Company Spotlight – How Amway Has Changed the Direct Sales World Forever

A giant in the direct sales world, it’s impossible to talk about American entrepreneurial success stories without mentioning Amway.

From its (very) humble beginnings in Michigan all the way back in the early 1950s to its dominance as the “800 Pound Gorilla” in the direct sales space today, there’s no getting around the fact that Amway has had a significant and outsized impact on not just the direct sales world – but marketing in general.

Below we dig a little bit deeper into the ins and outs of how this company came to be, what makes this company so special, and the impact that this company has today and moving forward.

A Quick History of Amway

While the company that would become Amway was originally founded in 1959 by Jay Van Andel and Richard DeVos (childhood friends and serial entrepreneurs), the idea behind this company was created at least a decade before that when Jay and Richard first started building businesses together.

Very close friends ever since they first went to school together, these two titans of American industry first started off in the world of business with a hamburger stand.

From there, they built an air charter service and a sailing operation. They then decided to jump headfirst into the world of distribution – originally with Nutrilite food supplements and then later with a couple of other companies.

In 1949, the two created a company called Ja-Ri (using the first two letters of their first names) and began importing products from South America for sale all over the United States.

Piggybacking off of a relatively new sales and marketing approach pioneered by Nutrilite called multi-level marketing (MLM), this company enjoyed almost overnight success.

Ten years later (and with more than 5000 distributors working for their company), Jay and Richard decided to fold this company into what they called the American Way Association – or Amway.

This was done to open up new product opportunities, new distribution relationships and to better protect their company as they grew and scaled upwards.

By 1964 (just five years after its founding), this company was nationally known, and by 1972 the company had already begun to expand worldwide. First, Amway spread into Australia, then to Europe, and later into Asia and Latin America. It would later become a truly global company by the early 1990s and continues to expand today.

All of this was made possible thanks to their multi-level marketing approach and commitment to offering quality products at almost unbelievable prices.

The Amway Difference

The MLM and network marketing model of business or Amway ended up being its almost unfair advantage, giving this company an opportunity to dominate in ways more traditional operations couldn’t.

With an army of distributors (including regular folks just looking to make more money when it was most convenient), Amway was able to flood the market with new products and new services but was also able to upsell, cross-sell, and create joint venture deals that exploded the potential for profit for everyone involved.

Plenty of imitators tried to copy Amway with their own twist on network marketing. Still, none of them had the foundation or infrastructure in place – or the distribution army – to come close to what this company created.

Today Amway enjoys sales north of $8.4 billion every year (and growing), making it far and away the most successful direct sales company on the planet.

It’s not hard to see how they had an outsized impact on the way that direct sales are handled at every level.

The Amway Impact

Amway is indisputably the direct sales industry leader, and the impact that they have had across the industry is felt in every company.

Here are just a few ways Amway’s pioneering efforts have transformed the landscape of direct sales for everyone.

Marketing Means Everything

Amway understands (better than anyone else) that the markets and marketing mean so much more than the products and services. Focusing on markets and marketing first is much more important than finding something cool to sell.

You can have the hottest product on the planet, with all kinds of bells and whistles, but if you don’t have a starving crowd desperate for that product – a red-hot market ready to buy – and marketing to reach them (or distribution to serve them) you’ll never have the kind of success in direct sales you could have otherwise.

The main takeaway (and something that agencies like DSDefenders understand better than most) is that you need to find a niche, a market, and a problem to solve before anything else.

After that, business runs almost on autopilot!

Customer Lifetime Value is King

Another major impact that Amway has had on the direct sales world is making the idea of Customer Lifetime Value a lot more mainstream.

Amway understands their customer metrics better than maybe anyone else. And this understanding allows them to take advantage of loss-leading products, losing money – sometimes a significant amount of money – on the front end of the first sale.

They do this knowing for sure that they will more than make the difference up over the long-term with those new customers, all thanks to their metrics.

This is a company that really pioneered the idea of “buying customers” right out of the gate, offering unbelievably good prices and great products at a loss to get customers into your funnel so that you could sell them more stuff later down the line.

The hardest thing in the world of business is convincing a complete and total stranger to trust you with your hard-earned money.

This company lowers defenses with killer deals, wins new customers over with great service, and then follows up with a strategic marketing campaign to generate unbelievable long-term value from those initial sales.

A lot of businesses (in the direct sales space or otherwise) could learn something here. It’s one of the core principles DSDefenders share with all of their clients because of how powerful it can be.

Create Win-Win Situations Whenever Possible

Finally, this company has really created a culture of “win-win” by building a business designed to help other people succeed first.

Without the army of distributors this direct sales giant has, they wouldn’t be anywhere near as successful as they are.

And the only way to create those distributors into welcome new people into the direct sales world is to give them all the resources they need to build the business of their dreams and an income source that can change their financial future almost instantly.

By providing these resources, by providing the structure to succeed, and by helping all of their distributors win – and win big – Amway creates conditions that make it almost impossible for them to lose.

This kind of approach has become a bit of this company’s “secret sauce,” that all entrepreneurs could learn from.