For modern business organisations, developing goods or services is not enough. Goods must also be available in the right quantity and at the right location in order to reach the customer.
For the organisations themselves, distribution strategies should never be underrated. Developing an effective way of reaching customers may be the cornerstone upon which their successes are founded.
Take Reader’s Digest and the unique way in which it sells products to its customers. What about Vision Express and the revolutionary reforms it has prompted in the sale of glasses? One reason for their success is that they reach their customers in a better and more appropriate way than their competitors.
This case study focuses on Amway and the success it has achieved using the oldest form of distribution – direct selling.
Founded in Ada, Michigan in 1959, Amway has become one of the world’s largest ‘Direct Selling’ companies. The company’s first product L.O.C. was one of the earliest biodegradable cleaners and is still marketed by Amway.
Today, the company has developed into a global corporation selling more than 400 products and employing in excess of 13,000 people, in over 70 countries and territories around the world. It manufactures and markets products, which range from household cleaners, laundry products, toiletries, cosmetics and housewares to vitamins and food supplements.
Amway also markets products on behalf of other manufacturers, such as Talkland, Bosch, Black & Decker, Kenwood, Pierre Cardin, Aiwa and Philips.
The concept of direct selling is based on person-to-person relationships. The seller goes to the consumer rather than the consumer to a shop. In today’s fast changing society, where more people work and shopping patterns have altered, this type of shopping not only provides consumers with accessibility to a wide range of products but is also convenient.
An organisation involved in direct selling cannot sell without a sales force! At the heart of Amway’s approach to direct selling is the critical relationship between Amway and the seller or distributor. There are more than 2.5 million renewed independent Amway distributors worldwide, around 37,000 of whom are in the UK.
Each of these distributors is self-employed. Anyone over 18 can establish their own business as an Amway distributor, either on a part-time or full-time basis. Amway offers individuals the chance to set up their own businesses with little or no experience or capital investment. Working hours and flexibility can be adjusted to suit each individual.