Beijing banned all direct selling activities in mainland China in the spring of 1998. This ban affected Amway as well as Avon, Mary Kay, and all other MLM's. In Jun 98, Avon was cleared for retail operations in China. In July, 98, Amway was cleared for retail operations. It will be interesting to see if Amway's products can compete in a retail only environment.
Click here for two stories about Amway China's operation. The first article is from the South China Morning Post and the the other on is from PRNewswire.
Wall Street Journal -- July 7, 1998 :
Japan Consumer Agency Asks Amway To Reconsider Sales Methods TOKYO (Dow Jones)
The Japan Consumer Information Center said Tuesday it has requested Amway Japan Ltd. (AJL or 9821), a direct distributor of imported household goods, to reconsider measures to improve its sales promotion methods.
Amway Japan received a written warning from the agency on May 8, and submitted reports on improvement plans to its operations in early June,an agency official said.
Among the numerous complaints that the center has received from consumers was the fact that remuneration as a distributor wasn't as high as was promised by the company. Still others objected to their family members' overzealous involvement in the business.
The business improvement report which Amway Japan submitted earlier lacked concrete measures, the agency official said. The company is now expected to submit another report for improvement plans.
If the consumer information center doesn't see any improvement, it could then issue a formal public warning against the company, another agency official has previously said.
Amway Japan officials weren't immediately available for comment.
It seems like more and more papers are writing articles about Amway. On July 09, 1998, the Dallas-Fort Worth Weekly wrote an article called Inside Scamway. What makes this article interesting is not that they reveal new information about the activities of AMO's, but that provides more independent documentation on the activies of AMO's
It was only a matter of time before a reporter in India investigated Amway and distributor activities in India. Ramjee Chandran performed a detailed investigation with Amway India officials and distributors expanding their business in India. It's an exceptional article -- Amway Distributors: With Soap In Their Hands And Hope In Their Hearts
On June 9, 1998, the Wall Street Journal published an article called "The Face of Amway Japan." It's a story about the top distributor in all of Amway, Kaoru Nakajima. Mr. Nakajima has achieved something no other distributor in the world has accomplished -- Double-Crown Ambassador. That's 42 personally sponsored direct legs. This is truly an amazing accomplishment. According to the WSJ, this man has approximately 750,000 distributors in his organization and personally accounts for about 40% of Amway Japan's sales and 12% of Amway's world-wide sales. In his Amway "retirement" he puts in 14 hour days. And what is his Amway income for doing all this volume? According to the WSJ, $2.15 million per year. (The WSJ article did not mention whether this income was pre-tax or after tax.)
While I am certain that the bonus structures in Japan may be slightly different than in North America the same basic structure exists ie Leadership bonuses, sapphire bonuses, emerald bonuses, diamond bonuses, EDC bonuses, etc. The DD performance bonus is 21% instead of 25% in North America and there are undoubtly incentative programs available in one country that is not available in the other.
If this is what a double-crown ambassador makes...what would a mere diamond make from Amway income? Think about it when you hear all those claims (or the excuses that are used to refute this information.)
On June 14, 1998, the New York Times published an article where Amway was able to get a court order in Poland to prevent a Polish-made film called "Welcome to Life" from being shown on television. This court order has created an unusually strenuous debate in Poland about Freedom of the Press.
The suppressed report was dominated by hard-sell pep rallies that are a hallmark of the company and by the motivational jargon of its distributors.
The film goes on to show a meeting in a large hall where a man on the stage shows how door-to-door distributors should get householders to accept motivational tape recordings that the distributors sell. He demonstrates how a distributor should come within an inch of hitting a would-be customer on the head with a tape, forcing the person to accept the tape as a way of protecting himself. Much of Amway's business, the film says, is devoted to distributing motivational tapes intended to make distributors think the Amway way. (emphasis is mine)
Please visit the New York Times and read the entire article. You will need to sign up for the archive search...but if you retrieve 10 or fewer it won't cost you anything. If you would rather not do that...click here to read the article.
On July 19, 1998, The Washingon Post followed up with this article: Polish Film Ignites Free Speech Debate.
Award winning investigative reporter Greg Garland investigated Amway and AMO's for three months. His investigation included interviews with Amway corporate officials, AMO leaders and the Federal Trade Commission. I won't emblish it. Read for yourself Amway: An empire built on dreams
Here's a 3-part article by the Charlotte Observer in 1995 on Dexter Yager....
Part 1--Amway The Yager Way
Part 2--Yager Motivational Tapes Reel In Cash
Part 3--Yager Puts Money Behind His Politics.
