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Formal information

Amway is a direct selling company and manufacturer that uses network marketing to sell a variety of products, primarily in the health, beauty, and home care markets.Amway was founded in 1959 by Jay Van Andel and Richard DeVos. Based in Ada, Michigan, the company and family of companies under Alticor reported sales growth of 9.5%, reaching US$9.2 billion for the year ending December 31, 2010. Its product lines include home care products, personal care products, jewelry, electronics, Nutrilitedietary supplements, water purifiers, air purifiers, insurance and cosmetics. In 2004, Health & Beauty products accounted for nearly 60% of worldwide sales.Amway conducts business through a number of affiliated companies in more than a hundred countries and territories around the world.] Amway was ranked No.114 among the largest global retailers by Deloitte in 2006, and No.32 among the largest private companies in the U.S. by Forbes in 2010. Amway's business practices have been the subject of controversy and the company has been involved in several court cases in the United States, Canada, and elsewhere.

History
Founding

Amway Japan Head Office.

Jay Van Andel and Richard DeVos, friends since school days, had been business partners in various endeavors including a hamburger stand, air charter service, and a sailing business. In 1949 they were introduced by Neil Maaskant (Van Andel's second cousin) to the Nutrilite Products Corporation.Nutrilite was a California-based direct sales company founded by Dr. Carl Rhenborg, developer of the first multivitamin marketed in the United States. In August 1949, after a night-long talk, DeVos and Van Andel signed up to become distributors for Nutrilite food supplements. They sold their first box the next day for $19.50, but lost interest for the next two weeks. Shortly thereafter, at the urging of Maaskant, who had become their sponsor, they traveled to Chicago to attend a Nutrilite seminar. The meeting was at a downtown hotel, with over a hundred people in attendance. After seeing promotional filmstrips and listening to talks by company representatives and successful distributors, they decided to pursue the Nutrilite business opportunity with enthusiasm.

They sold their second box of supplements on their return trip to Michigan, and rapidly proceeded to develop their new business further.] In 1949, DeVos and Van Andel had formed Ja-Ri Corporation (abbreviated from their respective first names) for importing wooden goods from South American countries. After their trip to the Nutrilite seminar, they dropped this business and Ja-Ri became their Nutrilite distributorship.] In addition to profits on each product sold, Nutrilite also offered commission on the sales of products by new distributors introduced to the company by existing distributorsa system today known as multi-level marketing or network marketing. By 1958, DeVos and Van Andel had built an organization of over 5,000 distributors. However, following concerns about the stability of Nutrilite, in April 1959 they and some of their top distributors formed The American Way Association to represent the distributors and look for additional products to market. Their first product was called Frisk, a concentrated organic cleaner developed by a scientist in Ohio. DeVos and Van Andel bought the rights to manufacture and distribute Frisk, and later changed the name to LOC (Liquid Organic Concentrate).] They subsequently formed Amway Sales Corporation to procure and inventory products and to handle the sales and marketing plan, and Amway Services Corporation to handle insurance and other benefits for distributors (Amway being an abbreviation of "American Way"). In 1960 they purchased a 50% share in Atco Manufacturing Company in Detroit, the original manufacturers of LOC, and changed its name to Amway Manufacturing Corporation. In 1964 the Amway Sales Corporation, Amway Services Corporation, and Amway Manufacturing Corporation merged to form a single entity, Amway Corporation . Amway bought control of Nutrilite in 1972 and full ownership in 1994.

International expansion Amway expanded overseas to Australia in 1971, to Europe in 1973, to parts of Asia in 1974, to Japan in 1979, to Latin America in 1985, to China in 1995, to Africa in 1997, to India and Scandinavia in 1998, to Russia in 2005, and to Vietnam in 2008.

