From: rjn@FC.HP.COM (Bob Niland)
Newsgroups: alt.business.multi-level
Subject: Questions about Amway
Date: 12 Nov 92 20:40:14 GMT
Reply-To: rjn@FC.HP.COM
Organization: Hewlett-Packard/WSY Ft.Collins,CO,USA
X-Newsreader: TIN [version 1.1.8 PL6]

Since there are some Amway Distributors and advocates in this group, I was
wondering if any of you would answer some questions.  Obviously I have never
had an Amway presentation, or I would already have answers.  A family member
did Amway some 15 years ago, but I was not living in the same state at the
time and didn't pay much attention.

The questions...

* How many "Amways" are there?  The traditional Amway-branded product line
  seems to be what most people are familiar with, but I have seen some
  indications that there is a second organization that has a catalog of
  non-Amway products.

Assume that the remainder of my questions apply to the traditional program.
If the alternative (if any) program varies, and you wish to comment on it,
please identify it as such.

* When was Amway founded?  How many Distributors are presently enrolled?

* I understand that Amway fought some legal battles in the US to establish
  the legitimacy of MLM.  Was that effort completely successful, or do Amway
  and other MLMs still have obstacles or problems in some states?  If so,
  what are the problems?

* How many products are in the traditional branded product line?  How much
  would a new Distributor need to spend to buy one of each?

* What percentage of the branded products are significantly differentiated
  (in content and effectiveness) compared to similar store-bought products?

* Does Amway REQUIRE its distributors to sell products to non-enrolled
  customers, or can you succeed in the business just by buying product for
  your own use, as well as enrolling others and supplying inventory to them?

* If selling is required, what are the quotas, and what are the penalties
  for failing to make quota?

* I understand that below the "Direct" level, a Distributor gets product
  from the up-line sponsor.  Do all Distributors, at all levels, pay the
  same wholesale price, or do the Directs and above get a better deal?

* Do up-line Distributors attempt to carry enough inventory to immediately
  fill down-line orders, or do they pass the order through their up-line
  Direct who then forwards it to the company for drop-shipping?  If so, what
  is the premium for drop-shipping?

* What is the typical start-up inventory for a new Distributor?  What is the
  typical on-going inventory for Distributors below "Direct"?  Does the need
  for inventory change at the Direct level?

* At the entry level, what is the percentage or fractional relationship
  between:
  - suggested retail price,
  - wholesale price and
  - valuation for bonus purposes?

* At the Direct level, can products be ordered in less than case lots?  
  What is the premium for doing so?

* When attainment goals are met for advancement, for example to the "Direct"
  level, are the new position benefits granted:
  - retroactive to the beginning of the month in which attained
  - on the date of attainment
  - at the end of the month in which attained
  - at the end of the following month
  - at the beginning of the next fiscal or calendar quarter
  - at the beginning of the next fiscal or calendar year

* Some of the attainments appear to be quota based, requiring X volume for Y
  months, and maintenance thereafter.  What happens if subsequent to making
  a goal, you fail to maintain it for one month, two months, etc.  Must you
  go through a requalification all over again, or are there more severe
  penalties?

* What happens if anyone in your downline qualifies for a greater level than
  you are at, before you do?

* At least at the lower levels, bonuses are apparently calculated and paid
  by the Distributors to their down-lines.  What enforcement and controls
  are in place to ensure that these payments are correct, made in a timely
  fashion, and drawn on sufficient funds?  If a Distributor suspects they
  are being cheated, what recourse is available and how reliable is the
  resolution process?  Do Distributors have the right to examine the books
  of their sponsors?

* I once got a brief look at the simplified Amway business plan.  There were
  three identical disclaimers on the document, each stating that only 45% of
  enrolled Distributors are "active" (which I suspect is typical for MLMs),
  and that the average active Distributor earns (as I recall) $62.50 per
  month in bonuses.  Is the $62.50 figure before or after deducting payments
  that Distributors must pass on to their down-lines?

* What do the terms "roll-up", "break-away", "buy-in" and "front-loading"
  mean in the Amway context.  When do they apply and what are their
  consequences?

* Once you have a successful Amway business, and you decide to retire,
  become a monk or emigrate off-planet, can you sell the business to someone
  else as a going concern?

Regards,                                              Hewlett-Packard
Bob Niland      Internet: rjn@FC.HP.COM               3404 East Harmony Road
                CompuServe:  71044,2124               Ft Collins CO 80525-9599

This article represents only the opinion[s] of its author, and is not an
official or unofficial position of, or statement by, the Hewlett-Packard
Company.  The text is provided for informational purposes only.  It is
supplied without warranty of any kind.
Newsgroups: alt.business.multi-level