Well, here we are again in Ada, Michigan, and this is Rich. You might not know it, but today is my birthday. It's the 4th day of March, and I'm 57; so you won't have to spend a lot of time discussing it. And since it's the second Directly Speaking tape dealing with some of the real challenges that this organization faces right now, I thought maybe we ought to kind of get back to some fundamentals a little bit and then see if we really can't answer a lot of the questions that have come to me.
My mailbag, since the last Directly Speaking tape, has been very heavy. Many, many of you have written letters, saying, "It's about time," "Thank goodness," "Hallelujah," and a few other joyful expressions. My desk became piled high with people saying, "I support you in your Ten Points." And if you haven't written such a letter and you feel that way, I'd still urge you to write it. We are down to a point of trying to find out who really supports this Amway program; and, if after listening to the last Directly Speaking tape you felt like you wanted to stand and yell and say, "We stand with you," and never bothered to write, it's important that you do.
Let me just see if I can't reiterate a few of the important things that I think are facing us right now, some principles that are involved. And it is, of course, the reason that I am writing, or, why I'm talking to you,
Someplace along the line, we lost sight of the fact that the Direct Distributor is the operating head of their organization. All due respect to the upline. I don't care who they are; I don't care what pin level they are. Many of you have heard me talk over and over again about the fact that if your sponsor did nothing more than tell you about Amway, they opened a door of opportunity for you; but only you can walk through it. And those of you that I'm talking to today are Direct Distributors; you took the challenge; you walked through that door, and you became a Direct Distributor in the world of Amway. In our book, that makes you the head, the star the outstanding performer, who, unlike many others who looked at it and listened and either turned it down or did nothing with it, you did, and you are to be commended.
I'm disturbed, because I find too many people are putting Directs down and saying, Oh, what are you? "You don't know enough," a Diamond's where it's at. And you know, it's true; we have a lot of awards at Diamond. But we decided a long time ago in this company that Direct Distributor is where it's at. After all, a Diamond is only a person who has six Direct Distributors, and a double Diamond is one who has twelve; but this whole Plan revolves around the leadership of the Direct Distributor. And that's, of course, why we're talking to you.
I'd like to get through some of the kind of negative stuff that's come on my desk, also. As I told you, I've a lot of positive responses. I also have a lot of horror stories, stories that must have been swept under the rug or hid behind the curtains, that should have been brought to our attention a long time
And, so let me see, now, if I can just take some of the questions that you've sent to me, some of them in anger, very mad at us for doing a simple thing, like putting BV on tapes. None of us here ever realized that we would cause to come out in the open all that has now come forward; but I must assure you that now that it is out in the open, we have no alternative but to move forcefully and directly on all the things that are now before us here. We cannot turn our back. We cannot sweep it under the rug. We must deal with it; and deal with it, we will. And we are developing the resources inside this company to attack it on a one-by-one basis.
One of the complaints that we received was, "Why do you always act as though we are all guilty when it's only some who are guilty? Why don't you praise the rest of us?" And, you know, I think that's a marvelous idea; and I do try to praise you.
So, on the one hand, if I talk openly to all of you about some of the challenges, I am accused of painting everybody with a broad brush and making them feel quilty. On the other hand, if I don't talk to you openly about all of these problems, great numbers of you think we are doing nothing. And, therefore, as adults, as leaders of the business, which is what you are, as the operating heads, as the responsible party, we must share with you the problems of the business, as well as the challenges and the joys of the business. And, I guess, I must trust that you are big enough to cope with both of those; so that on the one hand, you don't get all bent out of shape because there are problems in the business and lose your excitement for it, and on the other hand, that you don't get carried away with your own power and greatness if we don't challenge you with some of these issues. So, I don't want you to get to where it goes to your head; and, by the same token,
Let me take some of the kind of nasty ones first. They kind of come in groups, by the way. You can always tell when some person in the
Well, let's just talk about trust a little bit. How can we be accused of breaking trust when all we did was do what they are asking us to do in the next sentence, put some more money in the Plan? You know, the first sentence says, "You've broken your trust;" the second sentence, "Put more money in the Plan." You know, you shouldn't have sent the telegram. We just did; we put more money in the Plan for the Direct Distributor and everybody who earns BV. Now, how can that break trust? I can see where, if we had decided to eliminate a bonus, to remove items from BV and ask you to handle them without anything, that you could accuse us of such a thing. I don't see how I can possibly be accused of breaking trust when we have, indeed, enriched the Plan and exactly in the form in which the Plan has always operated, which is a principle I think those who have written such telegrams have forgotten.
