Amway Controversies till now.
1990
Sidney Schwartz
Before 1996, Schwartz built a website named "
Amway: The Untold Story." He did this to highlight some of the difficulties he saw in the Amway industry. Mostly, these were tool-related problems. Even while the goal was plainly anti-Amway, the debate quickly degraded into criticism of Schwartz, who differed with any number of senior pins and others.
Amway does not like its name being dragged through the dirt.
Amway also filed three subpoenas, and Schwartz was named as a defendant in a lawsuit. Schwartz then chose to discontinue his website in 1999. His ingenious marketing approach was to say that he, like a tiny person, could not stand up to the large, deep-pocketed firm.
Many sectors of the online community interpreted the firm closing the little man as repression of free expression. Thus, before he removed his own website, it was mirrored throughout the globe at numerous different locations. Thus keeping the website alive.
Proctor & Gamble
P & G sued Randy & Valorie, and others for using urban legend that they were participating in satanic worship, as detailed here. It seems like the 12-year judicial struggle is almost at an end.
Amway no longer has any connection to Randy and Haugen.
Amway Korea
SEOUL, South Korea: This year, American detergent producer
Amway Corporation has seen a steep 64% fall in sales in South Korea, the country's third-largest market.
70,000 of Amway's 140,000 distributors have decided to cease selling
Amway detergents and cosmetics in August, says the 55-year-old head of Amway's Korean unit, Brian Chalmers.
For a multitude of reasons, which include, but are not limited to, cultural land mines and informal trade obstacles, it's difficult for many international enterprises to succeed in the Korean market. All of the necessary parts are in place, but it simply doesn't seem to work out.
Allegations About Dish Drops
Dish Drops detergent is the core of the battle against
Amway, which is located in Ada, Michigan.
In March, 82 consumer and environmental organizations banded together to join the Anti-Amway Committee and launched a broad attack against Amway. The advocacy organizations argue that
Amway is misrepresenting the items as ecologically beneficial. They claim that Dish Drop's biodegradability is behind that of Korean goods.
Consumer advocacy organizations allege that
Amway is overcharging Korean consumers for Dish Drops, which they say is 2-3 times more costly than local options. the consumer organizations allege that Amway's distributors are doing unlawful comparison testing with Korean-made items to advertise their offerings
Former general secretary of the National Council of Consumer Protection Organizations, You Jin Hee, states, "Amway is not a moral corporation." They have an improper marketing mentality.
South Korean culture is frequently faulted for helping
Amway marketers make money through intimate relations between friends and neighbors. Korean environmentalist Choi Yul describes
Amway as "disrupting neighborhoods and religious congregations, and a problem to society as a whole."
Most of the organizations are privately financed, however, the National Council of Consumer Protection Organizations gets some money from South Korea's Ministry of Finance and Economy. The National Council asserts that no public monies have been utilized in the anti-Amway campaign. The government has denied involvement in the consumer advocacy group's actions.
The Korean Soap and Detergent Association, a trade association for local manufacturers, publicly aired advertising praising the allegations of the consumer organizations. Ads made additional charges, such as that
Amway is a major cause of South Korea's trade imbalance. Less than one-tenth of 1% of South Korea's overall imports,
Amway imported around $125 million in products into the nation in 1996. We won't be commenting on our behavior.
Amway claims the accusations are untrue. Dish Drops' biodegradability test is meaningless since the soap tested was found to be nonbiodegradable after just one and two days of testing, instead of the eight-day requirement. The consumer organizations have challenged this, arguing that since "streams in Korea are shorter," detergents need to be biodegraded more rapidly. Previous research done by a consumer advocacy organization claims that Dish Drops is environmentally friendly in Korea.
Dish Drops detergent is affordable provided the client dilutes the concentrated soap as suggested on the packaging, says Mr. Chalmers. The consumer organizations rejected
Amway's directions for utilizing the concentrate, and this led them to assume the product was overpriced.
