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.
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