Distribution Systems

Traditional/Conventional Distribution

One might be confused between Traditional, Intellectual and Technology based distribution. 

Well Technology based distribution is a conventional distribution system with the combination of technology to it, i.e. doing a conventional distribution with the aid of internet, e-commerce etc. While intellectual distribution is educating a consumer about a product or service of which the consumer has never felt any need in his/her life and servicing that consumer on a one to one basis using technology. 

One fine analogy (of intellectual distribution) is the use/popularity of mobile phones, which has become a basic item in a man’s day today life.

Intellectual distribution is the latest trend in distribution system, and is closely related to direct selling. In the future most of the money will be related to this. The advantages of this system are as follows.

•         Directly from the Manufacturer

•         Using Technology: e-Commerce

•         Consumer gets a Chance to own the Business

•         No Intermediates; hence benefits go to Consumer turned Business Owner

•         Anyone can start the Business at a negligible investment

•         Warehouses, show rooms, offices all operated by the Company; hence no overheads

•         Quality guaranteed- 100% Product Refund Policy

•         No Risk – 100% Investment Refund Policy

•         Unlimited Income – Proportionate to the Efforts.

•         Creating a legitimate safe and secure income.

Traditional Marketing and Distribution

To understand more about direct selling and how it works, one should firstly know how a conventional distribution works.

In a conventional distribution system there will be minimum of 3 levels between the manufacturer and consumer. No consumer can buy a product from a manufacturer. So it’s mandatory for some middle men to fill the gap between a consumer and a manufacturer.

The usual levels in a conventional distribution system are as given below:

1.     Manufacturer
2.     C&F Agents (Carrying and Forwarding)
3.     Wholesaler
4.     Retailer
5.    Customer

In some cases there maybe more than 3 levels (such as advertisers, stockiest etc) between Manufacturer and Customer. Most of the money for the product paid by the customer is gone to these levels before reaching the manufacturer (and vice-versa). Around 60% of the price of the product is gone to the C&F, Wholesaler and Retailer. (A product costing 40 Rupees to manufacture will be sold at the retail shops for 100+ rupees)

Additional to increase in price of the product, there is another risk of getting the customer cheated if the retailer is selling a duplicate product (substandard or old product) knowingly or unknowingly, because usually a common customer cannot recognize quickly whether the product is original or duplicate. The blame for the duplicate products cannot be given only to the retailer, since he is getting the product from the wholesaler and so on.

So the culprit for the duplication/adultery obviously should be C&F, wholesaler, retailer or even a combination. The manufacturers name can also get defamed because of the duplicate products. So there is always a little risk to the customer, manufacturer and others when they follow the same old distribution.

Though most of the people doesn’t know about this, and even if they know it (nobody cares), and they know that nothing can be done, because that is how the system works in a conventional distribution.

Smarter Distribution

Though traditional distribution cannot be removed totally, in some businesses the rules and system of the traditional system is necessary. But in many areas we can introduce and some companies have already introduced a smarter distribution system, named as direct selling system.

In this type of distribution and there are no middlemen between the customer and the manufacturer. The customer can buy the product directly from the manufacturer. Obviously in such a type of distribution the money that is given usually to the middlemen are saved which results in  the reduction in the  cost of the product, an opportunity for the customer to distribute/promote/advertise the product and generate money from it etc.

Suppose a person buys toothpaste from a retailer, he uses the product. He gets no benefits or recognition from the manufacturer of the product because he bought that particular brand of toothpaste (unless he is lucky enough to win a scratch and win).

This example will definitely seem to be ridiculous, absurd and funny for the people who don’t know about any other type of distribution other than the traditional distribution.

Also it is a matter of fact that one buys a product only to consume the value of that product, no consumer expects the manufacturer to help the customer or say a “Thank You” to the customer, and it’s ridiculous even if such a thing happens.

But in the current era, it is time to change the type of thinking of the customers mainly because of the advent of direct selling in much type of products. To know more about direct selling, its markets etc click here.

Direct-to-consumer Distribution

Unlike the traditional distribution, in direct-to-consumer distribution, there are only two levels.

