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NEW: Updated with a letter from former Amway employee Simon Dobson.
Amway: A Company I can trust?
What is going on?
The termination of our Amway business has been the subject of much debate and speculation. We feel that now is a good time to state the facts and clear up any confusion. The truth is after working the Amway business for 25 years and having reached the Diamond level we find our business terminated and we don’t even know why. We have been given reasons and we will explain them to you but they make little sense. Maybe it’s as simple as Amway needs to act tough to impress the DTI and we are scapegoats. We really don’t know.
A bit of background.
Mandy and I saw the business in 1982 and immediately began working it in earnest. We went Silver in 9 months, Emerald in 5 years and Diamond in 10. In between these events we formed a partnership with Pat & Greta Gregory to train our people together. The partnership was International Business Systems, often shortened to IBS.
At that time the relationship between the company and the leaders in the field could best be described as distant and mistrusting. We made it our goal to have a good working relationship with Amway (UK) management. We invited them in to speak at our major functions and worked with them closely on joint projects.
Martin Williams often boasted that his relationship with IBS was the best any country manager enjoyed with any organisation in Europe. He was grateful for the help the leaders of IBS gave him with the Amway Awareness Campaign, which was launched to bring about changes in the law governing direct selling to eliminate unethical practices in the industry. IBS Leaders met with several hundred MPs to ask for the changes in the legislation and the IBS Organisation collected 250,000 signatures on a petition that was handed into the DTi. Andy Norman and I co-wrote the IBS Training System booklet which was then sent out by Amway to every distributor who joined as part of the IBS organisation. It transparently discussed all areas of the training system, BSMs and meetings. It was heralded by Amway as a breakthrough and a template for other organisations to copy.
Over the years we saw Amway’s desire to exert greater and greater control over the training system. Certain popular books were deemed not suitable and had to be taken off the tool list. Tapes and CDs had to be edited before being authorised. Web sites had to be amended and approved. All of these requirements were annoyances that took time away from building the business but we complied with their requests 100% (see 1 and 2). All elements of the IBS Training System were authorised by Amway. In fact many Amway employees spoke at IBS functions and on IBS tapes and CDs. Click here to hear what senior Amway management have to say about IBS and its leaders. The video clips show Ben Woodward - Amway UK Country Manager, Andy Norman - Sales & Marketing Manager for Amway Europe and Michael Anker - Managing Director for Amway Europe.
The DTI Investigation.
Dave Butler first heard about the DTI investigation through a distributor. He reported it to Amway who were immediately dismissive (see 3). We were later told by Ben Woodward (our 13th Country Manager) that Amway was indeed being investigated by the DTI but it didn’t affect us as the two organisations that were also being investigated were Network 21 (N21 – the Jim & Nancy Dorman Group) and Britt Worldwide (BWW – Bill & Peggy Britt group). He could not tell us more because it was going to court. We heard nothing more from Amway about this until 4 May 2007. We did however have a visit from the DTI. Three people working on their behalf turned up unannounced at the IBS offices wanting to see us. Neil, our accountant, explained that we didn’t work from there but we set up an appointment to meet them at our offices on the 7 April 2006. We met three forensic accountants who were contracted to work for the DTI. The meeting was friendly and business like. They wanted to know how the Amway business worked. They said in the months they had been talking to Amway staff they had not met anyone who could give them a satisfactory explaination. We showed them the Amway Sales and Marketing Plan and answered their many questions. They told us they learned more in three hours with us than in three months talking to Amway staff.
Then they asked us about IBS. We explained how IBS operated and gave them a copy of the IBS Training System booklet (the current version ‘Who Does The Training’). They commented on its comprehensiveness and transparency. They left with a set of the last year’s accounts and thanked us for our openness.
4 May 2007
This is the day Ben Woodward sent out the famous email (see 4). We had no prior notice of this except for a phone call to Mandy by Ben where he read it out 20 minutes prior to sending it to the IBO force. To say I was shocked when Mandy rang me (I was in Norfolk having just done the Open) was an under statement. I saw 25 years of work disappearing over the next 6 months. We phoned Pat & Greta and agreed that we had no option but to comply with Amway’s instructions even though it would mean huge disruption to the business and financial issues for IBS, resulting in several IBS staff losing their jobs. We cancelled open meetings due to be held the next day, seminars a couple of weeks away and the major function due to be held in Telford in June. We stopped the movement of all CDs and books. We took down our own personal web sites and the content of the IBS web site (except as agreed with Amway – the home page – with instructions on how to claim a refund for tickets purchased for our functions (see 5).