This Plan was geared around the sharing of the opportunity with everybody in the line of sponsorship. I think what some are saying to me is that we had a nice system that shared it with only certain, selected people in the Plan; we split the money amongst the Diamonds and the Emeralds; we didn't give it to anybody else. Trust? Whose trust? Whose trust was betrayed? All those good sponsors who brought you all those other people who were walked over, stepped on and bypassed? Do they deserve your trust? And then to question whether we should be trusted, who have protected the Plan, is really an insult to me.
I am further fascinated, by the way, with this whole idea of "put more money in the Plan, but don't raise the prices." I've heard that, you know, for a long time. I guess, what that says to me, from a person who hasn't thought it through, "Give us more. Take it out of the company's coffers; but don't charge more to the customer." Sounds good, doesn't it? Sounds like the same kind of a problem that got the automotive industry in trouble; like the same kind of a problem that got the steel company in trouble; like the same kind of problems that have seen businesses go down the drain forever, which is, "Oh, just raise the prices; give us more money." No way, folks. There just is no way to continue to pay people more money for doing the same amount of work.
In one of the telegrams, it said, "But we have to travel great distances." Oh, do you? Who said you have to travel great distances? Who said you have to go from one side of this country to the other to sponsor someone? You know, Jay and I started in this business in Grand Rapids, Michigan. We built our business in Grand Rapids, Michigan. We lived off the volume we generated in this town. We lived with the people we sponsored; we lived with the ones who chose not to be sponsored. But we developed a reputation in our own community of operating an honorable business, and we were able to sponsor people in this town regularly. And when, finally, others developed in leadership roles in our Nutralite business, we went fifty miles away to Lansing, Michigan, or we went to Holland, Michigan, or we went to Detroit, a hundred and fifty miles away. And I remember driving those nights; I remember coming out of Detroit after a midnight meeting and driving home because it saved the twenty bucks of a hotel room, and we did it every week, year in and year out. We didn't talk about suites; we just wondered where there was a cheap hotel to stay in.
You know, folks, it's time we got back to the fundamentals of this business. There is no way to put a lot of money in this Plan, other than a very simple one. I can show you how to double your income; and that is by doubling your volume. Somebody says, "Put an extra one percent in at all levels." And those who don't know should know that a one percent payout in the Plan at least is a four percent increase at the retail level. And somebody glibly says, "Put some more money in at every level." Do you think Direct Distributors are going to do flipflops over getting twenty-six percent instead of twenty-five? I don't think so. But I can show 'em how to get an extra fifty or sixty percent if they'll get out and sell some merchandise. I guess if I'd been told all these years you don't have to sell the product, all you have to do is wholesale it to people, then I guess maybe I wouldn't pay any attention to pricing, either. But that's an illegal business. And those of you that preach it and foster it and talk about it are operating illegally. I don't know how often I have to tell you that. I don't know how long I have to keep insisting that you talk upon people retailing the product and gaining customers and servicing them faithfully, only to have some of you just throw it up in the air and say, "That's not our way. We don't teach that method." I got to tell you, you're running the wrong method. You see, once you'd accept the fact that you must sell the product at retail to have an honest business, then you suddenly are very concerned about the pricing of the product. And once you understand that, you don't just glibly say, "Oh, take it out of the corporate coffers; just raise the price a little bit;" because those dollars do not exist there.
Somebody says, "You guys make a lot of money." That's right. And when you have a billion dollar a year business, you'll make a lot of money. But I'll tell you, We didn't make a lot of money by operating a hundred thousand dollar a year business and seeing how we could suck it dry. We built a billion dollar a year business. And when you work towards getting products retailed at that level, I'll tell you, we'll make money in this business. The problem is, some of you are trying to figure out how to make a lot of money without gettin' the volume that you need.