1. Manufacturer 
2. Customer

Since there are no middle men in this type of distribution, the consumer can take advantage of this in many ways, such as, the:

•   Customer gets the opportunity to promote the product and earn extra income.
•   Customer can get a Retail Margin upto  20%
•   Customer can get incentives upto 21%
•   Customer can get Bonuses and other benefits.

Every customer has an equal opportunity to earn an extra income (which is usually gone to the middle men, advertising, brand endorsement fee etc in traditional distribution). That is a normal consumer gets an opportunity to become both the company business owner and a consumer gaining upto 60% benefits at the same time. It is infact a great opportunity.

Revolutions

There has been a number of revolutions before,and there will many more to come in the future,but the contemporaries just don't notice such revolutions happening around them.


Some of the Financial Revolutions which occurred  (as told by Paul Zan Pilzer in his book Wellness Revolution) are given below:






 1960s to 1980s – Automobile Revolution.
People who were part of Automobile Revolution mad a lot of fortune and this was the period when a lot of Millionaires were created.

1980s to 2010s – Computers & Internet Revolution.
People who were part of Computer and Internet Revolution (Information Technology) mad a lot of fortune and this was/is the period when a lot Billionaires were/will be created.

2010s and beyond – Wellness Revolution.
This is the current era and a lot of people are making fortunes from this industry, though the fact is that only a few people knows about such a revolution. The wellness revolution is only at its beginning stage. This will be the era when "Trillionaires" will be created.

Till 2000s the world was in the Industrial Age and the Manufacturers made the Money by traditional Distribution. And this was the period when the maximum amount of employees was made.

In the current era, we are now in the Technology Age /Information Age (e-commerce, internet etc) and it’s the distributors who are making and will be making the money in this age. The traditional distribution system will eventually expire and the new type of distribution called as Technology based Distribution will replace it.Technology based Distribution is followed by most of the big companies nowadays and is spreading rapidly.

Paul Zan Pilzer on Information Technology Age
“In this Information age, where Technology has made everything easy, it is not the one who finds better ways to manufacture the products, but it is the one who finds out better ways to distribute them that makes money”
Though Technology based Distribution is just not enough to market the products in the current competition,people are searching for new ways to distribute their products and now companies have come out with a new type of distribution known as Intellectual distribution.

Paul Zan Pilzer defined Intellectual Distribution as ““Educating a consumer about a product or service of which the consumer has never felt any need in his/her life and servicing that consumer on a one to one basis using technology”

Other Significant Trends

• •e- Commerce
• •Employment to Entrepreneurship (Employment was the product of Industrial age and Entrepreneurship is the product of Information Age)
• •Indian economy is one of the fastest growing economies in the world
• •Indians have a high level of disposable income

Principle of Leveraging

Archimedes once said, “Give me a lever long enough and I could move the world.”

The concept of Leverage is important when it comes to money, business and wealth. The principle of leverage is a powerful tool we can use to get ahead financially in life.

In technical view or in primary school science,leverage is to do with seesaws, fulcrums and pivots.A lever allows you to use less force to lift or move objects and this concept is applied in a lot of the everyday products we use such as scissors,doors etc

With respect to money, we can likewise use the principle of leverage to accelerate our financial ambitions. When studied properly and intelligently applied, leveraging will allow us to earn more with less work comparatively.

We should learn to invest in ourselves. Read books, attend seminars, join communities and expand knowledg in whatever way possiblee. The more we practice or read etc,the more we get skilled and talented

When it comes to financial leverage.it means using other people’s money (and work) and making it work for us. The value, utility and purpose of this type of leverage is probably the fountainhead of wealth.

When we simply rely on our own capability to save money alone, then it will take some time before we can invest and accumulate wealth. But by utilizing our resources and assets to acquire good debt (an investment debt that creates value), then we can expect exponential growth on our money.

Resource leveraging,it refer to it as the power of collaboration. In businesses,especially for beginner entrepreneurs,there is a huge possibility that they fall into the trap of self-employment. It’s common to see intelligent, eager and optimistic persons who started a business which eventually closed after less than a year just because the person got tired of running it on his own.

Place controls in your business and learn to employ other people to work for you. Investigate partnerships for your business and always consider using the aid of other individuals and experts to help you plan your actions and accomplish your tasks.

