Amway India Chairman and CEO William S. Pinckney was among the three arrested, then released. (Photo by The Economic Times)
Business as usual: sadly, those three words go a long way toward capturing the heart of the story about three Amway executives in India who were arrested earlier this week.
By “business,” I don’t mean Amway—I am referring to the habit of some foreign countries to apply antiquated or flat-out ignorant laws that are nowhere close to being up to 21st century standards. These laws don’t adequately distinguish between illegal pyramid schemes and legitimate multi-level marketing companies such as Amway.
So, following a script that has played out previously in countries like South Korea, authorities make an arrest and then shortly thereafter release the “suspects” amid sensationalistic headlines about the charges pending against them.
The charges come under those authorities’ apparent interpretation that the three executives had violated the nation’s Prize Chits and Money Circulation Schemes (Banning) Act.
The Economic Times called India’s policy “obtuse” and in an editorial stated “the arrest stems from the official machinery’s inability to appreciate what distinguishes legitimate multi-level marketing from pyramid schemes whose sole purpose is to swindle people out of their money, promising them swift and high returns.”
Claims of this kind are nothing new. In South Korea, which is now a $1 billion market for Amway, the leading distributor with roughly 80% of the market, is Leonard Kim. A highly respected leader with World Wide DreamBuilders (WWDB), Kim on at least two occasions has been jailed and then released.
Amway’s international scope is reflected by the variety of foreign nations’ flags outside its Ada, Mich. headquarters.
Ironically, what these governments allege—that these Amway distributors or employees are part of a pyramid scheme—is directly opposite the truth.
And that truth is revealed by Amway’s persevering in those markets: this corporation is not some fly-by-night operation looking to make a quick buck and then move on to the next scam victim.
Founded in 1959 and now in more than 100 countries and territories across the globe, the company is in it for the long haul. Along the way, Amway has learned to weather these temporary storms as part of the price of exporting the American Way, and the opportunity that goes with it, to these other nations.
For some very good insights that provide more context about the perils of Amway’s international expansion, check out this post at The Truth About Amway.
In India, where Amway opened in 1998, the corporation has 500 employees and 550,000 distributors. It will begin building its first manufacturing plant later this year, at an investment of $95 million—surely a compelling sign of commitment.
It’s more than a little ironic, too, that the latest place where Amway is facing harassment from authorities is in a country infested with a longstanding caste system. That’s the social order in which people’s value is ranked largely by the happenstance of their birth.
And to think that it’s against that cultural backdrop that these officials would bring such dubious charges against a company dedicated to providing opportunity for anyone to succeed, no matter their socio-economic background.
The whole MLM industry really has Amway, as the #1 multi-level marketing company in the world, to thank for paving the way for other businesses to expand to countries all over the globe as it works to educate governments on the crucial legal distinctions that separate genuine businesses from pyramids and Ponzi schemes.
Here’s one simple test: is there a money-back guarantee on products? Because no pyramid is going to let you get your money back. Providing a money-back guarantee is one of the cornerstones of Amway’s business model and practice.
Economic Times graphic
To its credit, The Economic Times prominently noted that fact in a story following up on the Amway executives’ arrests in India (see graphic, left).
One of the great aspects of the Amway business is how it empowers and inspires distributors to look ahead to a brighter future.
Same goes for Amway India as a whole, where time will reveal this latest turn of events will be part of what makes the corporation, and its individual distributors, stronger as they conquer misperceptions in the marketplace.