Sorry demand rejected
According to Mr. Chalmers, a handful of his distributors did comparison tests, which are unlawful in South Korea, but distributors are not told to avoid these tests, and those who are detected are fired.
Mr. Chalmers did not apologize to the Anti-Amway Committee. "It simply isn't in me," he adds.
Without offering an apology, the consumer advocacy organizations boycotted Dish Drops in June. They put posters at bus and subway stations that say, "Everything was fabricated. Passing out leaflets that said, "Amway is the wrong way! Leave!"
The advertising greatly impacted Amway's clients. Myung Ja Suh, a 42-year-old housewife, has purchased Dish Drops for years. However, as she read media headlines regarding customer concerns, she stopped purchasing the product. People thought I was crazy if I purchased from
Amway, she adds.
Very Difficult Business
Since they started in 1991,
Amway has faced obstacles in South Korea. When David Ussery, the manager of Amway's operations in Korea, was accused of breaking a law in 1993, he spent nine days in prison. In his cell, Mr. Ussery's hands were often bound with rope. The verdict came in, and
Amway was fined $100,000. Mr. Ussery has said that he is not furious with anybody. In Korea, doing business is very difficult.
Unlike most Western businesses, Mr. Chalmers had boxing gloves on when he faced the challenge in Korea. Amway's successes drive the consumer organizations' criticism. Dish Drops late last year claimed a share of the local market for dish detergent between 10% and 15%. It's a market-share concern, Mr. Chalmers asserts.
In April, he started an advertising campaign to rebut the claims of the Korea Soap and Detergent Association and filed a complaint with the Fair Trade Commission, a government organization that governs market practices. The organization then filed a countercomplaint against
Amway. No official judgment has been issued.
Prohibited Testing Began
Amway also sued shops that were offering comparative-testing equipment kits to
Amway marketers. In order to comply with the testing restrictions of Korea, the equipment is given by
Amway for Korean distributors but is not used in Korea. The merchants imported the kits, sold them under the
Amway trademark, and utilized the kits to perform the forbidden tests regardless of Amway's intentions. Amway filed suit against the stores and all were shut down.
With improved training, Mr. Chalmers seeks to prevent future scuffles with consumer organizations. Free training videos and worksheets are a good idea. Additionally, he's contemplating working with a customer advocate to strengthen his relationships.
Chalmers attributes his daily headaches to Amway's continued success in Korea. By the time Amway introduces the 100 goods it offers in Korea, his new vitamin launch will be in December. "The sky's the limit in this market," he adds.
1980s Amway Controversies
Canadian Case
The Canadian case was tried in 1983. Understanding the matter requires that an understanding of the company's history be obtained. The Amway Export Company was created in 1962 as two different entities. Amway Manufacturing Corporation and Amway Sales Corporation. Essentially, production dealt with manufacture, while sales handled the distribution of the products to distributors. In 1964, these two enterprises were united into one firm.
However, duty was established at a wholesale level upon export. Since the items were sold to the Amway Sales Corporation in Canada, Despite the merger, the number of sales was decided at the retail level, not the wholesale level. However, this practice meant that Amway of Canada would not be profitable. This means that Amway Canada will have to purchase the items wholesale and pay a higher rate of import tax. The main sticking issue is the sliding scale of discount to the wholesalers. Amway said that the distributor discount varied from that asserted by the Canadian government. This was the main difficulty.
the warehouses were constructed using paper as a basis Being completely dominated by Amway. Criminal charges were brought against Amway executives and cooperatives in Canada in 1983. As a result, the Canadian government began the process of extrication. However, individuals signed a plea deal where charges would be withdrawn if the firms pled guilty, which they did.
one of their court filings explains Amway's approach best: "Company policy was to exclusively sell products to Direct Distributors, applying a sliding scale of discounts or setting the price. Amway thought that the Customer Action didn't "fit"... this revolutionary direct sales approach. Since the company, Amway, believes this to be a reasonable transfer price, but not sold to the public, it does not conform with the Amway Income Protection Act. Over time, sales of Amway of Canada Limited expanded substantially and the little issue became a huge one. prevented ourselves and the firms from engaging in a strategy that was in violation of the law "paraphrase: simplified (Ragin v. Amway, 1983, Exhibit 2).
