Amway&endash;"The American Way?" Soap distributors? Global corporation? Trying to make sense of what Amway "is" has come to be a mini-passion of mine. I became interested in the Corporation when my parents were solicited by a young couple they had met here in town. They seemed very enthusiastic about this "great business opportunity" and genuinely committed to "the dream" which Amway is said to embody. That is, building up your own business to an extent to which you can be independent of traditional work constraints while also developing your material resources to a level of "economic freedom." This was all very well and all, and although my parents were curious in the beginning about what all this was about, they never really seriously considered entering into the ranks of the "Wide World of Amway." Both my parents have had very little experience (or indeed interest) in "business activities" so they turned down the repeated offers to join. Over the course of some months, however, this couple began to slowly "disappear," apparently avoiding contact with us due to our lack of "faith" in the business. While we remained good acquaintances, there was definitely a barrier beyond which the friendship did not pass, and in fact, receded from. This fascinated and disturbed me. Spurred on by this curious turn of events, I decided to dig around a little and try to figure out what this thing was all about. Little did I know that this research would reveal a complex and contradictory organization with its own particular "bent" on consumption. I decided to focus on this issue of consumption, while at the same time trying to deconstruct this interesting and elusive "anomaly."
Amway is a direct selling organization that produces and markets products using a Multilevel Marketing system (or MLM for short).1 Direct selling and MLMs both rely heavily on the use and development of entrepreneurial skills. This is particularly important as direct selling and MLMs circumvent more traditional methods used to prepare a given product for market. Whereas in a regular business the product goes through various steps and handlers before it can arrive at the retail store where it can be picked up by eager shoppers, direct selling and MLMs bring products directly to consumers. However, herein lies an important difference between the two techniques. While direct selling focuses primarily on selling a product, MLMs have added on their own distinguishing (and controversial) feature. That is they also are actively engaged in the practice of recruiting new people into the business. Smith explains:
Multilevel marketing is a form of direct selling in which manufacturers authorize independent contractors to sell their products directly to consumers, bypassing middlemen and retail stores. Using the garage or a spare bedroom as a warehouse and a home office as a business hub, a distributor makes a profit by buying wholesale from his or her company and selling to customers at retail prices.MLM is also a recruiting business. A distributor is permitted to sign up other individuals to become part of his company’s distribution force--and is paid a commission on the wholesale product purchases made by recruits. [Home Office Computing, Smith, Aug. 1992:56-]
Both methods then furnish consumers with new options in acquiring consumer items they desire. The products are often made available via catalogue; the advent of the Internet, has provided opportunities for companies to expand their retailing, marketing, and delivery methods. For both echelons of entrepreneurs, however, the contacts that they are able to have with family, friends, and or other networks available to them, are vital to the success of their business.
While techniques and products vary greatly, the skill with which they are able to convince their customers that they really need a product (and keep on buying it) is of course critical.2 Personal contact and relationships are emphasized. They in turn go hand in hand with the hope and/or dreams of economic freedom and security. Take the following narratives from some prominent members of the movement; their accounts are interesting yet informative as they speak to the ideologies and enthusiasm idealized and embodied by those on the "inside":
"Jerry Rubin: People’s Capitalist In the 1960s, Jerry Rubin was a notorious long-haired, bearded, anti-establishment protester, a member of the Chicago 7 who outraged middle America with his colorful conduct and his guerrilla-theater protest antics."Today, Jerry Rubin has traded his denims for a business suit....A self-described people’s capitalist, Rubin is now a confirmed free marketeer who believes in the value and virtue of profit, especially when it is part of the entrepreneurial way of life [Emphasis added]. He can still speak up a storm, though, appearing nationwide at MLM seminars and in the media.
"There is a worldwide yearning for freedom," Rubin says. ‘Network marketing is about freedom--financial freedom, time freedom, personal freedom--to do and be whatever you want to do and be.’....
He sells such Omnitrition products as WOW, a nutritional alternative to coffee, and First Course, and appetite satisfier. He claims to have 4,000 people in his down line.