Obviously IBS were facing losses that ran in to the hundreds of thousands of pounds by complying with Amway’s instructions but conversations with our Country Manager Ben Woodward gave us the impression that Amway would compensate us for the losses that the compliance with their instructions would cause. These verbal reassurances were followed by a letter on the 15 May (see 6) in which he not only explicitly told us we would be refunded but he gave instructions on how to claim the refund.
Two days later we received a short email (see 7) to say we were now not going to be refunded. No reason was given for the change in policy.
A phone call from Sue Cox, Senior Business Conduct Co-ordinator
On 23 May I received a call from Sue Cox – she was ringing to say that the next day we would be receiving a recorded delivery letter (see 8). Because we still had a couple of web sites operating we were “no longer in good standing” with Amway. I was in disbelief. On checking we found it to be true, we did have a couple of web pages with orphan links. It was an oversight. Surely Amway wouldn’t punish us for an oversight?
When the letter arrived it was accompanied by a letter of undertakings which we had to sign and return within 7 days or our business would be terminated (see 9). Our lawyer said he had never seen anything so draconian in his life and regarded Amway as using bully boy tactics. We had no option but to comply.
We attended a Platinum meeting at Whittlebury Hall on the 23 June. Each speaker said the DTI had criticised Amway for not enforcing its own rules. Each speaker said they would be tough on anyone breaking the Amway Rules of Conduct and I thought to myself “They’re looking for scapegoats”.
First Conversation with Lars Noeies
A few days later I had my first ever conversation with our new Regional Manager Lars Noeies. He introduced himself and informed me that a second recorded delivery letter was on its way (see 10) to inform us that our business was now suspended. A further two web sites had been found promoting the IBS Training System.
On investigation it turned out that one web site was owned by IBS but it was obsolete and we had instructed for it to be taken down on 21 March 2007 (before the 4 May moratorium). The other web site was a project one of our IBO’s had produced. We had nothing to do with it, knew nothing about it and had certainly not approved it. These facts were communicated to Amway in our response (see 11). We and Pat & Greta tried to talk to the management of Amway on several occasions over the next two weeks but no-one was available to speak to us. Unable to reach anyone on the phone we wrote another letter to Sue Cox to ask for the lifting of our suspension (see 12). Eventually on the 18th July, she wrote back acknowledging our letter and offering the hope that Amway would reconsider lifting our suspension (see 13) after we sent on the Mistral letter (see 14)
There was no more correspondence from Amway until the 13th September when we received a letter from our new General Manager Tom Denham (see 15). In it he made clear that rather than lifting the suspension Amway was not going to offer us the opportunity to have a new contract as an ABO as it “would not be consistent with its objectives”. No further reason was given (or clearly required) for the termination of a business we had committed 25 years to.
On 16 October Amway posted a statement on its official web site titled “IBS Unplugged” (see 16). It stated that ‘Diamonds Jerry Scriven, Dave Butler, and Pat Gregory (don’t the ladies count?) have had their contracts terminated “because they had been unsupportive of Amway UK’s reforms on a new mode of operations”. Dave had not received any prior notice from Amway of this decision. He was informed of it by a downline who had read the blog.
We have been hard working, loyal Amway IBOs for 25 years, and Diamonds for 15 years. We believe we could not have done more to comply with Amway's Rules of Conduct / Code of Ethics. As this business has been a big part of our lives we have found the recent events to be deeply shocking. We still find it hard to believe that Amway can treat its leaders in such an unreasonable way. We hope that our experience serves as a warning to others.
P.S. In case you missed them here are the three video links:
So what shall we do now?
As you know by now the last few months have been extremely eventful (or is it event-less?) for the Amway Business culminating in the closing down in November of IBS and the end of the IBS Training System.
A bit of History
The IBS Training System was set up over 25 years ago by us and Pat & Greta Gregory to support our IBOs in the building of their Amway business. This role was effectively ended on 4th May 2007 when Amway announced a moratorium on the holding of IBO organised events and the movement of all (previously authorised) BSMs such as books and CDs. These actions were taken by Amway in response to the DTI’s investigation and on-going attempt to seek a winding up order on Amway (UK) Limited. We believe these actions are an attempt to use us as scapegoats to deflect attention from the main concern of the DTI, namely the viability of the Amway business for its IBOs.
What shall we do?
When this crisis first blew up we immediately sought advice from our upline in the States. They thought it prudent to look for new projects for our team in case Amway was closed down, or it survived with an unworkable business model. As Jerry Harteis put it “It’s harder to build a team of people than it is to find an exciting project for them, and Amway will miss the IBS Team far more than the IBS Team will miss Amway!” So we set off along with our downline Diamond Dave Butler to look for opportunities. More of that shortly.
Why not press on with Amway?
