De Vos did it his way with Amway
Written on the 11 March 2009
THE president of direct selling multinational Amway believes the ‘tried and tested’ model will continue to prevail despite a shift in consumer habits.
Doug De Vos (pictured) will celebrate the company’s 50th anniversary this year and is confident the brand can perform strongly in new global markets.
“I want not to look back but to look forward – to think about how to connect with the marketplace and improve,” says De Vos.
His father Rich De Vos started Amway with co-founder Jay Van Andel in 1959 selling a cleaning product, but it has since expanded to more than 450 products and is sold in 90 countries.
“In 1959, it was all about the American dream, but now it’s really the idea of entrepreneurs around the world, and our business model has stood the test of time,” says De Vos.
“We have been able to adapt with a wide range of products in a changing marketplace, and this healthy tension has helped us expand to developing markets, as well as strengthen our smaller markets.”
During a recent short visit to Australia as part of a global trip to assess Amway operations, De Vos says that while the Australian market constitutes a small percentage of the global business, the market here is solid.
“We’ve been here coming on 40 years now and there’s been a lot of leaders from Australia that have helped us take our products around the world, so the impact reaches outside the borders,” he says.
According to Amway Australia managing director Michial Coldwell, thousands of Australians join Amway every month.
“We’ve got a lot of people joining every month, in the thousands, and the majority of people are couples,” says Coldwell.
Despite its success, Amway has attracted its share of controversy and setbacks over the years — from alleged tax evasion and customs fraud cases, to bans on direct selling companies in China from 1998 to 2005. Some commentators have even likened the company to a cult or pyramid scheme.
But De Vos says the direct selling model is very different to pyramid schemes in that there are low costs to entry, members only get paid for products they sell and there is a money-back guarantee.
“In pyramid schemes it’s the opposite, where it’s so expensive to get in, people are forced to purchase so much of the products and it’s immediately a bad situation,” he says.
“You can only compete legitimately with legitimate products, and we put in a great deal of research into what we do.”
Technology has reshaped the way goods are bought and sold with the internet cracking open international markets, but De Vos says websites such as eBay has helped the way Amway conducts its business.
“It’s a supplementary tool for the business owner and through the web you can get access to the business information and keep track,” he says.
“Even though there has been a rise of competitors such as eBay, we haven’t seen them step into our space and I’d say the internet has done wonders to our business to strengthen it.”
De Vos says that as a private company, the value of Amway isn’t impacted too heavily by what’s happening in the financial crisis and is well positioned to move forward.
“Started by a couple of Dutch guys, you know we’ve got virtually no debt and we’re able to look to the future and invest,” he says.
“At a time when other folks are cutting back, we’re able to build and be better in the marketplace.”
While Amway has often been associated as a supporter of the US Republican Party, the company claims not to carry out operations with any political agenda. De Vos says the transition of presidency for Barack Obama meant now was a time for optimism.
“If you look back, every time there has been a transition you have seen a lot of optimism, and we (Amway) start to feel that as well and want the new president to be successful,” he says.