Whatever Happened to Amway?

22 October 2010

It wasn't long ago that Amway was one of the bigger names around, with nearly everyone at least knowing of the company's name even if they didn't know exactly what they were about. Well, if you haven't heard the name in a while, that's probably due to the fact Amway now goes primarily by Quixtar one of three sister companies launched under Alticor.

Amway is the largest direct-selling company in the world by far. The reason for their immense popularity in this generation is that they use network marketing to sell a wide range of products, including: health and beauty, home care, electronics, jewelry, water/air purifiers, insurance, dietary supplements, and much more.

Forbes ranks Amway as one of the worlds largest and most successful companies. They pull in around 8.2 billion USD annually, setting Amway leaps and bounds above other similar network-marketing companies.

If you're wondering what happened to them, the simple and quick answer is absolutely nothing. Amway is still large and in charge, raking in billions of dollars and helping start-up entrepreneurs with the right skills carve out their own place in the business world.

Amway was founded by Jay Van Andel and Richard DeVos. The two got involved with selling Nutrilite products in 1949 and, after success, formed the Ja-Ri Corporation. This business was established solely to push Nutrilite products, but eventually started developing the groundwork for what we know of today as multi-level marketing.

In 1959, DeVos and Van Andel formed The American Way Association and Friska concentrated cleaner was their first major product. A year later, they purchased a 50% stake in Atco Manufacturing and changed the company's name to Amway. By 1964, Amway had a sales, services and manufacturing corporation that would all merge to become the Amway Corp.

It didn't take long for the large company to expand overseas. They set up shop in Australia in 1971, and then moved to Europe in 1973 followed by a trip east to Asia and Japan in the late 1970s. By 1985, Amway also had locations in Africa and Latin America. They become a huge international company.

However, this is just the story of their success. The reason you may have heard about Amway as it relates to multi-level marketing is through the pyramid scheme controversy surrounding the conglomerate.

The first accusations that Amway was a pyramid scheme came long before MLM programs hit the internet 1979. Many had accused Amway of being a pyramid scheme, and they found themselves in court with the Federal Trade Commission. However, the FTC ruled that, since Amway's compensation system was based on sales and not recruitment, it didn't qualify as a pyramid.

Most recently, Amway got in trouble in India. In 2006, authorities shut down all Amway offices due to a complaint that Amway was operating a pyramid scheme. Amway is attempting to challenge their ban in court to date, but so far its being upheld in India.

Elsewhere, all allegations of Amway conducting pyramid schemes have been proven false. In 1997 a Belgian court dismissed claims of wrongdoing on Amway's part, and the same happened in the UK in 2008.