"As to the future of MLM, Rubin has no doubts. ‘I predict that network marketing will create an explosion of home offices all across America. Every street will have a home-based MLM office. You just wait and see.’"[ibid.] (My emphasis)
[it is interesting to note that in 1997 "The Ninth Circuit concluded that ‘on its face, Omnitrition’s program appears to be a pyramid scheme.".... In the final analysis, the Ninth Circuit made it clear that multilevel marketing programs would have difficulty establishing that they are not pyramid schemes as a matter of law." [Academy of Marketing Science. Journal. Barkacs, Craig B. Spring 1997:176] (My emphasis)
"We anticipate change, respond swiftly to it, take action to get the job done, and gain from our experience." We encourage creativity and innovation."
"We are proud advocates of freedom and free enterprise. Human economic advancement is clearly proven to be best achieved in a free market economy." [From the Values section of Amway’s Home Page on the Internet--www.amway.com/amway/welcome/default.htm#THISIS]
"The Amway business recognizes, supports, and expands our freedom, which is both personal and economic. Thus it is our responsibility to ensure, protect, and sustain our freedom."
"Reward is integral to the Amway business as we help each other grow as people and as entrepreneurs." [From the Founder’s Fundamentals section of Amway's Home Page on the Internet--ibid.] (My emphasis)
In looking over the preceding passages it is quickly apparent the degree to which such narratives draw on many deep ideological and mythical undercurrents of the United States. The words "freedom" (personal, financial, time, etc.&endash;or "independence"), "innovation," and "enterprise" are consistently reiterated and expanded as the narratives progress. While the expression of this free market ideology varies from one MLM organization to another, it has proven to be attractive to large numbers of people. Such developments illustrate not only MLMs’ formidable force but also calls into question their motives and socio-economic impetus.
Drawing on deep religious metaphors and explicit spiritual references, these companies "sell hope as much as soap, motivating their grass-roots sales forces to labor not merely for remuneration of commissions but out of a conviction that theirs is a sanctifying, empowering activity," said Anson Schupe of the University of Texas and David G. Bromley of Virginia Commonwealth University.....Instead, the significant factor, "... is the power of these ideologies to motivate individual sales persons far beyond the scope of their actual remuneration or realistic prospects thereof."
"Root metaphors"--the most important of which are family, pioneering, service to others and world transformations.--underlie the ideologies of Amway, Mary Kay Cosmetics and Fuller Brush, the direct sales companies analyzed by Shupe and Bromley.....the metaphors have the "motivating, commitment-building power into which social movements--religious or commercial--try to tap." [Miami Herald. "Top direct -sales companies are called a ‘quasi-religion’." 11/27/86]
While there seems to be positive aspects and stimulus for change in work and social relations (and the dream of a more "secure" economic freedom) in reach of such business enterprises, there is much potential for abuse and exploitation. [This issue continues to spark important questions, critiques, and indeed controversy]. MLMs have drawn particular criticism in regard to the critical issue of recruitment. This aspect of the Amway Corporation is noteworthy and merits careful analysis.
Richard de Voss and Jay Van Andel launched Amway in 1959. In the beginning the company focused primarily on the development and sale of household goods. However, since these early beginnings it has grown into a major corporation with "Amway and its affiliates record[ing] $6.8 billion at estimated retail for the fiscal year ending August 31, 1996, an 8% increase over the previous year"[www.amway.com] (Profits are expected to soar above $ 7 billion in 1998). They also have in excess of 2.5 million independent distributors around the world in over 70 nation-states. The company has continued to grow in spite of the over fourteen lawsuits filed against the Amway Corporation and/or particular Amway distributors by private persons, Proctor & Gamble, the Federal Trade Commission (FTC), as well as the government of Canada.3 While the company’s profits continue to grow, this cannot be attributed to the Corporation’s increased popularity in the United States. Indeed, Amway has been able to keep profit levels high due primarily to their increased expansion into foreign markets in the early 1990s (particularly Japan and Asia Pacific).4 Note the following chart drawn from a recent Business Week article "Amway II: The Kids Take Over" (Feb. 16, 1998):
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NA: 1987 Figures
For Latin America DATA: AMWAY CORP.
