Combining an offline and online business
An Amway case study

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Page 2: Amway

Founded in the USA in 1959, Amway is a global business employing more than 6,000 people worldwide. Amway is not just a consumer goods business, it is also one of the world's largest direct sales companies with over 3.3 million Independent Business Owners in more than 80 countries and territories in Asia, Africa, Europe and the Americas.

The critical relationship between Amway and the seller or Independent Business Owner is at the heart of Amway's approach to direct selling. The main benefit of this form of selling is that it allows the Independent Business Owner to focus upon individual customers and their needs, with the Independent Business Owner sourcing the consumer rather than the consumer having to visit a shop.

Because it focuses on direct selling, Amway is different from more traditional distribution channels. Its Independent Business Owners own their own business, with the flexibility to deal directly with their own clients and to build up personal relationships.

These Independent Business Owners also have the ability to deliver Amway's products to their customers' homes. Independent Business Owners sell to people they know or meet. The personal contact and care they provide is an important element in direct selling. They are also self-employed and can introduce others to the business to form their own sales group of Independent Business Owners.

The channel of distribution describes the stages of ownership that take place as a product moves from a manufacturer to a consumer. The increasing use of the Internet by consumers has created a real potential for developing different types of business models and for new approaches to reaching users directly and quickly in their homes.

Many businesses were quick to respond to the potential uses of the Internet. Some were too quick, and only a few of the dot.coms have been successful in selling directly over the Internet to consumers.

For the greater part, Amway's customers are not final consumers. Rather they are the Independent Business Owners with whom Amway works. Most of these Independent Business Owners operate from home and many of them have other careers and want a flexible working relationship with Amway. They want to work at a time that is most convenient for them. This can be at any hour of the day or night.

With high levels of Internet use within the UK and Europe, market research showed that Independent Business Owners were Internet-ready, and that the time was right for Amway to develop e-commerce opportunities that would offer the 24-hour service its customers were wanting.

Amway had already developed e-commerce opportunities with its Independent Business Owners in the USA. This experience was there to be drawn on; within a large organisation, it is important to share knowledge so that best practice can be followed from successful situations.

Amway | Combining an offline and online business