Amway

Amway generally refers to an international multi-level marketing (MLM)

The System

Anyone can become an Amway IBO (formerly known as a Distributor); IBOs may purchase products from Amway at rates published as wholesale prices.

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Amway IBOs receive monthly payments based on the amount of sales, known as Business Volume (BV), their group generates per month; the group consists of all people sponsored by the IBO, and all people sponsored by those, and so on. This BV translates to a Points Value (PV) at some fixed ratio, which is then used in all calculations for the remuneration payments.

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Like in most MLM businesses a person wishing to join Amway is "sponsored" by an existing IBO. This involves the new IBO purchasing an "Amway Opportunity Kit" or "Business Pack" and completing the appropriate forms. The kit also contains literature and some starter product. IBOs must pay a yearly fee to remain in Amway, although they are not required to buy a minimum quota of product.

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Amway claims to have 3 million distributors worldwide, including 500,000 in the U.S. Japan represents a very fast-growing market with 1 million distributors. Recently, the Amway cluster received permission to establish a network in China and have done sales of over 2 Billion U.S. Dollar in 2004. (It should be noted that Amway cannot conduct Chinese operations as it typically does elsewhere due to a ban on direct sales).

Related Topics:
Japan - China

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Motivational organizations exist to offer free recruitment meeting for people who have not yet joined the Amway system. They also sell motivational seminars, tapes and literature to Amway IBOs.

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Amway's distributors are organised hierarchically, and the corporation employs a system of pin levels to reward successful distributors (so-called because attainees are awarded a stick pin to indicate their level.) Higher-level distributors act as mentors to newer distributors, organize regular meetings of their group and (contraversially) may derive most of their profit from the sale of motivational tools to them. "Crosslining," or associating with people from a different "leg" or distributor chain is generally discouraged.

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Pin Levels

Pin levels reflect the level an IBO has reached in the Amway busniess. As such they are an indication of both the size of an IBO's group and their income, and by extension the IBO's knowledge and expertise in the field. Top pin level IBOs may have groups numbering hundreds or thousands of people, and as such are in high demand. They also command respect and adulation from their group. High pin levels are named after precious metals or gems to convey a sense of the wealth that they are supposed to represent.

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The lowest pin levels reflect successively higher volumes of PV sold through the IBO's group, and are named after the percentage bonus that each level pays.

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The first significant pin level is that of Platinum (formerly known as a Direct.) The term Direct came from distributors beginning to get products sent to them directly from the corporation after attaining this level, as opposed to previously having bought them via their "sponsoring" distributor. (These days the "Direct" concept is defunct, as all IBOs order their product direct from Amway.) This level requires the IBO's group to be moving 7,500 PV of product per month, and the Amway recruitment plan customarily shows that such a group will have a total of 75 people; although in practice that number is often much larger. The income at the Platinum level, generally speaking, is (purportedly) about the same as the average full-time wage in the IBO's country of origin.

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The most significant pin level is that of Diamond. This level requires that six people the IBO has sponsored have themselves reached the Platinum level (or higher). The remuneration at Diamond is (generally) a "six-figure" passive annual income, and advertised to represent financial freedom for the IBO. Almost all IBOs aspire to this pin level because of this purported "freedom" aspect.

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(Note that it cannot merely be assumed that the income of a Diamond IBO is a simple 6x multiple of the income of a Platinum, since there are several other ranks between Direct and Diamond, and monetary bonuses are paid as a result of having attained these as well.)

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The highest level is Crown Ambassador. This level requires at least twenty sponsored Platinums in the IBO's group. Only a handful of people in the world have attained this pin level, and they are in constant demand for recruitment and motivational speaking engagements. The remuneration at the Crown Ambassador level runs into the millions annually.

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Other pin levels include Ruby (15,000 PV per month), Emerald (three Platinum legs), and Double- and Triple Diamond (nine and twelve Platinum legs respectively.)

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On top of the remuneration for PV moved through their group, an IBO may be entitled to additional monetory bonuses. These are paid for meeting growth targets, extrordinary recruitment numbers, and so forth; they can represent a significant portion of the IBO's income.

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"Crown Ambassador"

By way of their seniority most Crown Ambassadors sit on various Amway boards, deciding business policy which affect all IBOs worldwide. Most also run, or contribute heavily to, their own motivational organizations.

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Some Crown Ambassadors include Leonard and Esther Kim; Jim and Nancy Dornan; Tim Foley; Bill Britt; Jim and Sharon Janz; Charlie and Elsie Marsh; Bill and Joan Laing; Frank and Rita Delisle; Dan and Bunny Williams; Mitch and Deidre Sala; Dick and Sandee Marks; Bill and Joyce Schmidt; Chuck and Jean Strehli; Peter Lee & Choi Kit. Kaoru Nakajima of Japan, known as 'the master,' has achieved the mythical pin of "Double Crown Ambassador", meaning he has double the required 20 personal direct legs.

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Dexter Yager, considered a legend by some within the Amway organization, is probably the most famous American Crown Ambassador. He created a training system of functions, books of the month, and tapes that has been copied by Dornan and Britt, among others. He is one of the biggest landowners in Charlotte, North Carolina.

Related Topics:
Dexter Yager - Book - Tape - North Carolina

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