Meeting global responsibilities by caring for communities An Amway case study
Page 1: Direct selling and supply chain
A supply chain contains a set of links that bring finished products to end consumers. As a direct selling company, selling consumable products directly to consumers and by-passing the traditional 'retail' or 'high street'. Amway has its own distinct chain, placing a strong emphasis on IBOs who are able to focus on individual customers and their needs.
Amway manufactures the majority of its own brand products at their manufacturing plant in Ada, Michican. It then distributes these directly to the IBOs through a centralised warehouse in Venlo, Netherlands. Having signed a contract to work within Amway's Rules of Conduct and Code of Ethics, IBOs are trusted to operate flexibly within a 'self regulatory' environment. They develop direct supply channels and sell products to friends and customers that they know or meet.
Amway's supply chain is different from a more conventional supply chain that normally sells goods to final consumers through retail outlets. Amway's way of working depends on building lasting connections with the end consumer. Feedback provided by consumers and IBOs helps to shape future changes in products and the service provided.
As a global company, Amway has built up a strong regional structure around regional affiliates such as Amway UK and the Republic of Ireland. Operating through the regional structure, affiliates are responsible for:
forecasting (ensuring stocks are sufficient to meet demand)
efficient distribution: ensuring products reach IBOs on time and in top condition
product promotion and IBO support e.g. supplying brochures to IBOs.
Getting the image right is vital in a business that relies on building relationships with individuals and the wider community. IBOs often sell directly to friends and it is essential to provide high quality, value for money products with a 100% satisfaction guarantee.
Amway spends time, money and effort on creating an appropriate design and appearance for Amway products. It also develops campaigns that support the business and social aims of the company.
Amway | Meeting global responsibilities by caring for communities