Why Amway Lost $3 Billion In Sales In 3 Year
by Ted Nuyten on February 14, 2017
According to Amway’s Business Brochure:
"More freedom. More flexibility. An Amway independent business offers you a path filled with possibilities, all on your terms. It’s a low-cost, low-risk way to start your own business regardless of your professional background, life experience, or education. You supply the passion and hard work, we’ll provide the training, support, inspiration, and rewards be in business for yourself but not by yourself."
Fact is that if any business, as in Direct Sales, declines, is not very attractive for a business builder.
Growth is what you need, momentum and a great compensation plan. Amway's official statement about the decline is: "Market conditions in China".
However, if you listen to former Amway diamonds and corporate executives, there is an other important issue: the outdated Amway's compensation plan. In some countries Amway's presence is almost already whipped out.
As one top earner point out:
"Competition is Amway’s problem. For so long they were the leader in an industry with few competitors. Today, there are thousands of companies with highly evolved and lucrative compensation plans, very favourable to distributors.
Changing products, branding, policies, marketing and other business strategies can all be done":
Changing a compensation plan to become more distributor friendly is almost impossible once the structure is set. I believe what was once their strength is now their Achilles Heel.
An other network marketing professional:
Amway is only the first one to experience this challenge from many more to come. Disruptive business models needed to move forward. Network Marketing is massively changing – and at speed of light.
From Amway's Business Brochure – (Top) Distributor Earnings:
The compensation plan, a stair step break-away, requires a lot of time and effort. If you really want to be profitable in Amway, you basically need to build 6 legs at once – called “Going Eagle”.
It requires the Amway distributor to effectively re-build a leg once it has reached what is called Platinum status. Basically, legs break off once they qualify, and the commissions turn into 4% royalties instead of commissioned pay-outs of 30%.
This kind of compensation plan worked well long time ago, however prospects and distributors are much better informed now-a-days, Amway's compensation plan is outdated, and that is not easy to fix.
We hope Amway management team figure it out soon 🙂
Amway is an $8.8 billion direct selling business based in Ada, Michigan, USA. Top-selling brands for Amway are Nutrilite™ vitamin, mineral and dietary supplements, Artistry™ skincare and color cosmetics, eSpring™ water treatment systems and XS™ energy drinks – all sold exclusively by Amway Business Owners.
Global sales in 2015 made Amway the No. 1 direct selling business in the world, according to the 2016 Direct Selling News Global 100. The company’s annual sales figure includes revenue from direct selling operations and other business holdings. For company news, visit globalnews.amway.com.