Get the Facts!
Perception: “MLM / Amway Are Just Pyramids”
Facts:
• 27 million small businesses in the U.S. 1 o 52% are home-based 1
• MLM has become mainstream o Warren Buffet’s (the richest man in the world) 2 company owns one 3 o Have or have had: CITI ® Group 4 TIME WARNER ® 5 READER’S DIGEST ® 6 BODY SHOP ® 7 CRAYOLA ® Crayons 8
• 15 million people participate in U.S. 9 o 50% increase in the last 10 years 9
• $20 billion in sales 9
• 74% of Americans have purchased goods or services through Direct Sales, according to recent surveys 10 o More than television shopping and on-line computer services combined 10
• General Counsel for the FTC (speaking before the International Monetary Fund) 11 o Landmark ruling by FTC used Amway policies to show how legitimate multilevel marketing programs operate 11
o FTC recognizes that some people confuse pyramid schemes with legitimate MLM 11 MLMs have real product to sell MLMs actually sell their product to members of the general public
o AMWAY offers over 450 quality products (800 patents) 15 NUTRILITE ® is the largest selling brand of vitamin, mineral, and dietary supplements in the world based on to 2008 sales. The ARTISTRY ® brand is among the world’s top five, largest-selling, prestige brands of facial skin care and color cosmetics 13 Amway has been ranked the top online health and beauty retailer in the U.S. for six consecutive years according to Internet Retailer Magazine “Top 500 Guide” 14
Page 1 Updated 7/21/2011 Get the Facts!
Perception: “Products Are Too Expensive To Be Sold”
Facts:
• Amway ranked first in web sales in the Health & Beauty category by Internet Retailer
• Magazine for six consecutive years 24
• Amway ranked 28th among all e-commerce retail sites by Internet Retailer Magazine 24
• NUTRILITE ® Daily Multivitamin costs only $3.75 A MONTH (when sold at Suggested Retail) and compared to ADVANCED FORMULA CENTRUM ® †*18 o Contains 50% more B1, B2, B12 o 200% more Vitamin K
• ARTISTRY ® TIME DEFIANCE ® Lifting Eye Crème (when sold at Suggested Retail) is less than half the cost of ESTEE LAUDER ® RE-NUTRIVE ® Intensive Lifting Eye Creme 16
• XS Energy Shot™ cost $2.85 each (when sold at Suggested Retail). The national average convenience store price for 5-HOUR ENERGY ® is $3.11 for their Berry flavor 17
• Many people turn to a cup of coffee to keep themselves going late in the day, and the $1.20 variety, not an El Grandiose, double-mocha with two shots of “who cares”. NUTRILITE Rhodiola 110 is less than $0.70 a tablet (when sold at Suggested Retail) and can help increase mental and physical performance.
• Is every Amway product the lowest cost on the market? No. But the primary measure of any product is value - do you get the benefit you pay for – and we believe our products offer extraordinary value. o If lowest price were the only criteria then the TOYOTA ® YARIS ® would outsell the TOYOTA ® CAMRY ® TOYOTA CAMRY 4-door sedan sells for $20,000 more than TOYOTA YARIS 4-door sedan 19,20
However, TOYOTA CAMRY outsells TOYOTA YARIS 5-to-121,22 o Both are dependable, comfortable, safe transportation. o Same manufacturer, so brand preference not a factor o Is the TOYOTA CAMRY too expensive to be sold? Obviously not.
• Amway is so confident in the value of the product for the money, that they extend a 180-day money back guarantee if a customer is not satisfied for any reason…. no questions asked. **
† Trademark: Advanced Formula Centrum (Wyeth Holdings Corp., Madison N.J.) * Advanced Formula Centrum also contains a phosphorous content of 109mg. ** (NOTE: Specific limited guarantees apply to designated products). This satisfaction guarantee does not apply to Partner Store purchases or IBO purchased for stock, inventory, or product kits.
Page 2 Updated 7/21/2011 Get the Facts!
