The Amway desi: The perils of 'motivational' marketing

“I want India to move to among top five overseas markets of the company in the next five years,” declared Amway chairman Steve Van Andel back in 2009. Four years later, his dream is in serious jeopardy.

The Kerala police have arrested Amway India CEO William S Pinckney and two directors, Anshu Budhraja and Sanjay Malhotra. DNA reports:

A top official of Economic Affairs Wing (EOW), Kerala, who was part of the operation that led to the arrests, said: “With the call of easy money, they have been luring people to invest. The new members in turn had to get more people and this was leading to illegal money circulation. We had received several complaints against the company.”

This isn’t the first time the company is in trouble with Indian authorities. “Being the promoters, the initial members - who enrolled the majority members into the scheme -get easy money without any effort. Thus, they are unlawfully enriching themselves at the cost of innocent members/distributors down the line,” claims a 2012 Economic Crime Information Report filed by the Enforcement Division.

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While its India website claims otherwise, Amway has been accused of running a pyramid scheme, and a vastly profitable one at that. Five and a half lakhs of Indians have succumbed to Amway’s get-rich-quick allure, earning the company a turnover of Rs 2,288 crore in the last fiscal year. If the company’s track record is any indication, the vast majority of them made little or no money.

[caption id=“attachment_822333” align=“alignleft” width=“380”]  A man looks at his laptop outside Amway’s sales showroom in Taipei. Image used for representational purposes only. Reuters[/caption]

The Amway model is alluringly simple: Become an Independent Business Owner, buy a bunch of nutritional supplements, household products and cosmetics; sell them to friends, relatives and strangers - and most importantly, convince them to sign up to do the same. And you’ll be on your way to that Porsche dealership in no time. Or more likely, in serious debt.

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It’s easy to believe that it is only small-town schmucks fall for the Amway brand of hucksterism. But long before Amway set up shop in India, it was luring Indians into its fold on distant shores. Everyone in Silicon Valley knew about them: The Amway desis. Pleasant strangers who lurked at malls and grocery stores, ready to lure a fellow Indian into conversation. The casual chat would lead to an exchange of numbers, and an invitation to tea or lunch or dinner. All this to invite you to take a “business opportunity” guaranteed to make you very wealthy, maybe even a multimillionaire.

Many of these Amway desis were well-educated techies who ought to have known better - like a dear college friend who turned into a born-again Amway evangelist within months of moving to Silicon Valley. He may have signed up because of the promise of easy money, but what kept him hooked were the motivational courses, CDs, and events sold (for a hefty price) as ’training’ materials essential for Amway success. Before long, he was speaking entirely in Amway psycho-babble, drifting away from his friends, and socialising almost exclusively with his new Amway ‘family.’

In this, he was no different than other Amway converts. “They told him the facts don’t count if the dream is big enough,” says former Amway devotee Dayna Briar, describing her husband’s recruitment to the Philadelphia Citypaper, “She says the motivational tools suppress negative thoughts on Amway by disabling the ability to question or criticise.”

‘Motivational’ training, CDs and events are part of the Amway strategy in India, reveals a recent Business World article which makes it clear that little has changed in the Amway MO:

Questioning the Amway modus operandi, a Bangalore-based businessman, on condition of anonymity, asks, “Do they tell you the virtues of the product or do they brainwash innocent IBOs by parading the Diamonds on stage, saying ‘we got here because we worked hard and never gave up’?” He realised that getting people to join was not easy. So he worked harder, went to more seminars, looked hungrily at the Diamonds and wondered what he was doing wrong. Then, he spent more time, energy and money buying products and learning tools. “Finally, it dawns on you that the incentive system is skewed heavily towards those higher up the chain,” says the businessman.

My friend too came to his senses, earlier than many of his Amway peers. He learned a hard if useful lesson about the thin line between ambition and delusion. But as long as we continue to mistake one for another, there will always be an Amway around to part us from our money.