Amway takes off

Direct-selling company Amway Phils. LLC celebrates its fifth year in business this week with great optimism.

"This fiscal year is the beginning of a real take-off for us," said Amway Phils. country manager Fred Pizarro, Jr. "In the next five years, we should be growing about ten times from our current level."

Amway Phils. is a subsidiary of Michigan-based Amway Corp., which currently accounts for $5 billion of the annual $83-billion direct selling business worldwide. Its fiscal year starts in August.

Amway Phils. started in 1997 with only 11 home care products. Today, it sells over 200 products and several product lines from agriculture to cosmetics and from jewelry to nutrition. Five more items will be introduced this year.

"Because all of our products are imported, we carefully watch the foreign exchange rate," said Pizarro. "And we’ve been able to sell our products despite the higher peso-dollar rate."

Amway Phils.’ strategy is classic. On the one hand, it has kept its operating costs low. For example, it has moved its head office from Makati to Parañaque where there is more parking for its distributors. On the other hand, it has added value to its quality products.

Amway products are environment-friendly. Because they come in concentrate form, the products are more economical to use than other brands. The company also offers a 100% satisfaction guarantee for all its products. This means an unhappy customer will get a full refund on the purchase price of a product, even if the product has been more than half used.

Local market

Amway has also tailored its direct selling strategy to the Philippine market. Mindful of the Filipino consumer’s small spending power, the company plans to further scale down some of its products to make these more affordable. When Amway started in 1997, its sales kits–those typewriter-size boxes–cost P2,000 and contained about a dozen products. Later, it made the box smaller, took out some of the products and sold the kits for half the original price.

Like most direct selling companies, Amway’s strength lies in the quality of its distributors or independent business owners. "We are in the process of revising our sales and marketing plan to maximize distributor earnings," Pizarro said, referring to the company’s networking plan which determines the cash incentives distributors are entitled to.

"Special perks for our distributors, such as all-expenses paid foreign trips, are integral to the way Amway does its business and we will continue to enhance these as we grow," he said. This October, for example, top-performers will attend a leadership seminar in Sydney, Australia.

In his book, "Network of Champions," Shad Helmstetter wrote, "All too often, we stop looking up at the stars. We forget there are diamonds in the heavens–and one of them is ours." Helmstetter wrote the book specifically to help Amway distributors build their business.

But the book is not about how to go from door to door, selling dishwashing detergent. The book was written to help distributors improve their personal side, "those qualities and characteristics within you that either help you or hold you back" in the Amway business.

At the end of the day, Pizarro summed up the Amway business this way. "There are no bad businesses, only bad strategies," he said. For both Amway and Pizarro, getting a good distributorship going is at the top of its many strategies.