Perception: “It’s a Scam”
Facts:
• Amway is a global leader in the $102 billion direct selling industry. o More than three million AMWAY™ Distributors o More than 80 countries and territories around the world 41
• Amway has been in business for 50 years o Only 29% of small employer firms survives 10 years 38 o Thousands of firms have begun in this industry since 1959 - only 50 direct selling companies have survived 10 years and are still around today 28
• Globally today, eight people start an AMWAY business every minute - 24/7/365 30 o In the U.S. alone, someone starts an AMWAY™ business every 2 minutes 31
• In 2008, Amway had 7.9 billion dollars of direct selling revenue globally – up nearly 15% from last year 23 (during a severe world-wide recession)
• Alticor is the 44th largest privately held company in the U.S. according to Forbes magazine 32 o In the same rankings neighborhood as MENARDS ® and HILTON ® Hotels 32
• Amway is not dependent on credit or the whims of the stock market 34
• Amway is ranked as the third favorite foreign company in Korea (beaten only by McDONALD’S ® and Carrefour [French: world’s largest hypermarket chain]) 35
• The AMWAY brand has been listed as one of China’s top consumer brands 36 o Of all consumer brands in any category (including Chinese), ranked 72nd Outranking companies such as NESTLE ®, APPLE ®, PANASONIC ®, TOSHIBA ®, and WHIRLPOOL ® 36
• “Alticor is one of our nation’s pillars, advancing important social and economic goals in communities across the country” Suzanne Clark, U.S Chamber of Commerce Executive Vice President and COO 37
Page 3 Updated 7/21/2011 Get the Facts!
Perception: “But Is the Product Any Good?”
Facts:
• Amway operates 65 Research and Development laboratories worldwide 27 , staffed by more than 500 scientists, engineers, and technical professionals 39 o 800 patents 39 , 500 additional patents-pending 41
• Each year Amway produces 150 million units of cosmetics 27 , 10 billion tablets, capsules and softgels 41 and 75 million units of soap, detergents, and cleansers. 27
• NUTRILITE ® 27 o NUTRILITE ® brand is the world’s leading brand of vitamin, mineral, and dietary supplements, according to 2008 sales figures
o In 2008, sales of NUTRILITE products worldwide reached a record $3.1 billion
o More than 75 years ago, Nutrilite founder Carl Rehnborg created the first multivitamin/ multimineral supplement sold in North America
o NUTRILITE is the only global vitamin and mineral brand to grow, harvest, and process plants on self-owned certified organic farms
o Scientists for the NUTRILITE brand are at the forefront of a new scientific discipline called nutrigenomics, the study of how our genes interact with nutrients.
o The Nutrilite Health Institute Scientific Advisory Board, a worldwide group of leading nutrition, health, and genetics scientists, helps guide the future of the NUTRILITE brand
• ARTISTRY ® o The ARTISTRY brand is one of the world’s top five largest-selling prestige brands of facial skin care and color cosmetics. (based on 2007 global retail sales) 39
o ARTISTRY TIME DEFIANCE ® age-defying products are designed to help prevent the visible signs of premature aging, before they appear, and help reverse preexisting environmental damage that can cause the skin to age prematurely 41
• It takes almost sixteen of THE SHARPER IMAGE ® IONIC BREEZE ® units (15.6 units) to clean the area of one ATMOSPHERE ® Air Purifier – and with far less effectiveness and efficiency 49
• In Europe, Amway sells more point-of-use water filtration systems (Amway’s eSpring ® Water Purifier) than any other competitor 27 o The August 2009 issue of a leading consumer magazine features eSpring in their Best Buy section
• Coming Soon – easy-to-use genetic tests 50 to: o Identify the best diet and exercise level to most efficiently help you lose body fat o Learn about predisposition to heart disease base on inflammation
Page 4 Updated 7/21/2011 Get the Facts!
Perception: “If It’s So Great, Why Don’t People Stay?”
Facts:
• Over 120,000 IBOs in North America have been onboard for more than 10 years 51
• Running any business of your own is hard work and has risks o 50% of new small businesses with employees do not survive 5 years 38 (no statistics are kept on single-person companies)
• One of the appeals of a business like that offered by Amway is that you don’t have to have a college degree or have previous experience or have a lot of upfront money or pass a test in order to succeed.
• But the ease of entry also attracts a lot of people who would like to see their life unfold differently as long as that doesn’t require them to change anything o Think of all the people who make a New Year’s resolution to faithfully go to the gym in the coming year in order to get into better shape o Some succeed and whether they lose 2 or 200 pounds they are better off for the attempt o But then think of all the empty machines at the gym in March when most of members are back on the couch o They really meant to follow through when they made the resolution, but something distracted them (life, lack of willpower, etc) o Is the gym at fault for their choices?
