AMWAY’S REBUTTAL
AND
OUR RESPONSE

    In their rebuttal, Amway had extracted a few words instead of the entire para. For this rebuttal to be read in the proper context, you will need to read the story again. Because we cannot either link or reproduce the entire paragraph/s in question, we give their rebuttal in full, with Ramjee Chandran's comments in bold text, following each para of rebuttal. The rebuttal has not been edited. (Any typos are inadvertent).
    Multi Level Marketing is not network selling, pyramid selling, a chain of letter of a lottery ticket. Multi Level Marketing companies sell products through independent distributors as an alternative to the traditional approach of hiring staff, advertising etc. distributors in turn train new distributors to expand the marketing network, offering personal service and demonstrating products to consumers on an individual basis. Amway has been endorsed by US Federal Trade Commission. It has been acknowledged by govts. across the world as a role model of Multi Level Marketing. The hallmarks of a Multi Level business like Amway are: Equal opportunity, irrespective of when you join; distributorships are not for sale; product training provided by the company; no need to maintain inventories; low start-up costs; pay only on product sales in direct proportion to effort; buy back both stock & sales kits; success earned by repeatedly retailing products to consumers, sponsoring others to do the same; Offer international quality products; Follow World Federation of Direct Selling Associations (WFDSA) Code of Conduct. In sharp contrast, pyramid schemes: Offer unequal opportunity; Sell distributorship; require large inventory purchases; involve high initial costs; pay for recruiting; don’t buy back stock or sales kits; solicit people to buy success by buying inventories/titles; offer questionable products; will collapse when no more people can be lured.
    A brochure from their local office says their scheme is ‘network selling’. Not explained: The basis of the pending lawsuit against Amway in the US? (Source: “The Advocate.”)
    In Multi Level Marketing business like Amway, there is no top/bottom. Performance alone dictates distributor status. “working hard” is not just sponsoring new distributors. It is that + selling products. The article itself says “the lower the quantity of purchase, the lower your commission”.
    Most salespersons in the city say that if you sign up you don’t really need to sell soap. Not answered: My earlier question to explain the criterion to determine minimum sales to avoid becoming a pyramid.
    Success depends on performance, on sponsoring and retailing. On people helping others help themselves. The opportunity is equal for all. But as in any human endeavour, there will be success and failure.
    They have only repeated what I have said. Not answered: Why do they take capital deposits from everybody?
    An Amway Distributor can sponsor people anywhere in India/the world. He/She is not limited to one city.
    Not answered: Except for the very rich, who can do this?
    Amway has made no such comment. Chance to make money depends on entrepreneurial drive, personal skills/ability and initiative. Amway offers an opportunity to be exploited. It is up to the individual to chart own course.
    Is the Amway GM now denying that he told me the max. no. of distributors would grow to around 10,000? Not answered: By how much will the 9-6-3 scheme grow from the present level of 6,500 salespersons?
    The Rs 4200/- charged for every Business Kit covers a variety of costs: the products, dispensers, forms. literature, business newsgrams, Amagrams, training programmes, subscription cost for 18 months. Production & mailing of monthly statements, courier of cheques. Amway has already invested over US$ 25 million in India and is scheduled to invest US$ 20 million more. Money has gone into setting up 3 local manufacturing facilities with state-of-the-art technology. Hiring a staff of over 200, operating in 5 metros, servicing 150 towns, sponsoring community development programmes .
    Any marketing company has these expenses. Which other company takes money for stationery?
    All Multi Level Marketing companies sell business opportunities to distributors unlike companies, which merely offer employment. Amway salespeople are not employees. They are independent entrepreneurs. Multi Level Marketing companies like Amway appoint Distributors who sell through a network of people they know on a personal basis.
    Specious argument. The comparison with corporations was from Amway salespeople. Not answered: How exactly is retail sales encouraged?
    This is an unfair and incorrect assumption. Over 3 million distributors and 450 products are proof of the viability of the Amway business. The majority of Amway distributors sell products.
    I maintain that if they say “only a few will succeed”, it means that “most will fail”. Not answered: Will Amway make public its ratio of ‘directs’ to total numbers of distributors?