The best part is that applying the concept of leverage is very simple in Amway business compared with other businesses,mainly due to the reason that in other businesses one need to find persons who are trustworthy to be made as a partner since financial risks are involved,while in Amway,the opportunities are equal and all the ABOs have the same responsibilities.

Entrepreneurship

Entrepreneurship has become an obsession throughout the World nowadays.More & more people want to be in control of their own financial destiny.

There are only two Achievement Factors for MOST of the businesses: TIME and MONEY
Ways of Generating Income depends upon Ways of Thinking.





Robert Toru Kiyosaki,an American investor, businessman, self-help author and motivational speaker described a quadrant known as the cashflow quadrant.
To which quadrant do you belong to ?

1.Employees
Advantages:
•No tension regarding profit or loss etc of the company.
•Gets payment/income in time.
•Safe job if employed in a MNC. Provided there is no target or competition.
Disadvantages:
Always exists a minor tension whether the job will be available always.
Lacks leadership qualities.
Have to show up at a particular time every day to make money.
Starts over every day at Rs 0.00.
Trade hours for his income and someone else own the business.

2.Self-Employed
Advantages:
•Time is flexible but exists a tension
•Always a fluctuation, income depends upon the market of the products sold or reputation of the person.
Disadvantages:
Have to show up at a particular time (though flexible) to make money.
Start over every day at Rs.0.00.
You own the job & trade more hours for Rs.

3.Entrepreneurs(or Business Owners)
Advantages:
•Flexible timings
•A Entrepreneur is a leader
•Your money works for you, rather than you working for your money.
Disadvantages:
No disadvantage. (Any challenge is converted into an opportunity.)

4.Investors
Advantages
•Out of the above 3, the best quadrant.
Disadvantage:
An investor is usually a big entrepreneur, so No disadvantages. (Any challenge is converted into an opportunity.)
Need up-front capital.(a lot of money to invest)


So the Left Quadrant (Employees and the Self-Employed) are always having disadvantages more than their advantages compared with the Right Quadrant (Entrepreneurs and Investors)

The Bad news for the Left Quadrant people is that they are the 99% of the world population but they only get 1% of the income, while the right quadrant people are only 1% of the world population and they get the remaining 99% of the income. So this is the reason that the entrepreneurs are always wealthy and having a great lifestyle while the employees are never satisfied with what they get. This is one of the sad secrets.

The Good news for the Left Quadrant people is that they can get into the right quadrant by just applying a secret, a secret that is applied by the right quadrant people, which is called as “the principle of leveraging”.If you could participate in a similar business model using the principle of leveraging, then you can get into the right quadrant. All one has to do is “To-do the work to build a business system (today), in order to reap the benefits (tomorrow)!

Indian Direct Selling Association (IDSA)

There is no minimum age, qualification or any other bar to start this business. The only pre-requisite is to have passion to sell.
People who want to take up an alternative to traditional employment or to earn extra flexible income, based on their work performance, join DS.
People whose circumstances do not allow for regular employment can take up direct selling, in many cases DS opportunities develop into a fulfilling Career.

IDSA is a self-regulatory and promising body for the DS industry in India. It is the Indian counterpart of a world body, World Federation of Direct Selling Associations (WFDSA), based in the USA, WFDSA regulates and strengthens DS in over 58 countries.IDSA scrutinizes direct selling companies based on their business practices and policies.
The DSA stamp today is recognized as a doorway to success. It is also considered a Field of security and safety for you-who may be a direct seller or a consumer It gives you an assurance that you are dealing with a company that take care of your interests


IDSA is a guiding light for direct selling industry and formulate dos and don’ts for direct sellers, customers and companies.IDSA has appointed an ombudsman to settle grievances and complaints. It works with consumer groups and decision makers to promote and create awareness about legitimate direct selling.IDSA undertake research and surveys to highlight the trends and bring out any issues related to the industry. Through the media, IDSA educate the common man about the direct selling.

Objectives of IDSA:
To protect the character and state of direct selling
To protect the customers and the direct sellers by adopting the best practices and code of ethics as described by WFDSA.
To protect the direct selling industry.

Companies in direct selling
There are now a lot of companies (fake ones too) in direct marketing these days.One need to acquire enough knowldge to identify which one is genuine and which is not.