In order to maintain its customers and unique niche in the market for personal and household products, and given its high turnover rate (up to 80%), Amway has a vested interest in maintaining a high number of distributors and new recruits (particularly as a high percentage of Amway products are consumed by Amway distributors themselves [Vlasic, 1998: 70]). Thus while Amway claims to be the bearer of free enterprise, there is no small contradiction in this assertion. In many ways, Amway is not capitalist in that while it must continually reproduce (via recruiting) the networks of distributors who consume, market, and distribute Amway products, these networks, or more defined more simply here as a captive market. That is, in an ironic sense, this company which holds itself and its distributors as the guardians of a tried and true American entrepreneurial spirit, is a distinctly post-modern organization, acting in reaction and collusion to the present politico-economic situation). What thus initially appears to be a practice harboring positive socio-economic and cultural potential&endash;such as building a network of business contacts on personal interaction and relationships&endash;must therefore by appreciated as a very complex phenomena plagued by controversy. Louise Samways observes:
One of the best known multilevel marketing organizations is Amway. This hugely successful company started selling soap powder and now in some countries even sells cars. In order to make the most money in Amway, or to be truly "successful," it is necessary to move "upline" by recruiting more and more distributors like yourself, who themselves recruit distributors and so on. You [do not] make money just from the goods you sell but by getting a percentage of what the distributors you have recruited sell as well.As with all sales and marketing jobs, this requires extremely hard work and high motivation. Increasingly, Amway is adopting similar techniques to many cults in order to attract recruits, then to keep them involved and committed to the cause. For instance, Amway distributors are instructed not to tell you they are selling Amway up front. Usually you are asked to attend a meeting about an "exciting new business opportunity." In fact, Amway’s name may not be mentioned until after a good hour of sale’s pitch. [Samways, 1994: 52]
While businesses and organizations have always recognized the ways in which family and kin networks can expand the economic and social success, Amway has been particularly adept at harnessing family/kin "contacts." Indeed, in markets where they have been successful (such as in the fast developing South Asian and Chinese markets as well as the long standing profitable Japanese market), this has led to increased profit margins as well as high rates of new recruits. This has proven to be a complex and sometimes difficult experience.5 The following two stories, both drawn from a web-site of concerned ex-Amway distributors and concerned citizens, illustrate and abstract many common themes present in people’s reactions to Amway. What is interesting is the consistency of themes throughout the responses. These were reiterated in the many other web-sites of ex-distributors and critics of Amway.
Sbj: Time will tell
Date: 93-11-11 00:09:00 EST
From: GMZ2ndRow
"We had friends leave our circle of friends, even move away, left our church, etc because of Amway. My wife runs a successful parttime home business, and I had a wonderful job (I’m happy, at least). But these friends were convinced we were nuts. Now at 15, or 20 years old, I might have been nuts, but at 35, I’m not nuts anymore. Boring, maybe, but not nuts for being in my present lifestyle."The problem with Amway is that they have carefully researched and identified all the right "buttons" for successful interpersonal conversations. And you have to admit, the method works very well. Just like an awful tv commercial jingle that everyone remembers, anyway, the Amway pitch hits the pleasure centers of interpersonal feelings. The disgusting thing is that these feelings we receive are false, and have no basis for making us feel good inside. Buying soap and selling people soap doesn’t matter much in the big picture. [There is] about a 5 year cycle of Amway products, people, and how they leave the system, and some will become your friends. But it takes a few years, and we’ve found to never bring it up in conversations once it’s over.
[From: Schwartz@teleport.com(Sidney Schwartz), Subject: Comments on Amway]
Subj: RELATIVE LOST
Date: 93-11-11 13:34:27 EST
From: Jlowery
I LIKE MANY OTHERS, LOST A RELATIVE TO AMWAY. TWELVE YEARS AGO, AT A SHOWER THROWN FOR ME WHEN I WAS PREGNANT WITH MY FIRST CHILD, THIS RELATIVE SPENT THE ENTIRE TIME TRYING TO SELL PEOPLE, INCLUDING ME, AMWAY PRODUCTS. SHE HAS ALIENATED HER ENTIRE FAMILY. MOST OF US ARE CAREFUL NEVER TO SAY WE NEED OR WANT ANYTHING, BECAUSE SHE WILL BE SURE TO TELL US THAT AMWAY SELLS IT AND THAT THEIR PRODUCT IS BETTER THAN ANYONE ELSE’S. WE MISS THIS FAMILY MEMBER AND HOPE THAT ONE DAY SHE WILL FIND SOME OTHER, LESS OBSESSIVE, WAY TO MAKE A LIVING. [ibid.]
