Tuesday 6 October 2009

Amway UK slashed rates to avoid civil bankruptcy

Shyam
It is interesting to note that, 2 years ago, 'Amway UK Ltd.' boasted around 40, 000 non-salaried commission agencies (with an annual drop-out rate of 50%). At this time, as a privately-owned company, 'Amway UK Ltd.' was not obliged to publish an annual, accurate disclosure of the average earnings of its non-salaried commission agencies. Our smug, masked avenging-hero, Mr. ('IBOFB') Steadson, squawks that most of these 40 000 agencies were merely customers of 'Amway UK Ltd.' whose owners weren't actually trying to earn anything. He thus pretends that these rational individuals were falling over themslves to buy 'Amway's' products at a 'wholesale price,' because they represent such great quality and value.
In the adult world of quantifiable reality, when a team of UK government accountants (led by Peter Bott) conducted a rigorous investigation of 'Amway,' they discovered that, even at the so-called 'wholesale price,' the banal products' prices were fixed at such prohibitively high prices (in comparison with equivalents widely-available in traditional retail outlets) that UK government lawyers later (in the High Court) described their unfortunate purchasers as deluded and vulnerable. However, prior to the trial, the corporate Officers of 'Amway UK Ltd.' had suddenly announced massive reductions in the prices of 'Amway' products, in a failed attempt to avoid civil bankruptcy proceedings going ahead. The dramatic reduction of prices was one of the undertakings given to the UK High Court by the attorneys of 'Amway UK Ltd.' which, subsequently, persuaded Judge Norris not to order the immediate closure of the company. Another undertaking was that 'Amway UK Ltd.' would publish each year a full and accurate disclosure of the average gross-earnings of all its non-salaried commission agencies.
Last year, even after the prices of the 'Amway' products had been slashed, the number of non-salaried commission agencies under contract to 'Amway UK Ltd.' had fallen to less than 6000. The average gross earnings of 'Amway UK' agencies (as declared in November of last year) are, in fact, so low that virtually all but a handful of their owners aren't even covering their operating expenses. The latest figures are not due to be announced until next November.
David Brear

1 comment:

IBOFB said...

Amway UK markets more than 450 Amway manufactured products and hundreds, perhaps thousands, of products from other manufacturers.

They dropped prices on something like a dozen or so of those 450 products - maybe 3%.

You really think dropping prices on 3% of available products made such a difference?

You truly are delusional - especially given the appeal judgement explictly pointed out that Amway's undertakings were not a necessary part of the court case being found in Amway's favour.