Quixtar Main article: Amway Global In 1999 the founders of the Amway corporation established a new holding company, named Alticor, and launched three new companies: a sister (and separate) Internet-focused company named Quixtar, Access Business Group, and Pyxis Innovations. Pyxis, later replaced by Fulton Innovation, pursued research and development and Access Business Group handled manufacturing and logistics for Amway, Quixtar, and third party clients.] The main difference was that all "Independent Business Owners" (IBO) could order directly from Amway on the internet, rather than from their upline "direct distributor", and have products shipped directly to their home. The Amway name continued being used in the rest of the world. After virtually all Amway distributors in North America switched to Quixtar, Alticor elected to close Amway North America after 2001. In June 2007 it was announced that the Quixtar brand would be phased out over an 18 to 24 month period in favor of a unified Amway brand (Amway Global) worldwide. In 2006, Quixtar published The Quixtar Independent Business Owner Compensation Plan, in which the company reported that the average monthly gross income for "Active" IBOs was $115.

Area product

Amway Products Available by Country

If you are a manufacturer, doesn't it make sense to put your product in Amway's distribution system and have over 2.5 million distributors around the world market your products/services? Sounds reasonable and logical doesn't it? But if you have heard the above statement, or something similar to it, at a presentation of the Amway Sales & Marketing Plan, you should know that it is simply not true. Listed below is a table of the products that Amway markets in the foreign countries that they operate in. Typically when Amway opens in a new foreign market, they will start with a limited number of Amway produced cleaning products then slowly introduce more cleaning products. I would imagine that their initial success in the country plays an important part of when and how many products are introduced. Last April, when Amway opened in the Phillipines, they started with only 10 products. I have also heard from a person from South Africa who has told me that Amway is planning on opening with 10 products there also. As far as non-Amway manufactured catalog items are concerned, there are only a few countries where a limited number of catalog items are available. I have no way of knowing if the products available to distributors in the U.S. are available in these foreign markets or whether the catalog items available in these foreign markets are available in the U.S. I'm sure some of them may be. As you can see from the table below only some European countries, Australia, Canada and Mexico have catalog items. In Japan, they only market men's and ladies apparel and accessories. In Thailand, they only market a limited number of items and in Malaysia, only locally produced products are available. Where did I get this information? Amway's Global Village..

Amway Product counts by Country


Country Product Count Over 100 Amway Products Over 200 AMWAY products 1,300 catalog items Product categories

Argentina

Personal Care, Home Care, Home Tech

Australia

Beauty, Health and Fitness, Home Care, Home Tech, Catalog

Austria Belgium Brazil Brunei Canada Chile China Colombia Costa Rica Czech Republic El Salvador

800 Beauty, Nutrition and Wellness, Home Care, Eurocatalogue ?? Beauty, Health and Fitness, Home Care, Home Tech 200 Homecare, Housewares, Nutrition & Wellness, Artistry, Personal Care,

??? Beauty, Health & Fitness, Home Care, Home Tech 350 Amway 3,500 Catalog 54 Home Care, Personal Care 12 Personal Care, Home Care Over 20 Personal Care, Home Care 25 Personal Care, Home Care ?? Personal Care, Home Care, Artistry Home Care, Personal Care, Nutrition and Wellnes, Home Tech, Beauty, Coffe and Milk

Over 300

Germany

??? Beauty, Health and Fitness, Home Care, Home Tech, Eurocatalog

Greece Guatemala

??? Personal Care, Home Care Over 300 Home Care, Personal Care, Nutrition and Wellnes, Home Tech, Beauty, Coffe and Milk Home Care, Personal Care, Nutrition and Wellnes, Home Tech, Beauty, Coffe and Milk

Honduras Hong Kong Hungary Indonesia Italy

Over 300

??? Beauty, Health & Fitness, Home Care, Home Tech Over 300 Home Care, Personal Care, Nutrition & Wellness, Home Tech Over 100 Home Care, Personal Care, Nutrition & Wellness, Housewares ??? Personal Care, Nutrition & Wellness, Home Care, Home Tech, Eurocatalog Home care, Personal Care, Nutrition, Housewares, A.W.P. Men's/Ladies' apparel and accessories Home Care, Personal Care, Skin Care, Nutrition & Wellness, Home Tech Nutrition & Wellness, Personal Care, Home Care, Home Tech, Personal Shoppers catalog -- More than 60 locally sourced products.