As I have noted earlier, and as the comments above reiterate, what is particularly disturbing to the public is the realization that the "interpersonal feelings" or "contacts" on the part of the distributor or family/kin member actually imply more about "time trying to sell" the dream, the product, the American Way--Amway. While the Amway Corporation does not publicly approve of the practice, some Amway distributor networks have taken on the practice of not revealing the exact nature of the business&endash;that is, their ties to Amway&endash;until much later (due to all the negative publicity Amway has received) in order to recruit people into the business. In addition, many critics question what happens to family/kin/community relationships once an MLM, specifically Amway, enters into the realm of social relations once considered to be sacred (or given the mythical status thereof). One critic of MLMs puts it this way:
..non-MLM real world businesses that offer products of interest to friends, family, etc.--such as insurance agents...--seem to be more circumspect in dealing with personal relationships in all but a few (and grievous) cases. But the MLMer is recognizable by duplicity of friendship overtures, overbearing glad-handling, full-time prospecting, outrageous initial deception, and social callousness. This is no accident, but rather sheer desperation. For the active MLMer is in a hopeless bear-trap--with hubris as one jaw and oversaturation the other.....What goes unnoticed to the MLMer is that when the neighborhood it turned into a marketplace, something precious is lost...which is not easily regained. [www.best.com/~vandruff/mlm1.html]
(My emphasis)
It then becomes apparent that while proving themselves as an example contrary to dominant market trends MLMs, direct selling, and Amway in particular, show themselves to be a complex and paradoxical phenomena. On the one hand it offers itself as a means of acquiring alternate sources of income (and if you’re lucky a "dream" lifestyle) while having more control over one’s work relations. And yet given the low success rate in Amway, "...the data from one investigative report reveal that only 1,000 of over 200,000 distributors ever achieved the rank of Direct Distributor or higher," it is also quite clear that the company does not offer success to anyone who enters the business [Bromley, 1995:151]. Curiously, however, doubt of one’s commitment to "the dream" can be very seriously interpreted in the Amway business. Streiker argues this indicates the extent to which "the product" in Amway masks more critical questions of the larger meaning and ideology of the organization:
The product is irrelevant. It is keeping "the dream" alive and resisting everything that could possibly rob one of "the dream" that counts. For "the dream" is God’s blessing, the divine will, the American Way, family, morality, and the free-enterprise system. Losing "the dream" is falling into Satan’s hands, spurning Americanism, advocating communism and free love, and being "a loser." "The dream" is also the supporter of the status quo which, in turn, favors and rewards those who keep the faith. The President [Ronald Reagan] and his inner circle praise and promote "the dream," while discouraging and diverting criticism. Hence, "the dream" becomes a cardinal article of faith, a foundation stone of America’s civil religion. [Streiker 1984: 128]
As Streiker describes it, the product lines in Amway come to signify and reveal something central to the growth of the company&endash;the role of ideology. Streiker’s comments remind us of Weber’s analysis of capitalism and the role that "calling" and "predestination" occupy in capitalist development and expansion. In dealing with this issue, however, I beg to differ with Streiker in denying any role to the product itself. Indeed, that the product, and consumption more generally, is consistently placed at center stage in Amway literature and media texts must indicate the importance of material social and politico-economic relations within the corporation (no matter how earnestly Amway fails to acknowledge them).
In the following chapters I will attempt to analyze this and other questions by looking at how Amway ideals and ideology infuse recruitment (Ch.II), product representations (Ch.III), social/gender organization (Ch.IV), as well as the more critical issue of consumption as it plays out and reacts to global processes. In looking at this one particular organization, I believe we will find certain social, political, and economic practices that may in turn provide valuable insights into more central questions surrounding consumption (such as the more central issue of meaning in a post-modern global economic context).