The court ordered Amway to pay C$148 million in consumer duties, taxes, and penalties. Amway challenged the number of tariffs, taxes, and penalties. To return to court. A Canadian court decided in 1989 that Amway had to pay C$45 million. Amway had sued again in 1996, claiming $25 million in taxes was owed on the penalties. The Canadian government successfully contended that penalties paid for tax evasion were not deductible.
Directly Speaking
We used cassettes to distribute information to a wider audience in the early 1980s. And Amway distributors often listened to them on a regular basis. Diamond and above in the US market received a recording titled Directly Speaking in 1983.
This recording was created for a 60 minutes documentary that was like any decent TV documentary. Rich wanted to make sure Amway maintained a great reputation in the industry. And, to ensure everything was done correctly, he created ten assertions to make sure that everything was done correctly:
Line of Sponsorship [LOS] Only deal with your team and stay away from other teams. Today, this is known as "no cross-lining." It is an almost sacred thing.
Only materials authorized by Amway are to be used. They did not believe in wild income-earning promises anymore
Regardless of whether they acquire cassettes, you should engage with any distributor. wealthy countries "Sponsors must train, inspire, and provide their staff. That's because you're the sponsor; not whether they purchase whatever additional you've chosen to provide."
4. Professional Development Programs are optional "Tapes, books, and rallies are always offered on a voluntary basis. None of the standard terms. Forcibly would be instances of... If you're not a subscriber, then I can't work with you.
To employ the curiosity method, it must be done correctly. "Tell them they're at a business-type opportunity meeting. No telling anybody it's a social gathering, a coffee, a religious event, a fund-raising event, or a how-to-save-money-on-taxes event. It's all a trick. You should inform them that it's a business opportunity meeting. It's Amway."
No distributor may create recordings concerning the strategy or the items. The strategy and the product are solely the responsibility of the corporation.
No hiding behind group names. that's nothing "X-Y-Z organization. We are not Amway."
Be respectful to others, and really care about them "aiming to prevent demotivation and/or put people down Winners and losers exist. Do you consider yourself a winner? Do you consider yourself a loser?" Insulting those who do not join up. The terrible phrase "We are the victors. The loser in life" They are not losers. Rich, fuller lives may be had by individuals who obtained nice automobiles and new outfits, or huge rings. You know, they've— Materialism doesn't affect our lives. The outcome is not decided. Life is too difficult for that. Everyone should feel like a winner, even if they have different aims."
Money is not the final goal. as already said "To keep things on the up and up, we will put aside money, but also consider our other values. Our company is here to assist all of our distributors regardless of their level."
and quoting extensively "No problem. I don't mind you getting what you pay for. In fact, I have a major issue with exhibiting an organization with no compassion for the poor, the hungry, or for what's happening in their neighborhood. We're going to convey the image of a corporation and individuals that care about others, no matter their socioeconomic status. While you may want to discreetly discuss your new automobiles or rings, you also discuss the excellent ideals that the Amway company delivers, such as the idea of being connected to kind, kind people.""
No extra product purchases. We're ordering huge amounts for pins or promotions. that is "you will not put more weight on someone else to win a pin or to earn a vacation; instead, they will, in fact, have not only purchased the Amway items but have, in turn, sold them and collected retail and the money."
These 10 ideas were about respecting and caring for others. Ensuring that the general public has everyone's best interests at heart. It is defined as a controversy, as Amway first acknowledged the existence of tool business concerns, and some persons engaged in less-than-honest business practices.
