Amway's hard sell in South Africa

Mail & Guardian (Johannesburg)/September 19, 1997

Johannesburg - Amway has arrived in South Africa. Its products may work but the marketing is a minefield for the uninitiated, warns Andrew Worsdale.

On June 20, at 3.13pm, my household (or at least my PC) received unsolicited e-mail from Australia. I'd never heard of the correspondent, nor sent unbidden cyber-mail to him. It said: "I am expanding my business into South Africa and am looking for some ambitious contacts. If you are interested in making some serious money I would appreciate it if you could read on."

On August 15, we received yet another communication from a complete stranger, this time telephonic, from the United States, with the same imploring sales-talk attitudes ... both parties wanted us to become distributors in the multi-level marketing business that is Amway.

Amway (which one could take as standing for American Way, but the corporation flatly denies it) was started in the US in 1959 and now operates in more than 70 countries. Last year's worldwide turnover was a reported $6,3-billion.

The company launched in South Africa scarcely a month ago and claims to have signed up 10 000 distributors within two weeks. Basically, it's a home-shopping system specialising mainly in cleaning materials, soaps, detergents and cosmetics; in the US, however, it markets more than 1 000 products ranging from the car shampoo that's so safe you can also use it on your baby, to vitamin supplements, educational books and CD-ROMs.

An invitation from an established distributor enables you to become one. A starter kit of soaps, detergents and the like for R400 and a training course at R110 enables you to sell the products to friends, relatives and neighbours. But the affianced big bucks really only come by signing on others and the percentage commission varies from 21 with one new person to a maximum 3 from each new distributor on the "money chain".

It is legislatively protected from being a pyramid scheme, says general manager of Amway South Africa, Peter Beaumont, because there are no strict membership fees. If you join you buy the merchandise and because, he attests, it's "a quality product, many of the reasons people join is just to enjoy Amway's products".

The specialised method of marketing and economics employed is a minefield for the uninitiated. If you sign up another seller or are just buying sufficient stuff for yourself the amount of commission you earn rises in increments of 3 to a top level of 21 of sales. The whole business practice is littered with mumbo-jumbo — like bonuses, 70 rules (distributors must sell 70 of the products they purchase during a given month to earn bonuses), silver producers, crown, emerald and diamond distributors, and even a term called Detailitis, supposedly reserved for potential distributors finding their way through the minefield of terms, special bonuses, credits, and of course potential mega-wealth.

The corporation has come under fire of late; critics say the products are too expensive in the first place and the company makes its money through training tapes, books and motivational courses. Dexter Yager, one of the founders of Amway, has been a source of particular ire as the creator of the Tape/CD/Book of the Week on "how to be a good salesman" club (other titles include "Husband, Father, Leader", "Raising Christians — Not Just Children", and "God's Laws on Marriage and Sex"). He is quoted as saying "God gave us a life and then he gave us a choice — a choice to be a winner or a choice to be a loser. Choice to live in America or leave. Choice to get in Amway and be a winner, or laugh and be a whiner."

A 1996 article in the American political satire magazine Mother Jones entitled "She Did it Amway" says: "Amway relies heavily on the nearly fanatical — some say cult- like — devotion of its more than 500 000 US 'independent distributors'."

As they sell the company's soaps, vitamins, detergents and other household products, the distributors push the Amway philosophy. "They tell you always to vote conservative no matter what. They say liberals support the homosexuals and let women get out of their place," says Karen Jones, a former distributor.

Internet sites have sprung up vituperating Amway as a scary revivalist-type cult. Amway US's own home page even says in a section titled "Founder's Fundamentals": "Freedom is our natural state and most conducive environment in which to live, work, achieve, and grow. It allows our belief in God and for the opportunity to build a meaningful, purposeful life ..."

The next heading is Family — "The family is our primary social structure, providing love and nurturing, heritage and legacy. The family provides us with a consistent set of values, and a framework for growth and the ability to thrive as individuals."

Amway has been a subject of many lawsuits, including several from Procter & Gamble when it accused the pharmaceuticals giant of Satanism. And in the South African satirical journal NoseWeek, columnist Nick Paul compared the Amway scheme with "that first chain letter you got so excited about when you were 10 years old! Free money!"

He then commented: "The problem with a system like Amway is that, like any other, it needs to grow to accommodate greed." The publication received its greatest flurry of complaints, said editor Martin Welz. "There was a huge amount of calls. Basically with Amway if you're in it you have to get more people involved and here we had the classic case of victims becoming co-conspirators with their masters."

Before hitting South Africa, Amway set up in the Philippines and is moving to India next, all countries with poverty-stricken people that thrive on community-based religions — a natural fuel for the product.

Beaumont acknowledges that "the big issue in South Africa is that ordinary people don't have big business opportunities and many overseas people see this country as a market that could grow phenomenally".

Despite all the scare-mongering on the Net and in magazines, many of those I spoke to who have recently signed up are happy about the products. One, who wished to remain anonymous, said: "I was tired of being a badly paid, mentally overworked academic. Now I'm making money."

Another said: "They've got this highly concentrated liquid organic cleaner with a coconut aloe-vera base that was used to take crude oil off penguins in Australia. It's concentrated so it's economical. I mean 1kg of Amway washing powder is equal to 14kg of Surf Micro, but you've got to use it properly. Anyway, in the past moneylenders were seen as sinful as murderers and now banks are the mainstay of our lives. I see it all as a kind of good co-op."

I actually use the Amway products. I brush my teeth with Amway toothpaste, take the protein supplement and even cook using an Amway Queensaucepan. Even so, I wouldn't want to become part of the selling empire. I'm too panicked and will probably stick to Pick 'n Pay. But then, one man's poison is another man's selling tool and, of course, another man's preferred product.