    This is a wrong allegation. All Amway distributors are explained the business opportunity; they set their own goals, decide their own workplans and reap benefits on that basis. No one is promised millionaire status, everyone is appraised of the business potential and the way it operates.
    It was no mere allegation. I repeated exactly what I heard. But Amway distributors said materially different things to me and since they are the people talking to prospects and that is mainly how the scheme gets explained. This is the dissonance I imagine is convenient to Amway.
    All Amway Distributors are accountable to the company. They are mature, responsible, trained adults. At the time of adopting the Amway opportunity, they sign and agree to abide by our rules of conduct and code of ethics. Rules are enforced by a variety of measures, upto and including, termination of the Distributorship. Amway’s Rules of Conduct are aligned with WFDSA Code. Amway is a founder member of the Indian Direct Selling Association (IDSA). One of the IDSA’s objectives is to “Protect and promote the interests of consumers”. The IDSA has appointed Justice Rege of the Bombay High Court as its Ombudsman & Code Administrator.
    Not answered at all: Does Amway have a mechanism to monitor and enforce the ‘Code of Ethics’? One ombudsman will do all that?
    Amway is a serious, viable business opportunity. The Amway business plan has evolved over 35 years and the Amway sales & marketing plan has revolutionised the direct selling industry since 1959. The essential attributes of an Amway distributor are an entrepreneurial spirit and a desire to work hard towards achieving goals. Prospective distributors are encouraged to make an informed choice before entering the business. (Emphasis ours). Distributors enjoy a high degree of support from the company as well as their sponsors. In addition distributor interests are safeguarded at all times. Those wishing to discontinue their relationship with Amway, can do so at any time. If this is done within a 90 say period from the date of joining, they receive a refund on the investment of Rs. 4200/-. It is easy to get in/get out of the Amway business. The Amway business opportunity offers maximum flexibility to distributors.
    Who encourages prospects to “make an informed decision?” Not their distributors from what I witnessed and heard from first-hand sources. Then why did hundreds of people call to say that they had not been told what I had written in my article?
    To buy or not to buy a product is a matter of individual choice. How can purchase of a particular product prejudice personal choice? On the contrary one prefers one product over the other by exercising personal choice.
    Once someone has paid a hefty capital deposit, will he/she buy a product other than from Amway?
    This statement contradicts the one made earlier “...the only way to succeed is to make vast numbers of people use the products for themselves.” An Amway distributor has to sell. It is incorrect to imagine that a company as large, and as diversified as Amway, could sustain itself for almost 40 years, operate in more than 80 countries, match stringent and diverse government regulations, sustain over 13,000 employees, invest in over 450 products, and progress in its career without a strong accent on sales.
    I have not denied that Amway Co. will be profitable. In fact, it is on that very basis that I made the statement that the fortunes of Amway, and the few distributors who make it, are at the expense of the many who might not. Amway’s statement is not a rebuttal. It is a confirmation of my stand. I must thank Amway for this.
    Amway is a people centered business which touches millions across the globe everyday. Yet our company and the industry are not fully understood. Whilst we are supporters of expression, we are anxious to see the same standards that society applies to other media, applicable to the Internet as well. The Internet remains an open platform, which is often misused to address personal agendas. If an individual is serious about forming an opinion independently, and not being fed on other’s interpretations he/she should also visit the Amway sites on the Internet. The Amway Global site can be accessed at www.amway.com. This will present Amway’s perspective.
    Clearly, what I asked readers to do would lead them to the Amway site. After so many years and “touching so many people” (an expression which I consider apt), if they are still so misunderstood, it tells you something about the dissonance.
    Amway products are not expensive. All Amway products are defined by their highly concentrated formulation and multi-purpose usage, which promises value-for-money, the high quality standards of Amway products exceed consumer expectations. Comparable products do not exist in India. The comparison is meaningless. Besides world class quality, another unique feature of Amway products, which no company in India offers, is a customer refund policy. An example of Amway’s customer service is that all products are delivered and demonstrated in the comfort of their homes.
    Comparable products do not exist in India? Is a 250 ml shampoo for Rs 315 “not expensive?” And "Comparable products do not exist in India" ... is this some commercial arrogance?