• Why do people get frustrated (and quit) learning to play an instrument or speak a new language or play a new sport? o Because each requires learning a new skill. There is the need for knowledge, practice, execution, evaluation, more knowledge, and so on. o Wouldn’t it be great to be able to watch a DVD on Tiger Woods’ swing mechanics and be able to go to the golf course and shoot under par? That’s not how you develop a skill. o Running your own business is a new skill for most of us. However, in an instant gratification society, many people just want to watch that DVD, even though the training and support to develop a new skill are readily available.
• Studies have shown that in a sizeable percentage of small businesses that close, the decision was not prompted by bad economics 40 o Divorce o Poor Health o Unwillingness to continue the time commitment o Retirement o Have taken the proceeds from one business to start or join another business o Amway Leaders are no different
Page 5 Updated 7/21/2011 Get the Facts!
Perception: “Only a Very Few People Make Any Money”
Facts:
• Globally, Amway has paid distributors more performance-driven bonuses than any other direct- selling company in history 27
• Amway has paid out 25 billion dollars in Performance Bonuses to date 39 o Amway has never missed paying a bonus in its 50 year history 27
o Amway has paid out over 2.2 billion dollars in Performance Bonuses over the last 10 years alone 25 . And that does not include all the available retail margin that IBOs can get when selling product. A majority of the 2.2 Billion went to IBOs who have not yet reached the 25% (leadership) Performance Bonus level And almost all of the rest went to the very first level of recognized leadership (Platinum).
• When an IBO reaches the 25% Gross Group Performance Bonus level (Platinum), they may qualify for other monthly and annual leadership bonuses and other cash awards and business incentives.
• For every ARTISTRY ® and NUTRILITE ® branded product sold at suggested retail (excluding NUTRILITE ® beverages), over 50% of the suggested retail selling price stays with IBOs in the field. *
• Many of those who are counted as “active” in Amway literature are content to limit their activity to selling product to one or two of their friends and family. That’s okay. There are no quotas, no inventory requirements…. IBOs are free to build their business as large OR AS SMALL as they wish.
* Amway distributes to IBOs Performance Bonuses equal to 25% of the BV sold as well as the 35% available retail margin to the selling IBO when sold at suggested retail.
Page 6 Updated 7/21/2011 Get the Facts!
Perception: “They Are Just Out For Themselves”
Facts:
• Throughout our 50-year history, Amway employees and Distributors have shared more than $325 million with non-profit organizations around the world 33
• Amway Hong Kong, Amway Mexico, Amway Russia, Amway China, Amway Korea, and Amway Turkey all received prestigious awards for work with non-profit organizations in 2008 23
• Distributors in China, Europe, India, and Japan have won citizenship awards 23
• In it’s sixth year, AMWAY ONE BY ONE CAMPAIGN FOR CHILDREN ® has: 42 o Reached 6 million children o Donated one million employee and distributor hours o Donated more than $70 million dollars
• U.S. Chamber of Commerce Center for Corporate Citizenship presented Alticor with the Corporate Citizen Award for International Community Service in 2005 37
• Also in 2005, Alticor AMWAY ONE BY ONE ® recognized as Best Corporate Social Responsibility Program by the International Business Awards 43
• Amway formed partnership with the YMCA to help promote healthy lifestyle in North American families 23
• Since 2005, Amway has donated more than $2.4 million worth of product to the NBC’s Today Show Toy Drive 44
• Nutrilite is committed to building a healthy social environment around its many farms by providing farm employees with the opportunity for personal development, including education and training 45
Page 7 Updated 7/21/2011 Get the Facts!
Perception: “’Green’ is Just a Marketing Gimmick”
Facts:
• Even 50 years ago, Amway’s first home care products contained biodegradable cleaning ingredients that didn’t harm the environment 48
• Amway is part of the Environmental Protection Agency’s Climate Leader program 46
• Many of Amway’s cleaning products have been recognized by the EPA’s Design for the Environment program 47
• Amway is a participant in the International Association for Soaps, Detergents, and Maintenance Products Charter for Sustainable Cleaning. The goal is to be a trendsetter and role model for continual improvement in sustainability 47
• NUTRILITE ® is the only global vitamin and mineral brand to grow, harvest, and process plants on their certified organic farms using sustainable, chemical-free methods 45
• Amway received the prestigious United Nations Environmental Program Achievement Award 27
• Most of the bottles we manufacture use a level of post-consumer recycled HDPE resin that exceeds industry standards 48
• We actively participate in U.S. Environmental Protection Agency’s Green Lights Program for energy efficient lighting 48
• Amway recycles approximately 95% of recyclable waste produced at our manufacturing facility in Ada, Michigan 48
Page 8 Updated 7/21/2011 Get the Facts!
