Friday, 15 August 2008

Unjust enrichment Amway style

So far, the so-called apologists of Amway failed to justify many a point and it could be ascertained giving a glance at the earlier articles and their meek responses.
Let us move further to find out how the Amway is lining its pocket in easy and quick way.
A person who wants to join as a distributor or independent business owner (IBO) for Amway has to pay a subscription fee of Rs 4,400 out of which Rs. 1,800 is directly credited to the account of Amway company. Amway in the Writ Petition Nos.20470 & 20471 of 2006 filed by it in the Andhra Pradesh High Court categorically stated that they have enrolled 4,50,000 distributors all over India. Even taking this as true, a sum of Rs. 81 crore was appropriated by the company at the time of enrollment of the members. Isn't it easy and quick money got by Amway from the called distributors/members without offering any service.
Let us move on further, a distributor has to maintain a minimum business level of 50 personal volume (PV) to qualify for getting higher commission and that is sufficient inducement for the members to strive relentlessly for maintaining the PV level at or above the said minimum level. To ensure that he would not lose the opportunity of receiving performance commission @ 15% and above every month (with effect from September 1, 2007), @ 21% and above every month between September 1, and August 31, 2007)each IBO has to distribute/purcahse/sell Amway products worth Rs.2,250 every month lest he becomes ineligible to get commission at higher rate. Thus each member is forced/induced/lured to purcahse Amway products worth Rs. 2,250 every month to keep his chance of getting substantial commssion alive. Thus Amway would automatically get a business quantum of Rs. 1,215 crore per annum without offering any service to the distributors/members, getting an an astronomical amount without any effort on its part, which can be stated as windfall. Isn't it easy and quick money.Amway conveniently refers this as turnover by sale of products irrespective of whether its IBOs sell the productrs or not.
We shall explore more avenues of Amway exploitation in the coming episodes.

1 comment:

IBOFightback - Fighting the Amway Myths said...

umm ... you don't just pay the money ... you buy products, stuff you need and want. And if there's not stuff you need and want, then you find people who do need it and want it, and sell it to them.

You truly have no idea at all how the business works, do you?

Or you in the employ of an Amway competitor? I asked this before and you didn't answer