A few names in legitimate direct selling which are approved by IDSA in India are:
Amway India Enterprise
Tupperware
Shriram DTH
Altos Enterprises
Oriflame India
Herbalife International India
Max New York Life
Hindustan Unilever Network
There are still many more companies which have established and there are a lot of companies which are going to start their business in India.

Direct Selling Industry

Amway was the first company to start direct selling in the world.
To know what Amway business is all about and how you can develop Amway business, it’s necessary to understand the basics of direct selling and multilevel marketing.
Across the globe, the range of products sold through direct selling (DS) is growing manifold. And the list is multiplying even as you read this information.DS in its different forms is followed in 165 countries, with a global turnover of Rs.4343bn and 62 million sales people as of 2010. In India DS is still in a nascent stage, with turnover of Rs.311Bn and 1.5million sales people involved in it.

Country DS___________ Turnover(US$)
USA_________________30.8 billion
Brazil_________________9.1 billion
Korea_________________9 billion
India__________________691 million

Direct Selling is a distribution channel and a business opportunity in which products are sold to the customers face-to-face. The sale is often combined with demonstration and testimonials, at a location and a time convenient to the customer, away from fixed retail shops.

Popularity of Direct Selling

Flexible work timings
Extra Income (Passive)
Rewards in direct proportionate to effort
Time for family and friends
Personal and professional growth
Customers get personal service and high quality products
Independence

Kinds of products sold by DS
World class products in categories such as:

Homecare
Personal care
Cosmetics
Kitchenware
Gift items
Jewellery
Garments
Nutrition and Health
Food items

…are today being offered through DS in India. This list is not exhaustive.

The Wellness Revolution

Believe it or Not! Wellness revolution is the next big revolution.
This revolution goes in accordance with the legendary proverb “prevention is better than cure!”
Few years ago Nobel Prize Nominee Paul Zane Pilzer, a world-renowned economist, a highly successful social entrepreneur, an adjunct professor, author of several top books and dozens of scholarly publications,told about an emerging $200 billion industry he called "wellness" and the next big revolution “wellness revolution” after the “computer revolution”.

Today, that industry has grown to $500 billion, and it's just getting started, offering even greater entrepreneurial opportunities.

The Wellness Revolution was the "shot heard round the world" for the wellness industry. It defined wellness as an industry—linking tens of thousands of disparate service and product suppliers with a single cause. It showed scientists, fitness providers, businesspeople, food manufacturers, doctors, and others focused on disease prevention and anti-aging that they were part of a worldwide revolution

Wellness Revolution includes more guidance and business advice for individual wellness entrepreneurs, health product distributors, physicians, and other wellness professionals. The Wellness Revolution features new action items in every chapter and covers major new trends, particularly the phenomenon of "sickness/illness industry" food companies such as McDonald's and Wal-Mart making huge investments in fresh and organic foods.

Wellness Revolution shows that even though millions of people have embraced wellness, the need for wellness has actually expanded due to declining health trends, particularly the rising cardio problems and obesity rate.

Medical costs now exceed profits for most large employers, and corporations are beginning to recognize that wellness and disease prevention are the only viable solutions to rising health-care costs that threaten their very existence.

Wellness Revolution and Products & services aimed at are:

Preventing diseases to happen
Providing the general well-being
Reversing the process of diseases
Anti-aging
Protecting environment

There’s still time to get in on the ground floor to associate and make fortunes in the wellness industry. It is predicted that the wellness industry will be the first type of industry to go beyond trillion dollars. And it is going to happen in the near future and is going to produce trillionaires around the globe.

Health and Dietary Supplements

Every one of us requires health supplements so that we can get proper nutrients and start leading a healthy life. Due to this reason a lot of health experts have created many health products that are fortified with essential nutrients. These products or supplements have been created by keeping in view the requirements of people and how they can be met. You will be able to live a healthy life long after you start taking them in your daily diet. Along with the supplements; you must also visit health care provider regularly. This will help you keep track of important information about your body and your health. The doctor will be able to offer you the best medicines and nutritional supplements based on your medical condition.
But one should always remember when purchasing a supplement that the supplement is made strictly organically (from plants) and never inorganic (from chemicals). There is a lot of vitamin and mineral supplements in the market nowadays but most of them are made inorganically.