Well……we don’t have that option. Amway terminated our contracts along with Dave’s and Pat & Greta’s on the most spurious of charges. As one of our downline put it “Why would anyone ever build the business after this? If they can terminate a Diamond on a whim, why would anyone invest 10 years of their lives to go Diamond?”
What about you?
You have the option to continue with Amway unless the DTI succeeds with its petition to close it.
Why not continue?
The question is whether the rewards are worth the effort.
The IBS Diamonds, along with others, have been making representations to Amway for years to make the business more rewarding at all levels. We have seen a highly viable business model slip as incomes have fallen while the price of the products has continued to rise. Promises to look into these issues and increase IBO profitability were made by Amway but not kept. It has taken legal proceedings by a department of the British Government to get Amway to take action.
Their response, however, has been bizarre. Instead of increasing IBO profitability their actions have actually reduced it. How is that going to impress the DTI (DBERR)? All Amway Small Business Owners now pay the same price as their clients – the retail price. They can get a 25% rebate when they do 100PV. But what about the ABO who just has a few clients and misses this threshold?
1. He/she orders the products at retail
2. He/she pays Amway for shipping
3. He/she uses his/her petrol (£1.00/$2.00 a litre) to deliver the goods to his/her client
4. He/she charges them the same price that he/she paid for the products
How does this increase profitability?
In the old plan you could earn a bonus based on your group activity. That was the reward for building a network. But now you have to retail 200PV to 5 retail customers each month to receive a bonus. Your own personal volume based on self-use cannot be counted. Amway’s response to low sales due to over-priced products is to force ABOs to sell products to get a bonus on their group’s volume. The effect is a lot of people who have earned bonus for years (based on years of work) won’t get a bonus. How will this improve ABO profitability? And what happens to the unpaid bonus? Does it pass upline to the next person who qualifies for it? No, Amway keeps it!
So our conclusion is, even if Amway isn’t closed down, it’s no longer worth the effort and it is a company that can’t be trusted.
It’s not what happens to you………
Losing our income unjustly overnight could best be described as an “attitude test”. Well meaning people who were unaware of the seriousness of the situation repeated back to us things we’ve said to them “It’s not what happens to you, but how you react that’s important!!” “One door closes, another one opens”. “In every adversity is the seed of an equal or greater benefit”
Well, we did think about wallowing in self-pity, but there didn’t seem to be much point. And trite as these sayings may seem…….they are true. With the benefit of hindsight we would like to thank Amway for their actions. They’ve actually done us a huge favour. We would have loyally plodded on (we’re that sort of people) with Amway for years putting up with poor results and frustration whilst looking for the positive. (The positives by the way, were always the team of people and the self-development, not access to SA8 and LOC).
Having forced us to look elsewhere we have realised how poorly paying and old fashioned Amway is compared to other businesses. We have evaluated several in the last few months and have come up with three that pass the test. They are Internet based, low cost, low risk, real fun and highly profitable. So if all this comes as news to you and you still have unfulfilled dreams and goals, the good news is that they are much more achievable now than they were on 4th May 2007!!
If you want to find out what “The Team” is now doing contact your active upline to find out. If you fail to make contact please feel free to contact us and we’ll put you in touch.
Whether you press on with the Amway business, join us in our exciting new ventures, or follow your own path, we would like to wish you every success and happiness.
Jerry & Mandy
A letter from former Amway employee Simon Dobson
Dear Jerry and Mandy,
I read with interest the posting on the website which prompted me to respond.
I will be honest and frank, I have no loyalty to IBS, yourselves and certainly even less to Amway. It is clear to me from working in the UK office, that Amway operates anyway it pleases and I am 99.99% sure that your theory on being a scapegoat is the most accurate account for what has happened.
I have no doubt at all that you are scapegoats for a company that is taking on water and trying to get rid of weighty objects to stay afloat. During my time at Amway, I was privy to many conversations regarding yourselves and Pat and Greta where the general feeling for you was more of contempt as you dictated what you wanted for your business and if I am honest, some senior management did not like your attitude. They were waiting for any opportunity to do something to discredit or even get rid of you.
Their new love and energies were to be diverted into N21 and the fast growing Britt organisation. Fast growing, because some addresses had 25 IBOs registered to them, none of which were really contactable in the UK. Great business sense when 25 copies of Amagram get printed and posted! But those groups were the favourites, Amway worked closely with Network 21 on their new systems, which to me resembled stacking, which I believed was against the rules but who was I to ever question why?
I hope you get justice, as I feel you have been dropped from a great height by a company that in essence You, Mandy, Pat, Greta and all the IBOs before and now, made. Without the IBOs Amway in the UK would be nothing and Amway would have not had a UK affiliate.
Amway spent every day pushing its values down my throat but never once has it adopted them itself.