Swell of marketers sweeps globe

By IRENE CHAPPLE

Getting an interview with Amway executive Doug DeVos is a serious business.

"The family all travel with bodyguards," says his public relations representative. "Given recent events in America, security will be very tight."

Mr DeVos' father, Amway co-founder Richard DeVos, is worth $US1.7 billion ($4 billion) and ranked the 124th richest man in America, says Forbes magazine.

But they always get it wrong, says Mr DeVos jun, who has no idea of his family's exact worth.

On this sweaty Auckland day, the DeVos scion is found in the bowels of Amway's tinted black glass New Zealand headquarters. He is here to open a new call centre.

The security cannot be seen, just a bevy of followers with nametags and staff with baggy company T-shirts.

The call centre, employing 60 people fulltime, will service Australia and New Zealand.

Amway's direct-selling business is undoubtedly a marketing phenomenon. Formed in 1959 by childhood friends Mr DeVos sen and Jan Van Andel, Amway - shortened from the American Way - started with one product, an all-purpose cleaner called LOC, or Liquid Organic Cleaner, sold from their home basements.

In 1960, the company moved to Ada, Michigan, where its headquarters remain, but now stretch for 1.5km.

Amway opened its Canadian affiliate in 1962, and by the following year, sales were 12 times the first-year figures.

By its fifth year of operation the company employed 500 people, had a sales force of 65,000 and was signing up about 8000 distributors a month.

The product line expanded and Amway went global. More than three million distributors now market over 400 products in 80 countries.

In 1985, Amway was established in New Zealand, where there are now 18,000 Independent Business Owners - the name given to Amway distributors.

Worldwide sales have passed $US5 billion - a remarkable success story. But surf the internet for the Amway name and you find bizarre allegations and ravings.

Mr DeVos jun has heard them all, and is comfortable talking about it.

He is a personable man who shakes the watch on his wrist, pulls at his socks and drinks Coke throughout the interview.

Growing up as a DeVos, he says, was a largely normal childhood.

While the household was soaked in the company's products - "I find it hard to believe anyone would use anything but Amway" - conversation around the dinner table was standard.

"Have you eaten your vegetables, have you done your homework, and kids, stop fighting."

Standard stuff, says Mr DeVos, because money did not make a difference.

The success of Amway comes from what the organisation stands for, he says.

His deeply religious family - Mr DeVos jun attends the Christian Reformed Church once a week - espouses freedom. Amway also pushes its themes of family, hope for the future and reward.

While the religious beliefs of the family are well-known, as are their political leanings - they have given millions to the Republican Party - Mr DeVos jun says Amway is not a political or religious organisation.

Yes, he agrees, these aspects may attract people and can give them a sense of security in relating to similar people.

But within the boundaries of the organisation, Amway pushes the independence it gives to distributors.

They buy an introductory pack - about $100 - and then sell products at a price they set.

By recruiting, or sponsoring, more distributors, they gain bonuses. Some do it door-to-door, but usually the recruits are friends and acquaintances.

This attracts accusations of pyramid selling, which is illegal in New Zealand and many other countries.

Absolutely not, says Mr DeVos.

He categorises the three signs of pyramid schemes: "If I sponsor you, and there was a headhunting fee; if you are asked to buy lots of inventory, say $5000 or $10,000 worth; if there is no refund policy."

Amway does none of the above. Money is made off sales of the products only and refunds are provided.

A 1998 ban on direct marketing in China suspended sales for three months, says Mr DeVos.

Amway rivals Mary Kay and Avon were also caught out.

Rejigging their operations was expensive, says Mr DeVos. Amway products are now sold in China through retail outlets.

The World Trade Organisation, which China has just joined, has a proviso for direct-marketing legislation, which could mean the return of Amway's usual style of marketing, says Mr DeVos.

He recognises that distributors will sometimes play down the Amway name.

"People would start to tell you about a business opportunity, and others would say, 'Is it Amway?'

"They would go, 'No, it's not Amway'."

Mr DeVos is mystified by the reaction.

"When people won't talk about what their business is, that's troubling to us.

"This has plagued us ... People have not been upfront.

"We are addressing it - we want people to be proud of our name," he says.

There was a rash of lawsuits in the mid-1980s involving misleading practices, says Mr DeVos, but many of the issues have now been dealt with.

And Americans are prone to lawsuits, he says.

Amway deals with unconscionable distributors by terminating their connection.

"While hundreds of distributors have suffered this fate, in the larger scheme, it is less than 1 per cent of the total number of Amway distributors.

But, says Mr DeVos, "we are accountable to the perceptions and we will deal with them."

The continuing Procter & Gamble saga is surely an albatross around the company's neck?

Yes, laughs Mr DeVos, offering to talk for hours about it.

In brief, the competing company has sued Amway repeatedly, accusing it of spreading rumours that it has connections to Satan.

According to an Associated Press report, federal court cases in Utah, Texas and Michigan have generated more than two million pages of documents.

Amway has largely come out the winner, he says.

At other times the issue has been thrown out of court.

The company is also suing Procter & Gamble on another issue that Mr DeVos does not want to specify.

But he will confirm it is not a retaliatory suit. It concerns Procter & Gamble's behaviour, he says.

Mr DeVos would undoubtedly have encouraged the recruitment of more distributors on his visit here.

Likeable, charismatic without being over the top, he is a proponent of the American Way.