Nutrilite is the oldest, biggest, most researched supplement company in the world with over 250 health products globally scientifically proven to positively affect our DNA.While it took 67 years of solid and steady growth to reach $1 Billion, in the last 5 years, sales have almost tripled to reach $3 Billion!

Nutrilite was started in the year 1934 by Carl Rehnborg, who created the first nutrition product/supplement in the world and became the pioneer in the history of nutrition.The control of Nutrilite was later bought by Amway in the year 1972.



Among the products, one of the best sellers for Amway is the Nutrilite brand. Nutrilite is a nutraceautical supplement and this brand contributes around 50% of Amway's turnover. The brand virtually faces no competition so far. The Indian nutraceauticals market is estimated to be around Rs 1500 crores and is rapidly growing. Many Indian companies are eying this segment and have serious plans to enter this segment.

Nutrition

To live one must eat. But, we not only eat to live, what we eat also affects our ability to keep healthy, do work, to be happy and to live well. Knowledge of what to eat and in what quantities is a prerequisite to the healthy and happy life.
Nutrition is the science that deals with all the various factors of which food is composed and the way in which proper nourishment is brought about. The average nutritional requirements of groups of people are fixed and depend on such measurable characteristics such as age, sex, height, weight, degree of activity and rate of growth.

Food is anything solid or liquid that has a chemical composition which enables it, when swallowed to do one or more of the following
1.Provide the body with the material from which it can produce heat, or any form of energy.
2.Provide material to allow growth, maintenance, repair or reproduction to proceed.
3.Supply substances, which normally regulate the production of energy or the process of growth, repair or reproduction.

Good nutrition requires a satisfactory diet, which is capable of supporting the individual consuming it, in a state of good health by providing the desired nutrients in required amounts. It must provide the right amount of fuel to execute normal physical activity. If the total amount of nutrients provided in the diet is insufficient, a state of under nutrition will develop.

The council on Food and Nutrition of the American Medical Association defines nutrition as “The science of foods, the nutrients and the substances therein, their action, interaction and balance in relation to health and diseases. Nutrition science is the area of knowledge regarding the role of food in the maintenance of good health. Thus nutrition is the study of food at work in our body.

Health is defined by the World Health Organization of the United Nations as the “State of complete physical, mental and social well- being and not merely the absence of disease and infirmity (or ill- health/illness)”

Nutrition is one key to developing and maintaining a state of health that is optimal for you. In addition, a poor diet coupled with a sedentary lifestyle is known to be risk factors for life- threatening chronic diseases and death: Heart disease, Stroke, Hypertension, Diabetes and some forms of Cancer. Together these diseases account for two- thirds of all deaths in the United States. The major health problems in the United States are largely caused by excessive energy intake and not enough physical activity.

Most of the population in the urban areas all over the world faces the threat of malnutrition. With the trend of eating quick, tasty and junk food, the possibility of getting proper nutrition is diminishing. No junk or deep fried food contains nutrition. Nutrition in otherwise can be synonymous with a balanced diet, which means consuming enough amount of carbohydrates, proteins, vitamins, minerals and clean water. In the day-to-day lives people are consuming more fats and carbohydrates than required and less proteins, vitamins and minerals, this type of eating habit combined with sedentary lifestyle will obviously lead to cardiovascular problems, obesity and other degenerative diseases.

Even though only a very few amount of Proteins, vitamins and minerals are required by the human body, it’s an irony that we don’t receive the required daily.

It is also shocking to hear that even if we would like to consume all the essential nutrients daily, there is no provision to get them from food, forexample, in order to consume the actual per day requirement of vitamin C, we should eat at least 10-12 oranges per day, which is impractical.

A broader outlook at disorders will prove that, almost all the new types of disorders are all caused due to the deficiency of one or the other type of nutrient.
Cancer, Cardiac problems,Alzheimer’s, Parkinson’s disorder etc. are all caused due to the deficiency of nutrients in our body. In the old days when people used to get sick because of a virus or bacteria, it could be cured by providing the appropriate antibiotic or medicine, the reasons for diseases like Malaria; Cholera etc are due to unhygienic conditions and other external sources such as microorganisms.

