Page 1: Introduction
Founded in Ada, Michigan in 1959, Amway has become one of the largest 'Direct Selling' companies in the world with nearly three million Independent Distributors.
Direct selling involves dealing with customers 'Face-to-face' so that personal attention can be given to each of their requirements. Direct selling differs from traditional retailing as it often involves selling to consumers on a one-to-one basis, usually in the comfort of their own homes.
The industry has grown rapidly over recent years and is currently estimated to be worth £40 billion a year world wide. This case study examines this growth which has helped Amway to become one of the industry's market-leaders influenced by changing lifestyles, demographics and economic recession.
Direct selling for Amway is undertaken by its own independent distributors. Their own income is based on the goods they sell, bonuses paid by Amway and the volume of sales generated through their own distributor network. These distributors sell to people they know or meet. Amway distributors operate as their own independent businesses.
Amway is a long-standing member of the Direct Selling Association (DSA) in the UK and Republic of Ireland. The DSA regulates the industry by providing a Code of Conduct endorsed by the Office of Fair Trading (OFT).
Amway has developed into a global corporation manufacturing over 450 products and employing more than 12,000 people in over 80 countries and territories around the world.
To supply a global base of customers, Amway manufactures products ranging from household cleaners to cosmetics, food supplements to housewares. It also markets products on behalf of other leading manufacturers, such as Kenwood, Aiwa and Philips.