Japan

130 Amway

Korea

70 120 Amway products Over 60 Catalog items ?? Amway Products 60 Catalog Products

Malaysia

Mexico

Beauty, Health & Fitness, Home Care, Home Tech, Catalog

Netherlands New Zealand Panama Philippines

??? Beauty, Health & Fitness, Home Care, Home Tech, Eurocatalog ??? Beauty, Health & Fitness, Home Care, Home Tech, Eurocatalog 400 Home care, Personal care, Nutrition and Wellness, Home care, Home tech

10 Home care, Personal care

Poland Portugal Slovak Slovenia 434 Amway Products 245 Catalog Items

???

Beauty, Home care, Home Tech, Nutrition & Wellness (added May 97)

??? Beauty, Health & Fitness, Home Care, Home Tech, EuroCatalog ?? Personal Care, Home Care ?? Personal Care, Home Care

Spain

Home care, Personal care, Nutrition & Wellness, Housewares, Eurocatalog

Switzerland Taiwan

?? Beauty, Home Care, Home Tech Over 300 Beauty, Nutrition & Wellness, Home Care, Home Tech Cosmetics, Personal Care, Nutrition & Wellness, Home Care, Home 400 Tech, Personal Shoppers Catalog: Coffee, Jewelry, Leather Goods, Business Wear, and more. ?? Personal Care, Home Care 400 Amway Catalog Over 100 Amway Products Home Care, Laundry Care, Car Care, Gormet Cookware, Nutrition & Wellness, Personal Care, Eurocatalog

Thailand

Turkey United Kingdom

Uruguay

Personal Care, Home Care, Home Tech

Brands
Amway's product line grew from LOC, with the laundry detergent SA8 added in 1960, and later the hair care product Satinique

(1965) and the cosmetics line Artistry (1968). Today Amway manufactures over 450 products, with manufacturing facilities in China, India and the United States, as well as Nutrilite organic farms in Brazil, Mexico and the United States (California and Washington State). Household cleaners Amway is best known in North America for its original multi-purpose cleaning product LOC, SA8 laundry detergent, and Dish Drops dishwashing liquid. In the January 2007 issue of Consumer Reports, SA8 with Bioquest was rated the best-performing laundry detergent, scoring 99 out of a possible 100 points. Consumer Reports did, however, criticise SA8's pricing, a situation which was disputed by Amway. Consumer Reports conducted blind testing of detergents in 2010 and ranked versions of Amway's Legacy of Clean detergents 9th and 18th of 20 detergents tested. Consumer Reports program manager Pat Slaven recommended against buying the products because consumers can "go to the grocery store and get something that performs a whole lot better for a whole lot less money.

Health and beauty Amway's health and beauty brands include Artistry, Beautycycle, Time Defiance, Artistry Essentials, Pure White, Satinique, Tolsom, Body Series, Glister, Moiskin (South America),[34] Nutrilite, Nutriway (Scandinavia and Australia/New Zealand), eSpring, Atmosphere andiCook as well as XL and XS Energy drinks. Artistry Main article: Artistry (cosmetics) Amway's Artistry products include skin care, cosmetics, and anti-aging creams and serums. Nutrilite Main article: Nutrilite Amway's largest selling brand is the Nutrilite range of health supplements (marketed as Nutriway in some countries), and in 2008 Nutrilite sales