But nowadays disorders like diabetes, hypertension, cancer etc are difficult to cure mainly because of the reason that the factor causing such illness is internal, i.e. because of the deficiency of proper nutrients, pollutedfood, fast lifestyle,oxidation etc

Since getting proper nutrition is difficult or rather impossible only from food, it is highly recommended that we intake such nutrients from supplementation. With adequate intake of supplements we can prevent such disorders and also upto a stage cure some chronic degenerative disorders.

Products from Amway

There are 5 categories of products in India.

1. Personal Care
2. Home Care
3. Cosmetics /Beauty Care
4. Nutrition and Wellness
5. Life Insurance

1.Personal Care
Some of the popular products under personal care are:

G&H Lotion
Persona Toothbrush
Satinique Hair Masque
G&H Body Shampoo
Persona Talc
Nature Shower
Hand Soap
Persona Bar Soap
Glister Toothpaste
Dynamite Shaving Cream
Glister Mouthwash
Dynamite Aftershave
Body Sponge
Satinique Shampoo

2.Home Care
Some of the popular products under home care are:

Dish Drops
Leather&Vinyl Cleaner
See Spray
Pursue Disinfectant
Zoom
APSA-80
SA8
L.O.C.
Car Wash
Silicon Gaze

3.Beauty Care
Some of the popular products under Cosmetics are:

Under the Brand of Artistry:

Replenishing Eye Cream
Pure White Essence
Body Definer Gel
Skin Refinishing Lotion
Moisture Vitalizing Cleaner
Creamy Massage
Time Defiance Day Cream
Moisture Refreshing Toner
Intensive Serum
Time Defiance Day Lotion
Clarifying Cleanser
Alpha Hydroxy Serum Plus
Time Defiance Night Cream
Foundation
Time Defiance Night Lotion
Loose Powder

Under the Brand of Attitude:

Lipstick
Moisturizer
Nail Enamel
Sunscreen Lotion
Eye Liner
Hand&Body Cream
Face Wash
Foot Cream
Cleanser
Face Masque
Toner

4.Nutrition and Wellness
Some of the popular products under Nutrilite

Glucosamine HCL
Iron Folic
Bio-C
Bone Health
Siberian Ginseng
Kids Drink
Salmon Omega
Tripleguard Echinacea
Garlic Heartcare
Daily
Parslenium E
Positrim
Kids Chewable
Cal-Mag D
Concentrated Fruits and Vegetables
Protein Powder
Natural B

5.AmSure Life Insurance

AmSure is an IRDA approved insurance product which is 50-50 joint venture between Hollard Insurance from South Africa & Amway India Enterprises, AmSure Insurance Agency Ltd. is functional as a corporate agent of Max New York Life Insurance Co. Limited. Presently they are responsible for distributing innovative Max New York Life products.

Max New York Life
Max New York Life is a joint venture between Max India Limited and New York Life of the United States. Max India is a multi-business Indian Corporation, while New York Life is a Fortune 500 company with a heritage of over 160 years as a life insurance specialist. Max New York Life has established itself as one of India's leading private life insurance companies and is the first life insurance company to obtain the ISO9001:2000 quality certification. Max New York Life is renowned for its efficient underwriting and claims process, along with superior customer service standards.

Hollard
Hollard is South Africa's largest independent insurance company, and the only company to offer both life and general insurance products across all classes in the South African market. Although firmly rooted in South Africa, the Group has expanded internationally to Australia, India etc.

AmSure central office is currently based in Noida, with regional representation in Mumbai, Bangalore, Chennai, Kolkata, and Delhi and in locations where Amway has branch infrastructure.

Legitimate Brand “Amway”

Amway is a 100% legit company!!

Why?

Stated below are a few facts to prove the legitimacy.


The Facts
1 Strong ethical values
2 Amway is the corporate leader in direct selling all over the world.
3 Amway has never withdrawn from any country.
4 100crores rupees deposited with the government of India as per the rules of IDSA
5 Amway list the top of IDSA companies.
6 Amway pays the taxes in advance to the government.
7 The products given by Amway are Economic,Efficient and Eco-friendly
8 Guaranteed products, i.e. money-back within 30 days of the purchase of the product provided only a maximum of 30% of the product is consumed by the customer.

There maybe people who still believe that Amway and MLMs are all scams.For such people, I can still data down the details to prove them wrong.

