Amway India has reiterated that it will not change the way it does business in the State despite finding itself faced with an ‘unfortunate’ situation that has affected the livelihood of its 40,000 agent-families.

Offices of the direct selling company had recently been subjected to raids by law enforcement agencies as part of a crackdown on entities carrying out what has been suspected as ‘pyramid’ model of business.

AMWAY MODEL

A company spokesman said here that Amway and IDSA (Indian Direct Selling Association) had met with the State Government and explained to them the Amway business model.

Amway offers a low-cost, low-risk and high-potential business opportunity that gives individuals an additional source of income.

The company rewards individuals and groups by commissions and bonuses purely based on product sales.

All it takes to become an Amway distributor is an initial investment of Rs 995 and the ability to sell products to relatives or friends.

The uniqueness of Amway is the 100 per cent money back guarantee that it offers on both the business opportunity and the products.

EXIT OPTION

Anybody who joins the Amway business has the option of exiting the business within a period of 90 days from the date of joining the business and can claim a full refund of the initial investment.

In case customers are not satisfied with the quality of any Amway product, they have the option of returning the product within 30 days of purchase and claiming a full refund of the cost of the product.

Amway rewards its business owners for sale of products to consumers. The volume of products they sell determines the income they earn.

Distributors have the option to have sales teams of their own or be an independent sales person. In the case of the former, distributors earn commissions as a group/sales team.

SALES COMMISSION

This is similar to any typical sales organisation where practically everybody - from the field sales executives to the head of sales - has a share of the sales commissions.

The Amway and IDSA representatives had met with the Chief Minister, Mr Oommen Chandy, and urged him to constitute an independent committee comprising of Secretaries from various ministries that could study the subject.

(The State Cabinet has since proceeded to set up a high-level committee that has been asked study the business scenario and come up with a report.)

The committee, the spokesman said, could give stakeholders a chance to put forward their views and then come out with notification clarifying the differences between pyramid and genuine direct selling companies.

UNIQUE COMBINATION

Amway India is part of the Rs 4,120-crore direct selling industry, offering a unique combination of a good business opportunity and quality products.

Globally, Amway is a 50-year-old company based in the US with a turnover of $9.2 billion and operating in over 80 countries and territories.

With over 130 products in four categories and 5.5 lakh active distributors, Amway India has recorded a turnover of Rs 1,790 crore in 2010 - up from Rs. 1,407 crore in 2009 - and has about 40 per cent share of the Indian direct selling industry, the spokesman said.

For financial year 2010-11, the company has paid Rs 210 crore in taxes to Government exchequers across the country.

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