Perception: “That’s Old, I Saw It 15 Years Ago”
Facts:
What’s Changed
• In 1959, starting an AMWAY ® business meant loading up the trunk of your car with L.O.C. ® cleaner. In 2009, starting an AMWAY business means loading up your smart-phone, launching your own personal retail website, and tapping expanding markets in health and beauty.
• Amway ranked first in web sales in the Health & Beauty category by Internet Retailer Magazine for six consecutive years 24
• Amway ranked 28th among all e-commerce retail sites by Internet Retailer Magazine 24
• New product lines which include, among others: o ARTISTRY ® TIME DEFIANCE ® age-defying products are designed to help prevent the visible signs of premature aging, before they appear, and help reverse preexisting environmental damage that can cause the skin to age prematurely 41
o LEGACY OF CLEAN ™, a line of planet-positive products, so while you’re making things cleaner and brighter at home, you’re doing the same for the planet Many of the LEGACY OF CLEAN home care products have been recognized by the U.S. Environmental Protection Agency’s Design for the Environment program 47
o PERFECT EMPOWERED DRINKING WATER ® uses a unique 15-step purification process. Trace minerals and electrolytes are infused back in and it’s then enhanced with oxygen for water that would make Mother Nature jealous 52
o NUTRILITE ® Sports Nutrition products designed to energize your body, build strength, stay hydrated, recover quickly and perform at your peak 52
• Approximately 80% of Amway Exclusive products have had their suggested retail price lowered
• More merchandising support o Retail Selling System New, less expensive consumer catalogs New comprehensive Selling Guides
o Limited-life marketing campaigns Four months each Focus on a small number of seasonally-appropriate products Supported by specific marketing materials and special offers
• Free training on-line o Dozens of course including: Selling 101 ARTISTRY Application – applying flawless makeup Marketing Your Business
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• National Advertising o TV o Magazine o Radio
• Sponsorships and Spokespersons o Rock and Roll Marathon Series o Sports Ronaldinho – considered by many to be the world’s best soccer player Sanya Richards – Track sprinter, Gold & Bronze medal winner Jenn Stuczynski – Pole Vault, Silver medal winner San Jose Earthquakes, Men’s Major League Soccer L.A. Sol – Women’s Professional Soccer League o John Tesh and Connie Sellecca
• Professional Development Accreditation Program o Implement best practices for training and motivation o Promote business excellence by establishing solid professional development systems
What Hasn’t Changed
• Amway has never missed paying a bonus in its 50-year history 27 o Globally, Amway has paid distributors more performance-driven bonuses than any other direct-selling company in history 27
o Amway has paid out over 2.2 billion dollars in Performance Bonuses over the last 10 years alone 25 . And that does not include all the available retail margin that IBOs can get when selling product.
• • A business that stands for 51 : o Universal opportunity o Impressive ability for growth o Low initial start-up cost o Providing an avenue for success based on repeat business and long-term relationships o The perfect embodiment of free enterprise
• Business opportunity distinguished from all others 51 o Allowing fantastic income potential in the present o Ability to pass the business on to the next generation in the future In some cases the forth-generation continues to grow businesses started by their great- grandparents
• Time passes. People age. Worlds change. But values remain 51 o Family – a real connection with caring people invested in you success o Freedom – the opportunity remains open to anyone who wants to give it a try o Hope – every dream starts with the heartfelt desire to achieve something better in this life o Reward – success comes as confidence gained, lessons learned, skills acquired, travel experienced, recognition awarded, and money earned.
Page 10 Updated 7/21/2011 Get the Facts!
Index
Page 1: “MLMs / Amway Are Just Pyramids”
Page 2: “Products are Too Expensive to be Sold”
Page 3: “It’s a Scam”
Page 4: "But Is the Product Any Good?”
Page 5: “If It’s So Great, Why Don’t People Stay?”
Page 6: “Only a Very Few People Make Any Money”
Page 7: “They Are Just Out for Themselves”
Page 8: “’Green’ is Just a Marketing Gimmick”
Page 9: “That’s Old, I Saw It 15 Years Ago”
Page 11 Updated 7/21/2011 Get the Facts!
