Tuesday, 11 August 2015

Amway subsidiary under fire over 'misleading' recruitment

A direct sales company has been accused of misleading young adults as it aggressively 
attempts to recruit new sellers.
A subsidiary of Amway, which has thousands of sellers across Australia selling health, 
beauty and home goods, hosted a series of information sessions in Melbourne recently, 
telling young people that they would be given free mentorship but failing to mention it 
was for Amway.
One of those young people who was invited to a recent recruitment meeting in Doncaster, 
Liam, told Fairfax Media that the "very secretive" session was misleading and he felt let 
down by those involved.
"It was never mentioned that Amway was part of this. It seemed to be geared to people in 
my age group; that was most of whom turned up."
"My impression of this group is that they tried to hide that it's actually Amway," he 
said.
Liam, who is studying business at university and works at a supermarket, said he was 
approached by a regular customer who asked if he was interested in being mentored. He 
said the long-time customer did not mention direct selling would be involved.
Liam said the meeting was run by a representative of Team Mak and Gen*E Group. Neither 
company mentions Amway on its websites or that direct selling is the business. Instead, 
they emphasis group holidays overseas, conferences and motivation quotes.
Team Mak is an official subsidiary of Amway Australia. There are dozens of such 
subsidiaries, or "Independent Business Owners", around the world, which have been 
established by successful sellers, who can earn a commission on new recruits and their 
sales.
On its website, Team Mak says it is an "association of people, using proven business, 
mentoring and training resources to help people achieve a greater level of financial 
freedom and more time to enjoy their lives".
Team Mak director Peter McKenna said he was concerned to hear about Liam's experience, 
adding that anyone within the company whose conduct was misleading would be retrained.
"We teach a transparent process where people are shown a video before they are even 
invited to a meeting. The video reveals the relationship between Team Mak and Amway," he 
said.
Amway Australia distanced itself from the recruitment drive, with its general manager 
Michial​ Coldwell saying that type of approach was "totally unacceptable".
"There have been occasions over time where Amway has found that distributors have 
attempted to prospect on a "look and see" basis rather than by using the business 
opportunity or brand as a first instance approach," he said. "That strategy is not 
encouraged by Amway."
Coldwell said Amway's rules of conduct specifically preclude "misleading prospective 
distributors into believing that the approach is anything other than for the purpose of
either the sale of Amway products or the offer of an Amway business opportunity".
"Our rules of conduct are very strict in the conditions they place on our Independent
Business Owners, and we have a demonstrable track record of enforcing those rules."
According to the Direct Sellers Association of Australia, combined sales through direct 
selling reached $1.5 billion in 2013, with more than 32,000 people part-time and 7700 
people full-time workers. One-quarter are involved in complementary healthcare products, 
followed by cosmetics and household goods.
Direct Selling Association of Australia executive director John Holloway said the 
industry had changed dramatically in the past 30 years.
"From time to time, you're going to get people who rely on practices of the past and I'd 
be amazed if Amway put up with it," he said.
"Legitimate direct selling derives from the sale of product, not the recruitment of 
people."

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