Amway

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Name: The Amway Corporation

Founders:   Jay Van Andel and Richard M. Devos

Year Founded: 1959

Headquarters:   Ada, Michigan

FOUNDER/GROUP HISTORY

Andel and DeVoss first realized the marketing potential of independent distributors when they worked selling Nutrilite.  In 1959, they organized their own system of marketing through independent distributors selling L.O.C.® Multi-Purpose Cleaner.  Quickly the business took off and, according to Amway, did a half million dollars in business their first full year.  Since its beginning, Amway has grown to do 7 billion dollars in sales and has reached 14,000 employees worldwide.  Their plant in Ada, Michigan stretches a mile and covers 390 acres. 1

“The System”:  The key to Amway’s success is not the products they sell, rather the system in which they sell.  Amway does not have a traditional sales force.  In fact, Amway technically does not employ sales people, rather they sell their products through independent contractors.  It is a business made up of small businesses.  Only a small aspect of the system is the products you sell.  What truly makes a successful Amway distributor is a person who sponsors many other distributors.  Each distributor has an “upline” which consists of the person who sponsored them, the person who sponsored the sponsorer, and on up.  A successful distributor will also have an extensive “down line” which consists of people who they sponsored, anyone that person may sponsor, and on down.  A distributor not only gets money for what they sell, but they also get a bonus based on how much their “down line” may sell.  Therefore a person with a very large down line may never have to sell a product themselves, yet still make a lot of money.

Much to the Amway Corporation’s dismay, Amway has often been compared to religious groups or even “cults.”  Although Amway is a non-religious entity (ultimately it’s a business!), it shares many features with religion.  It seems Amway would fall into the category of the “para-religious.”  According to Arthur Greil, the para-religious are “phenomena that clearly fall outside the American folk category of religion but which nonetheless seem to be “like” religion in certain notable ways.” 2

Amway and the Entrepreneurial Model of Religious Formation:  As a possible explanation for religious formation, Rodney Stark and William Bainbridge have presented the entrepreneurial model to show how certain religions may have formed and grow.  Although Amway does not fit the traditional definition of a religion, Amway seems to have formed in a similar way.  The entrepreneurial model notes that religious founders may consciously develop new compensator-systems in order to exchange them for great rewards. The entrepreneur is often stimulated by prior involvement in a religious movement, is open to experimentation and restructuring of their products, and is motivated by a desire for profit.  Motivation to enter the movement is stimulated by the perception that such business can be profitable. 2

It may seem that any entrepreneur may follow a similar pattern.  But Amway is unique because the business has always been run by De Voss, Andel and their children and has never been a business corporation in the traditional sense.  De Voss and Andel were inspired to create their own distribution system after a successful experience in the Nutrilite business.  They carefully constructed their business around a great vision which would hopefully attract as many potential distributors as possible: the American Dream.  It is of no coincidence that Amway’s name (although it cannot be used for legal purposes) stands for “the American Way.”  The key to gaining distributors is promoting the vision of free-enterprise, financial success, and the feeling of operating your own business.   Amway is specifically structured so that everybody has the same potential for success.  In Amway, the truck driver who has a large “down line” is looked up to more than the doctor who just started.  Each meeting of Amway distributors begins with a “dream session” where members speak of things they would like to have: cars, travel, and charity. Amway also encourages a strong family bond by requiring husbands and wives to share businesses and providing families with free time to spend together.  Amway is carefully constructed with a grand reward system, “the American Way,” which promotes free-enterprise, independence, the family, America, and most importantly financial success. 4

Because of this carefully structured process, Stark and Bainbridge propose that  many people (specifically journalists) “hold that these innovators are outright frauds who have no faith in their own product and sell it through trickery to fools and desperate persons.”  5 Many similar views have been given to Amway.  The duty of this page is to remain objective and restrain from judgment on this issue.

DOCTRINES/BELIEFS

The Sacred and Profane:  Durkheim introduced the ideas of sacred and profane beliefs in explaining what holds religions together.  The sacred is anything supremely important that you must approach seriously and with due preparation.  Profane things, on the other hand, are ordinary things which can be handled “matter-of-factly.” 6

Sacred beliefs are very important to Amway’s organization.  One only has to go to the Amway World Headquarters in Ada to understand this.  The core of Amway’s Center for Free Enterprise is the “Freedom Shrine,” a collection of twenty-eight reproductions of historical manuscripts promoting freedom for every American.  Included are the Constitution, the Gettysburg address, the Emancipation Proclamation, and the Declaration of Independence. 7  Each embodies freedom; a belief very sacred to Amway.