exceeded US$3billion globally. In 2001, five Nutrilite products were the first dietary supplements to be certified by NSF International. Surveys by independent group Consumerlab.com since 2002 have rated Nutrilite as having the highest customer satisfaction rating (96% in 2006) in the direct selling/MLM brand category. In 2006, 2007, 2008, and 2009 in the nutrient and health food category, Nutrilite won "Platinum" and "Gold" awards in Malaysia, China, Taiwan, Thailand, and Asia overall in the Reader's Digest "Trusted Brands of Asia" survey. In 2008 Nutrilite scientists, in partnership with Alticor subsidiary Interleukin Genetics won the 12thJohn M. Kinney Award for Nutrition and Metabolism for their research into the interaction between nutrition and genetics. In January 2009, Amway announced a voluntary recall of Nutrilite and XS Energy Bars after learning that they had possibly been manufactured withSalmonella-contaminated ingredients from Peanut Corporation of America. The company indicated that it had not received any reports of illness in connection with the products. eSpring Amway's eSpring water filter, introduced in 2000, was the first home water treatment system to incorporate a carbon block filter and Ultraviolet disinfection unit, becoming the first home system to achieve certification for ANSI/NSF Standards 42, 53 and 55.The unit was also the first commercial product to include sister company Fulton Innovations eCoupled wireless power induction technology. Fulton Innovation introduced the technology in other consumer electronic products at the 2007 International Consumer Electronics Show. Companies licensing this technology include General Motors, Motorola and Visteon.In 2006 eSpring was named Product of the Year by the Poland-based non-profit World Foundation of Health, Heart and Mind. eSpring has won numerous Gold and Platinumawards in the Reader's Digest Most Trusted Brand Asia surveys.

Quality
One of our readers, Stef, commented: "Why are you comparing only one product? How about you look at say

DishDrops or window cleaner or any other L.O.C. product? ...you will realize that the price would be much cheaper that in retail with even or better quality. What do you REALLY know about the products?"

A common argument from many IBO, and a fair question. Lets address Stef and those with like minded ideas. I encourage people to do their own research on any and all products, to come to their own conclusions. As previously mentioned past research done by others covering the majority of products has indicated Amway products are 50% more expensive on average. The one comparison detailed by me XS Energy drinks, was because XS drinks were one of the only products marketed direct to me, and is listed in the Network 21 presentation as 1 out of 8 of the "most successful exclusive product lines". In the article linked above we provided data proving XS was 18% more expensive than a similar brand name energy drink. If one of their most "successful product lines" is overpriced, what hope do their "less successful" products have? Very little. I have an open mind, I made the mistake of initially assuming Stef to be correct. With such an adamant statement as "the price (of Amway's dish washing detergent) would be much cheaper" who wouldn't believe that? Naturally I further investigated with a curious mind. The results of the research show Stef's claims were incorrect, by a surprisingly massive margin. I am amazed (amused, and a little worried) someone even made such a claim when there is such easily available and damning evidence to the contrary. If you are going to make such wild and ignorant claims please research them first, it would be foolish not to!

Before TQM

Amway India plans Rs 55 cr expansion by Dec 2009


Tushar Pawar / Mumbai/ Baddi May 15, 2009, 0:55 IST With an aim to meet the market demand, Amway India Enterprises Pvt Ltd, a major direct selling FMCG Company in the country, is planning to triple its production capacity by the end of the current calendar year 2009, at an investment of Rs. 55 crore. The company has said it will expand the production capacity at its contract manufacturing facility in Baddi (Himachal Pradesh).

The company has just inked an agreement with its Baddi-based leading vendor Sarvotham Care Ltd for the purpose. Amway India is a wholly owned Indian subsidiary of the US $ 8.2 billion Amway Corporation, Michigan, USA, one of the largest Direct Selling Companies in the world. The company manufactures its production through seven third-party contract manufacturers in the country, with Baddi-based Sarvotham Care being Amway Indias largest vendor (contract manufacturer). Around 85 per cent Amway products sold in India are being manufactured by its vendor Sarvotham Care. With an aim to meet the market demand, we are planning to triple the production capacities by December 2009. We are adding four new manufacturing lines at our contract manufacturing facility in Baddi in Himachal Pradesh. The work is expected to start around mid-May and to be completed by the end of the current calendar year 2009. An investment for expansion is estimated to cost at Rs. 55 crore, said William S Pinckney, Managing Director & CEO, Amway India Enterprises Pvt Ltd, at a press conference during the Baddi plant visit for select media reporters. Stating that the direct selling (DS) industry has good potential in the country, he said, Direct selling industry in the country is estimated at Rs. 3,500 crore. Amway Indias has market share of 30 per cent in the country. Amway India grew by 40 per cent