Footnotes: 1 Frequently Asked Questions, Small Business Administration Office of Advocacy, September 2008 2 “Buffett world’s richest man”, www.reuters.com, May 5, 2008 3 “Berkshire Hathaway to Acquire The Pampered Chef”, www.berkshirehathaway.com , September 23, 2002 4 “Citigroups Primerica is Said to Seek Bids:, www.bloomberg.com , May 13, 2009 5 “Time Inc. to Sell Southern Living at Home”, www.timewarner.com, January 21, 2009 6 Home Page, www.booksarefun.com , August 18, 2009 7 www.thebodyshopathome.com , August 18, 2009 8 “Big Yellow Box by Crayola”, www.crayola.com , August 18, 2009 9 www.dsa.org/pubs/numbers , November 16, 2009 10 www.dsa.org/aboutselling/benefits , November 4, 2009 11 “Pyramid Schemes”, Debra A. Valentine, General Counsel for the U.S. FTC, May 13, 1998 12 www.dsa.org/aboutselling/consumer , November 4, 2009 13 Euromonitor study of 2007 global retail sales. Others in this distinguished group include Clinique ®, Estee Lauder ®, Lancome ®, and Shiseido ® 14 www.amway.com/whatsnew , October 30, 2009 15 www.alticor.com/resource-center, November 16, 2009 16 www.nordstrom.com , November 8, 2009 17 Information from Neilsen Data, June 2009 18 www.amway.com > nutrilite > vitamins and minerals > daily, November 16, 2009 19 www.cars.about.com/od/helpforcarbuyers/tp/Cheapest_09 , October 30, 2009 20 www.truedelta.com/comparisons1/Fusion-vs-Camry-price-comparison.php, October 29, 2009 21 “Top 10 Best-Selling Cars in June 2009”, www.thetorquereport.com, November 9, 2009 22 “June 09 Hybrid and Fuel Efficient Non-hybrid Sales”, www.cleanmpg.com, October 31, 2009 23 Amway Year in Review 2008 24 “Amway Global #1 in Online Health and Beauty Sales”, www.amwaynews.com, November 9, 2009 25 “QUIXTAR Business Opportunity Brochure”, LA3289A, 2007 27 “Fifty Facts, 50 Years”, www.amway.com.au , November 16, 2009 28 “The Top 25 Network Marketing Companies”, Michael Clouse, www.nexera.com, July 8, 2009 30 “The AMWAY Business Opportunity Brochure”, LA3289E, 2009 31 Amway Business Intelligence Statistics 32 “America’s Largest Private Companies”, www.forbes.com, November 9, 2009 33 www.amway.com/en/about-amway/making-difference, October 28, 2009 34 Thai Press Reports, October 10, 2008 35 “McDonalds Rates Number One Among Consumers”, www.english.chosun.com, November 9, 2009 36 “CLSA launches inaugural China Brands Index”, www.clsa.com, September 17, 2009 37 “Alticor, Inc. Wins Corporate Citizenship Award”, news release, www.uschamber.com, November 9, 2005 38 “Startup Failure Rates – The REAL Numbers”, Scott Shane, www.smallbiztrends.com, April 28, 2008 39 “The AMWAY Business Opportunity Brochure”, LA3289E, 2009 40 “Focus on Success, Not Failure”, Rhonda Abrams, www.usatoday.com/money/smallbusiness, October 18, 2009 41 www.alticor.com/resource-center, November 16, 2009 42 “AMWAY ONE BY ONE CAMPAIGN FOR CHILDREN reaches 6 million children in 5 years”, Amway News Release, February 11, 2009 43 “Alticor’s One by One wins International Business Award”, Alticor News Release, April 27, 2005 44 www.thisbiznow.com, October 28, 2009 45 www.nutrilite.com/en-us/Nature/WhyNutrilite/farms, November 10, 2009 46 www.epa.gov/climateleaders/partners/partners/alticorinc, November 10, 2009 47 “LEGACY OF CLEAN™ L.O.C. ® Multi-Purpose Cleaner”, www.amway.com/products, November 10, 2009 48 “Alticor and the Environment”, www.alticor.com, November 10, 2009 49 www.amway.com > atmosphere, November 16, 2009 50 “Optimal Health Catalog - Fall 2009”, SA-1639, November 16, 2009 51 ACHIEVE ®, Volume 2, Issue 3, 2009 52 Optimal Health Catalog, SA-1639, Fall 2009 – Winter 2010
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