more likely to appear on the Amway list of promises is
promotional cassettes and books rather than more products. The
promotional material is designed to help an Amway distributor
?sell, sell, sell.? The basis for this activity is propounded by
American, Bill Britt. He and another American, Dexter Yager, run
two of the most successful ?systems? under the Amway banner. It
is said that about 90% of Amway?s products move through these two
In India, what is being discussed is the Bill Britt system. The
Advocate newspaper in the USA reported that to follow Britt?s
system is to spend hundred of dollars a year on motivational
tapes. Amway distributors are told that ?spending money to buy
these tapes is the key to building a large successful Amway
business.? Therefore, it is likely that new products peddled by
Amway distributors will not be more soap but more hope in the
form of these motivational materials.
One USA based distributor, an Indian (who has since left the
business), told me that these tapes were meaningless and were
sold to people by convincing them that they weren?t doing well
enough. He said that the tapes would become an item for sale and
Amway distributors will be selling them to each other in a self
feeding frenzy. I asked a Bangalore salesperson about this. He
said : ?Yeah, we?ve got that covered. We will buy one set and
make many copies of it an pass it around for free. This is
Exactly. That is exactly my problem with a business which makes
people hand over their savings to Amway to buy themselves a dream
and then try to create parallels between the growth of Amway and
the growth of the church to justify themselves. Bill Britt is
reported to be unashamed to use God to promote the Amway trade.
He reportedly said once that he sponsors a system
set in place by Jesus. ?There was a man that sponsored twelve
people 2000 years ago and I?m in his group. Because he sponsored
twelve and he taught us sponsoring, he now has one-and-a
half-billion people in his organisation. So I think we have a
pretty good precedent of what sponsoring is all about.? (All we
have is the Shankaracharya who keeps to himself most of the
time.) Even with all the two-paise philosophy that foreign Amway
distributors can throw at Indians, it falls to the sensible ones
to try and understand the hidden agenda and separate the lure of
lucre from the realities of returns. That may happen, if not
immediately, then later. After all, this is India, man.
And What Of Products
Most Amway salespeople agree that the present range of six
products is not sufficient to generate usage of Rs. 1500 a month.
They expect more products will be added. I asked the Amway
officials when they would release more products, what products
and at what price. One employee said he had absolutely no idea
and wouldn?t tell me anything even in the vaguest detail because
he hadn?t been told anything himself.
I mentioned this to a distributor. It distressed him
considerably and he told me that he would call Amway ?and give
them a royal bollocking?. How could he be made to wait to earn
his PVs? According to the Bill Britt system, he should soon
retire to his counting house.
Steven Beddoe contradicted his Bangalore office. He said that
Amway plans to launch new products every three months. By
August, a laundry detergent. By October, a hand cream soap. By
December, a toothpaste. (Bye, Bye Colgate Palmolive?)
Another Mathematical Conundrum
In the course of conversation, Beddoe mentioned that Amway
maintains Rs. 28 crores worth of product stock. I asked him how
many months worth of inventory that represented. He consulted
with his finance man said, nine months. That works out to a sale
of Rs. 3.1 crores per month. At the stated average of Rs. 1500
per Amway distributor per month, it works out to 20,667 users. A
mere 20,667 Amway users for the whole of India? With many more
people than that having paid up the Rs.4200?
If all Amway did was to manufacture and sell their products
through door-to-door salespeople there would be no problem. The
choice of purchase is left up to the individual. By asking for
deposits from buyers in the beginning and again every year, it
looks like Amway seeks to build a captive consumer base. Once
someone has paid Rs. 4200 to Amway, he is naturally disinclined
to buy Nivea hand cream instead of Amway Gly-Honey hand lotion.
The element of personal choice is thus prejudiced.
By involving their ?distributors? in a complicated system of
down-the-line commissions (which most of them showed no signs of
comprehending), they are given the impression that there is a
limitless market for Amway products. The truth is that the
market share for Amway is as limited as the market share for any
other product. Traditional retail trade is not about to
collapse. And because of the expensive price structure, the
growth of the market is restricted to the very wealthy.