in recession-hit 2008 touching Rs. 1,128 crores (from Rs. 800 crore in 2007). We are expecting to achieve 25 per cent growth for the next two-three years and the sales turn over target of Rs. 2,500 crore by 2012. Baddi facility is spread over 1.60 sq ft area and presently has five manufacturing lines. Amway India currently offers 110 products in five categories of Personal Care, Home Care, Nutrition & Wellness, Cosmetics and Gift catalogue. The company has 130 offices and 55 city warehouses across the country, covering over 4,000 cities and towns through its home delivery network

share holders
THIRTY LARGEST SHAREHOLDERS No. of Shares Held 1. 2. 3. 4. 5. 6. 7. 8. 9. GDA B.V. AmanahRaya Trustees Berhad - Skim Amanah Saham Bumiputera Citigroup Nominees (Tempatan) Sdn Bhd Employees Provident Fund Board Kumpulan Wang Persaraan(Diperbadankan) AmanahRaya Trustees Berhad - Amanah Saham Malaysia Valuecap Sdn Bhd Lembaga Tabung Haji AmanahRaya Trustees Berhad - Amanah Saham Didik Bank Kerjasama Rakyat Malaysia Berhad 84,990,283 22,924,700 8,161,133 7,836,400 7,000,000 6,854,900 6,246,331 2,922,000 684,600 500,000 % of Issued Capital 51.70 13.95 4.96 4.77 4.26 4.17 3.80 1.78 0.42 0.30

10. Employees Provident Fund Board

11. HSBC Nominees (Tempatan) Sdn Bhd - HSBC (M) Trustee Bhd For MAAKL Al-Fauzan (5170) 12. Amanah Saham Mara Berhad 13. Citigroup Nominees (Asing) Sdn Bhd - CBNY for DFA Emerging Markets Small Cap Series 14. AmanahRaya Trustees Berhad - Dana Al-Aiman 15. HLB Nominees (Tempatan) Sdn Bhd - Pledged Securities Account for Ho Teik Chuan @ Ho Sonney 16. HSBC Nominees (Tempatan) Sdn Bhd - HSBC (M) Trustee Bhd For MAAKL Dividend Fund (5311-401) 17. PM Nominees (Tempatan) Sdn Bhd - PCB Asset Management Sdn Bhd for MUI Continental Insurance Berhad 18. Permodalan Nasional Berhad 19. Tabung Amanah Warisan Negeri Johor 20. Chin Chee Kin 21. DB (Malaysia) Nominee (Tempatan) Sendirian Berhad - Exempt An for Kumpulan Sentiasa Cemerlang Sdn Bhd (TSTAC/CLNT) 22. Malaysian Reinsurance Berhad - As Beneficial Owner (MMIP Fund) 23. Lam Meng Choy 24. Ajeet Kaur A/P Inder Singh 25. Mehar Singh @ Mehar Singh Gill 26. Teo Chiang Hong 27. Wong Lok Jee @ Ong Lok Jee 28. AllianceGroup Nominees (Tempatan) Sdn Bhd - Alliance Investment Management Berhad for the Institute of Strategic and International Studies Malaysia 29. HSBC Nominees (Tempatan) Sdn Bhd - HSBC (M) Trustee Bhd for Kenanga Growth Fund (3795) 30. New Tong Fong Plywood Sdn Bhd

432,600 420,000 396,700 289,800 268,000 260,000

0.26 0.26 0.24 0.18 0.16 0.16

230,600 227,466 194,500 150,000

0.14 0.14 0.12 0.09

150,000 141,800 130,000 124,700 121.000 116.000 101.000

0.09 0.09 0.08 0.08 0.07 0.07 0.06

100,000 100,000 100.000 152,174,513

0.06 0.06 0.06 92.58

Business Requirements Procurement


VISION: Deliver lowest total cost across Alticor's global expenditure. MISSION: Create competitive advantage and improve profitability through people, processes, and Strategic Sourcing. Strategic Sourcing Strategic Sourcing is a discipline embedded within Amway and founded on the concept of lowest total cost sourcing. This discipline is: Systematic Amway has specific tools, processes, programs and a defined infrastructure to ensure we obtain the greatest value for our expenditures. Aggressive Amway holds our sourcing teams and suppliers jointly accountable for success. Cross-functional Amway gathers individuals from functional areas within the supply chain to review, recommend and implement comprehensive sourcing strategies.

