Ada, Michigan: Once a household name and reputedly the key to great fortune for modern salesmen hoping to live out a Horatio Alger myth, the Amway brand faded from the US market years ago, tarnished by legal and regulatory problems.
Direct approach: (L to R) Alticor president and co-CEO Doug DeVos, Amway Global managing director Steve Lieberman, and Alticor’s chief marketing officer Candace Matthews. Alticor has brought in Lieberman and Matthews to help revitalize the Amway brand in North America. Photographs By AP
The direct-seller of everything from health and beauty items to household cleaners repeatedly fought allegations that it was a pyramid scheme. The company also paid $20 million in fines in a Canadian criminal fraud case in 1983.
In 2000, after Amway become part of an umbrella company called Alticor Inc., the Amway name was dropped in the US and Canada. The hope was that the company could emerge wholly remade in the world of online sales under a new moniker: Quixtar.
Now, as Amway’s 50th anniversary approaches in May, Alticor is retiring the inert Quixtar label and pouring millions of dollars into reviving the Amway brand in North America with market research, national television commercials and ads in newspapers and magazines and online. The company will use a transitional name, Amway Global, before reverting in about a year to Amway.
“We thought, well, if we’re going to build a brand, build the brand that everybody knows already,” Alticor president and co-CEO Doug DeVos said in an interview. “It’s going to be much more successful and cost a lot less and happen a lot faster.”
Despite predictions of continuing economic gloom, Alticor executives hope to repeat in the US the kind of growth they’ve seen abroad in the past —and to revive the mystique that helped the company spread throughout the Midwest and, by the mid-1960s, the rest of the US. Amway’s hundreds of thousands of distributors dreamed of getting rich by selling cleaning products and by recruiting their acquaintances to join the fold.
Still operating on that basic model, including prices that tend to be higher than those of their competitors, Amway saw global sales revenue top $7.1 billion in fiscal 2007. The company predicts another $1 billion increase this year. And most of its recent growth, in such developing Asian markets as China, India and Russia, has been under the Amway name.
“In the late 1980s, about three-quarters of our business was here in the US,” says Steve Van Andel, Alticor’s chairman and co-chief executive and— like DeVos—the son of one of Amway’s founders. “Now about 80% of it is outside the country.”
The company is gambling that consumers at home, where sales have been flat for years, will remember the days when Amway was known less for scandal and more for unrelenting pitches from well-scrubbed and optimistic door-to-door salesmen.