The Amway Aftermath

    A few days ago, Noor Hussain Sait of Variety Book Stall told me that one Amway distributor had told him that I ‘hid’ the fact that people can get their money back from Amway.
    I wasn’t hiding it. I did not mention it because I thought that all prospects were informed about this.
I now find out that this is one valuable piece of information that several people, who had paid Rs. 4,200 to Amway, were not told or did not understand clearly.
    One lady, a beautician, said her sponsor had not told her this and she was livid. Two others lamented that their 90-day time limit had passed. (Many people also asked why I had not written the piece two months ago.)
    To set the record straight, I now give readers the information that they can get their money back from Amway.
    Steven Beddoe — Amway GM who had earlier called me from Delhi — said that (1) they will refund the entire amount within 90 days whether or not the products have been used; and (2) he also said that after 90 days, people can get back the Rs. 4,200 less 30% of the value of the products if returned within their shelf life.
    There it is. So, not to worry, you can get all or some of your money back any time you want before or after the 90 day limit according to Steven Beddoe.
    As soon as the June issue was released in the market, the phone started ringing. It almost did not stop. Most callers said that they were “saved” by the story and that it helped them clarify their arguments against people who were interested in signing them up as Amway salespersons. Some others seemed upset and a few threatened me with legal action and of course, violence.
    Simultaneously, the letters began pouring in. The sentiment was the same as the callers. We have printed only a selection of these letters. Some others will be printed in the next issue. I have printed ALL the pro-Amway letters received by the cut-off date against only a few of the anti-Amway letters. Everyday, the mail box (snail mail and e-mail) is inundated with letters.
    I have a request. Please don’t send me any more letters in response to the June cover story because we are a publication with modest resources and simply cannot handle the volume. However, my sincere thanks to all those who chose to respond, whether pro or anti.
    The most touching call I received (late one evening when I was alone in the office) was from one lady who broke down and wept on the phone. She said she felt that she had cheated her ‘downlines’ and said she couldn’t sleep. She said that she was going to sell some of her possessions to return their money. I told her there was no need to do that because Amway said they would return the money. I also explained to her that I did believe that neither Amway nor their salespeople were cheating anyone. My argument was simply that I believe that the Amway proposition works only for very few people and of course, for Amway themselves.
    Another call which disturbed me was from another lady who told me that an autorickshaw driver in her neighbourhood had become an Amway distributor. He had been signed up by a noted, upper class Bangalorean. Now, from our ‘Salaries’ story (May 1998), I learned that auto drivers earn around Rs. 2,500 a month if they are lucky. I wonder if this guy pawned something to pay Amway Rs. 4,200. Apparently, he was telling people that he would soon be making Rs. 40,000 a month. This time, it was I who nearly broke down and wept.
    Another set of responses talked of companies like Green Gold, Japan Life and others who, they say, run operations similar to Amway. We are investigating these.
    Meanwhile, Amway wrote to me. I replied to them. I have not printed their covering letter, nor my reply, for want of space and for fear of repetition. However, I have printed their rebuttal in full, unedited, and with my comments. (Read it with a copy of the previous issue.)
    Readers will notice that Amway have failed to answer my mathematical arguments. Simply, if the growth of the numbers of distributors is as small as Amway said it would be, how will the new entrants make money without signing up more people? And from where will they sign them up?
    The story is far from done.
From the incredible responses I have received from all over India and abroad, the USA mainly, there are a few more aspects of the operations that have cropped up. I will soon start to work on these and when my research is complete, you’ll read it.
    Notably, The Advocate newspaper in the USA reported that Procter & Gamble have filed a suit against Amway for running a pyramid scheme. The case, I understand, is still in court.
    The essence of a pyramid scheme, as I understand it, is that the operation should not develop only on the basis of signing up fees. Then this becomes a simple money chain. In order not to be a pyramid, Amway distributors must actually sell products to non-Amway people.
    I raised a challenge to Amway in my last story to produce the details of sales of products ... obviously, other than those sold with the business kit.
    My words were “I challenge Amway to draw a correlation between the money taken from sign-ups and the volume of products they have moved through retail sales.”
    Amway have not responded to this challenge or mentioned it in their rebuttal.
    I again request Amway to make this information available. Even some of their distributors have asked me to raise this. I also request them to answer the questions I have raised in my subsequent letter. More on that as it develops.
    Meanwhile, all I can say to my readers is a heartfelt “Thank you.”