It is important to note that Amway views our suppliers not merely as an extension but an integral link within our supply chain. Having our suppliers clearly aligned and integrated with Amway's business strategies and objectives will create on-going, mutual success. Sourcing Strategy Teams Sourcing Strategy Teams direct the sourcing activities for specific categories taking a global, category focused approach to procurement and driving toward lowest total cost in partnership with the supply base. Each cross-functional team considers, recommends and implements new sourcing strategies and supply management components that will optimize the supply base and drive global sourcing activities for the Alticor enterprise.

Sourcing Management Amway aggressively manages sourcing activities to maximize the value received for our annual expenditures. Focus is not only on price but also: quality, available capacity, and service, access to technology, logistics, regulatory issues, and replenishment lead times, when making sourcing decisions. By analyzing our categories of expenditures, deploying cross functional teams to develop strategies, effectively sourcing and executing against the strategy, we are focusing our resources to achieve lowest total supply chain cost. All Suppliers should be familiar with the following topics to assist us in our goals of lowest total cost and continuous supply chain improvement. Purchase Orders The Purchase Order is the primary authorized legal document for the procurement of goods and services from an outside source. The terms and conditions are printed on the back of the Purchase Order. Amway's preferred Purchase Order Transaction Process is EDI; however, other options are available to the supply base, including e-mail, fax, and ordinary mail. Although these are not integrated with our systems and must

be manually handled, they are provided so that suppliers with technical limitations have a process for transactional completion. Each of these options uses a hard copy purchase order which is sent to the supply base via the various transmittal options. The expectation is that suppliers will receive, review, and acknowledge the acceptance of the purchase order. Any changes to the order are also sent via these options or are called into the supplier by the Amway planner or buying assistant. Order acknowledgement and change order confirmation should be received at Amway via phone, fax or email within 24 hours of order placement. Proposals/Quotes All quotes for specified raw materials, packaging components, and services must have a complete breakdown of all cost elements, including labor, overhead, margin, raw materials, and components. Amway will require this for all initial evaluations as well as the ongoing establishment of goals and validation of price adjustments. Suppliers who do not provide this information may be disqualified from consideration. Vendor Managed Inventory (VMI) / Consignment Suppliers are encouraged to work closely with Amway to minimize inventory and increase inventory turns in a way that is mutually advantageous. Opportunities such for Consignment and VMI are available. Please contact your Amway Buyer for more information. eSourcing Amway has adopted an internet-based approach to managing our sourcing functions. Frictionless Commerce is an eSourcing technology allows suppliers to electronically submit and update information and provides for direct integration of supplier-based data with our eSourcing processes (RFI, RFP, Auctions, etc.) at no cost to the supplier. The synergy created by using Frictionless Commerce for supplier registration, along with other eSourcing functions, will improve efficiency within our supply chain and for our suppliers in the following ways: Privacy Information is securely stored for Amway use only. Easy Access Information can be accessed and updated easily via the internet. Efficiency Frictionless technology is used to respond to RFIs, RFPs and participate in eAuctions.

Data Storage Capability Important data and documents can be scanned and uploaded, including insurance information, certifications, and safety information. Visibility Amway commodity categories can be selected by suppliers and used as search criteria by ABG buyers in the sourcing process. Publicity Use of Amway/ABG/Alticor name is prohibited without prior written approval. Please contact the Amway Buyer with questions.

Supplier Visits Appointments are required. Please contact the Amway Buyer to schedule a visit. Gifts and Gratuities The Strategic Procurement Buying staff should not accept any gifts, gratuities, or favors from any supplier, broker, agent or others in the buyer/supplier relationship.