they're doing just fine, but over the past 2 decades groups like TEAM (and they weren't the only ones) are running around trying to convince people to buy stuff at discount prices and get other people to do the same. Few of them are making any money, most of them know nothing about the features/benefits of the products, and well, the rest is internet history.
So, apart from Amway's failure to actually train the field (and ignoring side issues of controlling those using it as a venue for proselytizing), the "model" itself was just find, and so were the products. People who knew what they were doing and did it had no problem selling the products or making money. The basic MLM model is and was fine, it's how people were trying to use it that caused a lot of the problems.