Always make sure that before joining any direct selling company/MLMs, that the company follows all the above rules (which are followed by Amway) at least, otherwise there is always a greater possibility that the customer is putting his money at jeopardy. Read how to identify legitimate direct selling company in the late part of this site.

Misconceptions about Amway

There are many ,including educated people (like lecturers in entrepreneurship, Nutrionists, Doctors, Engineers etc) in India and abroad who believe that and are absolutely convinced that multi-level marketing and Amway are all scams.
The Key Reasons for such type of misunderstandings are mainly due to:


(1)Lack of awareness about Multi Level Marketing companies

The first is essentially ignorance or misconceptions. MLM suffers greatly by the fact that virtually all illegal pyramid scams claim to be MLMs. When they inevitably fail or are closed down by the government, the meme that “MLM=FRAUD/SCAM/MONEYCHAIN” is reinforced. In reality this is poor logic. The very reason the scams are claiming to be MLMs is because MLMs are legal, legitimate businesses. Nevertheless, the effect on public perceptions is a daunting problem for the legitimate companies.

Associated with this are many misconceptions about how legitimate MLMs operates. Many folk believe thatABOs make money by recruiting others, and “smart” people know that means the model will inevitably “saturate” and you can’t make any money since there’s no longer anyone left to recruit. Of course, this isn’t MLM, it’s an illegal pyramid.

ABOs don’t make money by recruiting; they make money through sales volume. MLM isn’t really a business model – it’s a marketing strategy with the aim of increasing sales volume. Indeed, in general for any given level of sales, the more people you recruit to achieve it, the less you make on it. It’s no different to owning say a traditional retail store selling clothes. You could sell them all yourself, and keep the whole profit, or could employ some other sales staff. They’ll cost you money, but you hope that the increase in sales will offset the increase in costs.

These types of misconceptions abound, with people concerned about the legitimate problems inherent in illegal pyramids, and believing they exist in multi-level marketing.

(2)Uninterested, Unethical,Wicked and Crooked MLM Distributors

The second area that seems to influence people is their own personal experiences, or those of people they know, or, increasingly, experiences of others they read on the internet etc. The interesting thing is when you delve into the problems with those experiences, they very rarely have anything to do with Amway or multi-level marketing person, and they have to do with how some people operate their multi-level marketing businesses.

You can be scammed in any business. A car salesman can knowingly sell you an unsuccessful or a failed car. A doctor can overcharge you for a simple procedure. A teacher can “force” you to purchase a substandard text book they’d written and printed themselves.
Similarly an ABO”X” could sell you a product "Y” by telling you that it cures you for your illness, or you can be a millionaire with little work in little time. This example shows that the ABO “X” has scammed you. But such an incident doesn’t mean that Amway and all the other ABOs are scams and scammers. The problem with ABO”X” is that he either doesn’t know about the product and business plan or he is an unscrupulous person.

In each case you’ve been scammed, but the scam had nothing to do with the car industry, or the medical profession, or teaching, or Amway. It had to do with those individuals (and perhaps some of their associates) and the way they were behaving.
The multi-level marketing strategy, and Amway as its largest representative, is a brilliant way of doing business which allows anyone to start and own their own business, of which ever size they desire, with little financial risk, and without having to pursue it full-time. Just like in any other industry however, you can be scammed, and if you’re so inclined, you can scam people, but like any other industry, the scammers rarely last long.

Additional to the above reasons, MLM companies which also circulate negative rumors about their competitive companies and negative critics are also a cause for the issues faced by Amway and other MLMs.

Cost Factor & Amway

In a price sensitive country like India, the expensive tag of Amway products is the singular reason for the lack of popularity of its products in the rural areas, but in the urban areas the products are a gaining huge popularity.

Amway has understood that doing business in India will require a new business model. The company has started to take steps in the right direction. It had tried to rationalize prices and bring in new value products.

The company is also rationalizing the pricing strategies. For lower priced products, the commission payout will be less and hence the ABO will have to sell more volume to get higher commission. Life insurance product from Amway also has a lot of benefits.

