How Amway's Business Plan Works
Understanding Multi-Level Marketing Year 6 Business Studies New Zealand Curriculum
What is Amway?
Founded in 1959 in the United States Sells health, beauty, and home care products Uses a direct selling business model Operates in over 100 countries worldwide
How Does Direct Selling Work?
Products sold person-to-person, not in stores Distributors demonstrate products to customers Sales happen at home parties or one-on-one meetings No need for expensive shop rental or staff
Traditional Business vs Amway Model
{"left":"Traditional: Company → Shop → Customer\nAmway: Company → Distributor → Customer\nTraditional: Fixed shop location needed\nAmway: Work from anywhere","right":"Traditional: Hire employees with wages\nAmway: Independent business owners\nTraditional: Advertising through media\nAmway: Word-of-mouth marketing"}
The Network Structure
Each distributor can recruit new distributors Creates a network or 'downline' of people Original distributor becomes a 'sponsor' or mentor Network grows like branches on a family tree
Build Your Own Network
Draw yourself at the top of a piece of paper Add 3 friends you might invite to join Each friend invites 2 more people Count how many people are in your network!
Types of Income in Amway
Retail Profit: Money from selling products directly Performance Bonus: Rewards for monthly sales volume Leadership Bonus: Income from your team's sales Recognition Rewards: Trips and prizes for achievements
Discussion Question
Why might someone choose to become an Amway distributor instead of getting a traditional job? Think about: flexibility, income potential, being your own boss
Key Business Principle
Success in network marketing comes from helping others succeed. When your team does well, you do well too.
Summary: Understanding Amway's Business Plan
Direct selling eliminates traditional retail stores Network structure allows for team building and mentoring Multiple income streams reward different types of success Success depends on both personal sales and team development Provides flexibility and entrepreneurial opportunity