Near the “Freedom Shrine” is the “Hall of Achievement” where the names of all the direct distributors and higher are placed.  This symbolizes the sacred belief in moving up in the Amway system. The hierarchy of the Amway system is shown with special pins.  Pins are given for sales consistency, number of sponsorships, and so forth. The greatest milestone of a distributor is becoming a “direct distributor.”  When a person reaches this point, they begin buying directly from the company.  The occasion is marked by a special ceremony in Ada and recognition in the “Hall of Achievement.”  Beyond this a person can work towards Ruby, Pearl, Emerald, Diamond, Double Diamond, Triple Diamond, Crown and finally Crown Ambassador.  Each level is recognized with some special ritual and the higher your pin, the more you are looked up to. 8

In order to keep its members under control, there is a set of guidelines in Amway’s Career Manual which must be followed to keep Amway’s reputation.  This is held sacred because if a distributor breaks a guideline, they can no longer participate in the organization.

Beyond these things, Amway holds things previously mentioned “sacred.”  The ideas of the family, independence, and financial success are also sacred beliefs to Amway distributors.

RITUALS/PRACTICES

Durkheim further emphasizes the importance of rituals to bond people together and remind them of their sacred beliefs.  Rituals are probably the single most important factor to Amway’s success. 9

The pin system is one important ritual in Amway.  At each pin level, a ritual is performed to recognize the achievement.  When a person reaches the direct distributor level, they are flown into Ada, Michigan where they stay in Amway’s own Grand Plaza Hotel in luxury.  Here they hear addresses by company leaders and have their pictures taken for the monthly newsletter.  Similar methods of recognition are used at each level.  At the Diamond level, a person becomes a member of the “Diamond Club” which meets periodically at exotic locations.  At the Double Diamond level, a person gets their own special day where they are flown by the company jet to Ada and treated as royalty.  The factory is draped with banners in their honor and employees wear buttons with their names. 10

Every time a distributor picks up products at their direct distributor’s house, some type of ritual is performed.  Here you are likely to watch a film, listen to a presentation, or go into detail how to better show your plan.

Group rallies are always a set ritual.  They usually begin with the Pledge of Allegiance and end with “God Bless America.”  Music groups often perform and crowd chants are done.  A “dream session” is held to review what sorts of things people desire to achieve.  Finally at every meeting, people put all their names in a L.O.C.® Multi-Purpose Cleaner bottle (Amway’s first product).  The announcer draws names from a bottle and that person has to go up and say what excites them the most.  This excites the crowd and gives the individual confidence. 11

These rituals are vital to Amway’s success and reinforce what is sacred to the distributors.  This type of process is very similar to religion.

REFERENCES

Books

Ammerman, Nancy Sue. 1983. `Because People Buy Soap’: Amway and the Priests of Capitalism. Master’s thesis: University of Virginia.

Biggart, Nicole Woolsey. 1989. Charismatic Capitalism: Direct Selling Organizations. Chicago: University of Chicago Press.

Butterfield, Stephen. 1985. Amway, the Cult of Free Enterprise.  Boston: South End Press.

Collins, Randall. 1992. Sociological Insight: An Introduction to Non-Obvious Sociology. New York: Oxford Univeristy Press.

Conn , Charles Paul. 1978. The Possible Dream: A Candid Look at Amway. Geensburg; Penn.: Manna Christian Outreach.

Greil, Arthu L. and Thomas Robbins, eds. 1994. Between Sacred and Secular: Research and Theory on Quasi-Religion.

Roberts, Richard. 1995. Religion and the Transformations of Capitalism. New York: Routledge.

Smith, Rodney K. 1984. Multilevel Marketing: A Lawyer Looks at Amway, Shaklee, and Other Direct Sales Organizations. Grand Rapids: Baker House Books.

Articles

Bromley, David G. 1995. “Quasi-Religious Corporations: A New Integration of Religion and Capitalism?” in Richard H. Roberts, ed. Religion and the Transformations of Capitalism. New York: Routledge. pp. 135-160.

Bromley, David G. 1998. “Transformative Movements and Quasi-Religious Corporations: The Case of Amway,” in Demerath, N.J. et al, eds. Sacred Companies: Organizational Aspects of Religion and Religious Aspects of Organizations. New York: Oxford University Press. pp.349-363.

Greil, Arthur L. 1993. “Explorations Along the Sacred Frontier: Notes on Para-religious, Quasi-religions, and Other Boundary Phenomena,” in The Handbook on Cults and Sects in America. Part B. David G. Bromley and Jeffrey K. Hadden, eds. Greenwich, CT: JAI Press, Inc. pp. 153-172.

Greil, Arthur, L., and Thomas Robbins. 1994. “Exploring the Boundaries of the Sacred.” in Greil and Robbins. op cit. pp. 1-23.

Endnotes

1. Information from Amway’s Homepage. www.amway.com
2. Greil article (see bibliography).
3. Stark and Bainbridge. (see bibliography)
4. Ammerman 5.
5. Stark and Bainbridge.
6. Collins 34.
7. Ammerman 41.
8. Ibid.
9. Collins.
10. Ammerman 25.
11. Ammerman 27-30.

Created by  Christopher Smith.
For Soc 257, Spring 1998.
Last modified: 04/16/01

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