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.
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