Calling this ?an opportunity to use world class products? is a
bit like calling the purchase of a Mercedes Benz for Rs. 25 lakhs
an ?opportunity?, when an efficient Maruti 800 for one-tenth of
that price will do nicely. With all these constraints, telling
people of profit mechanisms tied into several thousand people
buying Rs. 1500 worth of Amway soaps every month seems laughable
in a country where entire families lead their lives on less
Transplanting an American operation into India is downright
dangerous under the circumstances. The per capita GDP in the US
is $26,980. The per capital GDP of India is US$ 340. (Source :
Barclay?s Bank Economics Department.)
The cost of becoming an Amway distributor in the USA is US$ 120.
In India, they have simply multiplied this by 35 and made it Rs.
I Have Seen The Light ?
And If You Haven?t, You?re Not My Friend
The parallel with an evangelist (with the light in his eyes who
gives you unsolicited advice about Jesus, equally, the
all-American Hare Krishna selling you the Bhagavad Gita) is
inescapable. You can recognise him in a minute. His opening
lines run something like this : ?I have a wonderful way for you
to make a lot of money with little effort.? : Tell such a person
: ?Oh, you?re talking about Amway, aren?t you?? And watch his
expressions fail him immediately. He squares his shoulders and
gives you his complete attention.
He is the Amway distributor. He is in your face. He looks
directly in your eyes and gesticulates in your peripheral vision.
You can?t look anywhere but at him. Nothing matters to him but
you. You are the next cog in his wheel of fortune. He expects
that you will be lured into his web of promises. The promise
that he has the ability to make you a millionaire. The promise
that you will not just get a life, but a lifestyle. That your
good fortune can be willed to your children and that you and your
progeny will live off what he will describe to you as ?residual
income?. His evangelism is complete.
I overheard one distributor tell his wife : ?I think so-and-so
will soon become a convert?. His ability to make money depends
on your signing up. Your ability to make money depends on who
you can get to sign up and thus the web expands.
In Bangalore, the growing tribe of Amway salespeople have
inspired all kinds of emotions in non-Amway distributors. The
?I-have-seen-the-light? evangelism is all but alien to our
society and it inspires dread in many.
Writer Ajit Saldanha said : ?When I see an Amway sales guy, I
leap like a nimble mountain deer out of his path.?
Hotelier Rishad Minocher said : ?I laugh at them. At least a few
dozen people have tried to ?convert? me.?
A fashion designer said of her friends : They get very excited
about this whole thing. But it?s not for me. I will not be seen
Another lady working for a media relations company complained
that one of her colleagues has stopped doing any office work :
?He uses the office phones to prospect for Amway business and
ties up al the lines. Normally a very dumb fellow, he is
emotional about Amway and his own livelihood matters to him no
US$ 120 does not represent anything close to a risk even for the
lower income American. Rs.4200 exceeds the monthly income of
most Indians. And a 250 ml shampoo for Rs. 315 is unspeakable
for all except the richest among us. One Amway employee said
that they did not want the Indian middle class to get hurt but
that Amway could not possibly check into the economic background
of every sign up. Bullshit. Even small finance companies in
India have the mechanism to look into the backgrounds of their
borrowers. That is because they themselves would get hurt if the
borrowers failed. The reason Amway does not look into the
background of their distributors is because Amway will not get
hurt if the distributor fails. (They are taking his money up
Quite correctly, I think, Amway should not worry itself about the
fate of people who willingly sell the family silver to become
Amway distributors. After all, who is anyone to say that the
Indian middle class knows not what is does. (Steven Beddoe made
the gratuitous offering that he felt Indians are not dumb
people.) And what Amway is doing is to tell all their prospects
that they could make pots of money. But with the full knowledge
that many of them will not. The Latin phrase, ?caveat emptor?
simply means ?let the buyer beware?.
But what if nobody is a buyer and everybody is a seller ? with
soap in their hands and hope in their hearts?