Another significant change that the company made was rationalizing the entry cost for new ABOs. Earlier, a person had to shell out Rs 5000 to join the firm. The cost was to buy the Amway business kit which consists of various Amway products and brochures. The ABO can recover the money by selling these products. Now the company has introduced a starter pack for Rs 995 which does not have Amway products but brochures .Also there is a speculation nowadays that the company is going to make the joining free of cost provided they obey some conditions. This will be a big relief for the existing ABO since the higher joining costs turned away most of the potential ABOs.

But the fact is that those people who prefer quality do purchase the Amway products regularly irrespective of the price.

Amway Television Campaign

In general, there is a belief in people that direct selling companies don’t spend money for advertisements and promotions. Well…! That is not the truth.
Recently Amway launched its first corporate branding initiative in India. The brand came out with a TV campaign highlighting the customer-centric approach.
Amway uses the slogan “We are listening“. The idea revolves round the theme that Amway understands the Indian consumers and the products are derived from this understanding.
The purpose of the ad is to convey that the Company wants to build equity around the corporate brand which will enable the ABOs to tide over the initial customer resistance and to enhance the corporate image will also attract people to join Amway as independent business owners.

Common Issues faced by Amway

There are quite a few issues which Amway faced before and are now still facing in certain countries.

The products of Amway are excellent and superb in quality, hence quite expensive but are worth the pay. For example, the Glister toothpaste costs around Rs.100 which is almost double or even triple the rate of ordinary toothpaste. Glister is one of the best toothpaste in terms of quality and quantity if used accordingly but price maybe a dampener for the Indian community. Another example is the range of cosmetics under the brands Attitude and Artistery. Artistery is among the top 5 best cosmetic companies in the world. Artistery is targeted at the premium class and Attitude at the middleclass.

Direct marketing firms faces issues of reach and cost. Since the sales depend entirely on the independent distributors, the company paysthe distributors. The business plan of Amway is such that an ABO can make any amount of money without any limitations; the amount of money an ABO gets directly depends upon his efforts to sell the products

Amway India Enterprise Private Limited

The corporate office of Amway India is located in Noida,NCR.

Amway was established in India in 1995 and commenced operation in 1998 with 6 products. Currently the company has 80 products in 5 categories.All the Amway products are Economic, Efficient and Ecofriendly. Amway operates in the following 5 categoriesin India:
1) Personal Care
2) Home Care
3) Nutrition and Wellness
4) Cosmetics
5) Life Insurance

Amway India is now a 1100 crore company with its operation spanning across India. It has more than half a million independent distributors and 117 offices across the country.
Considering the nascent stage of Direct Marketing Industry in India, Amway India has been reasonably successful. According to Business Line, the direct marketing Industry in India is estimated to be Rs 3150 crore.

The success of Amway products is predominantly driven by the world class quality of the products. Amway India's products are mostly sourced from manufacturing units from India while a few products are imported from the United States. It has outsourcing contracts with 5 major units in India. The products are sourced after stern quality checks.

Amway is often used as an example of a direct marketing company. The company sells its products using direct distributors called Amway Business Owners (ABOs). The model works on a business networking model.
There are basically 3 tasks for a typical ABO:
1) Show/Sell the Product.
2) Show the Business Plan.
3) Service the Customer regularly.
The ABOs can build a team by recruiting a team of ABOs under him. The ABO earns commission on the products sold. Further, the ABO also gets commission for the sales done by other ABOs recruited by him. The payout is decided by the point system. The Amway business model also divides the ABOs into different categories based on the sales performance of the team. The payout varies with different levels.

WHAT IS AMWAY ?

What is Amway? Many people have heard about Amway,but most of the people just doesn't know what exactly Amway is. So I thought maybe I can help these people get to know what exactly Amway is,not entirely but to my maximum knowledge.

Amway Global
Amway is one of the global leaders in direct selling of FMCG. The name Amway is derived from the words "American Way”. Amway was established in 1959 by Jay Van Andel and Richard Devos. Amway now have a presence in over 90countries with more than 3.6 million business owners, more than750 world class products, and has more than $6.5 Billion turnover.

Amway is a 100 % direct marketing company. That means the consumers will not get any Amway products from shops/retail outlets etc. Products can be bought through Amway Business Owners (ABO). Hence the sales are driven by the efforts of ABOs. Since the company does not advertise its brands, the only communication channel is through ABOs who visits households and make presentations.