Somebody said, "I want to make more money." Let me tell you how. I don't have an extra one percent for you. I got an extra fifty-five to sixty-five percent for you. I'll tell you, folks, you can't beat that. But some of you have got a warped viewpoint of what makes a business operate; and once you get back to the idea that your business will grow in direct relationship to your ability to retail products, then you'll overcome the biggest mental handicap you have right now. And,
The other question always comes up, you know, and
Here's one of those letters: "We thought we voted on the Board to represent us." Well, you voted for people on the Board to do certain things and, indeed, to represent you and, indeed, to present your viewpoints and, indeed, to bring your opinions to us on all legal issues. But, whoever told you, and all those of you who say, "It should have come to the Board," whoever told you that doesn't know the law. Oh, they're experts. But
Now, you know, this is a very complex business world we live in, so let me put it to you real fast and straight. The Board is, indeed, an organization that represents your viewpoints. It indeed does visit with us on this business. But some of your so-called experts, who are telling you that it should have gone to the Board, don't know, is that for this company to discuss with the Board pricing on any product is a federal offense. It is known as price fixing. And we have a little experience with that and the FTC, by the way, that maybe your leader didn't tell you about or he forgot about it.
Maybe you've been reading in the papers lately about the president of a major airline, who casually said to his competitor, "Why don't you raise your prices twenty percent, and I'll raise mine?" And he has now been charged with a federal crime. Simple little statement. And, so, whoever told you that you must insist we bring it to the Board doesn't know what they're talking about.
But, you know, there's problems beyond that one. Let me just bring up another little side issue for you, and not too incidental. Some of you are screaming at us on the twenty percent. Some of you self-righteously say, "Oh, we have less than twenty percent in tapes and books and side issues in our other business." The Amway Corporation does in excess of a billion. If we only did ten
Let's assume we're taking out a hundred million dollars a year. We have placed a maximum on tapes and books at two hundred million that we would allow. I don't know what you might allow. But when you get into those kinds of numbers, if you want to hear a scandal, just read about it in the papers. You present wonderful numbers on the blackboard about all the money they can make. Maybe you ought to tell them about all you're going to take from them before they make any. Maybe that would be the rest of the story. But, you see, those are fantastic numbers. Our legal people tell us, "Boy, if it gets over ten percent!" Finally, they agreed, that maybe somewhere between ten and twenty is acceptable. Maybe that would be considered reasonable by governmental authorities. We assume it will be. We really hope it never gets to those numbers.
We didn't start out with BV on tapes to get to those numbers. We didn't start out with it to capture the market. We put it in, by the way, to be a competing force and to draw your attention to the kind of potential abuse that we thought was there, which we now know is there, with a kind of power and pressure I never believed; and I am not going to take all afternoon to read you the horror stories of the people who say, "I'm connected with such and such a system. I have $8,000 worth of their tapes in my basement. They will not take them back," and the others who were told to mortgage their houses, cash in their life insurance, told to go to the bank to borrow because this big weekend seminar was so important. Well, that's extracting money.
Let me talk to you about the legal side, beyond price fixing, that deals with pyramids, that deals with the illegal operation of a business that does not have an end consumer, where the product is not retailed. That would include all books and tapes. The sad news, folks, is that when those things go out that way and they become excessive, beyond my ten or twenty percent theoretical guideline, hopefully acceptable, to where it's a reasonable support system, but not beyond the reasonable element, then it becomes an out and out illegal pyramid. Why BV on tapes? That's why. It was time to bring some reasonableness to all of this. We also didn't take it to the Board, by the way, because we didn't really want to put a Board member on the spot. We have Board members who operate pretty big systems. It would have been a kind of an embarrassment to put him in the crossfire; so we just decided not to even discuss it at that level. Despite the fact that it would have been illegal to do so, we just decided it would have been the wrong place to talk about it, because we had to move to tend to some of the problems that I've just been discussing with you.
Well, let me pause a minute and look through my grab bag of mail a minute and see if I can't find if
And, now, let me give you some of the other expressions that I've received
If the tape business becomes substantial and earns substantial dollars, I have a couple of choices, one of which is to lower the prices; because we want to keep it at a reasonable level. Why? Because the goal of Amway has always been one, and that is to give the average guy on the street, who's scared to death of his mother-in-law, a chance to make a new beginning. That's the principle. We didn't start this business to see what we could take from him. We started this business to see what we could help them achieve; and I'm afraid some of you got the business backwards. I'm not sure some of you are in the Amway business. You really don't care whether that guy achieves. You like to think you do. You give me long letters about
Our achievement numbers haven't changed at all with this tremendous burden of systems. I and you cannot prove an any higher ratio of achievement than you had before. Are they better people for it? Possibly. Is it a good way of communication? Absolutely. Does it help get good ideas through the organization quickly and effectively? You bet your life it does. And, therefore, it is a helpful device.
Don't get me wrong. Don't say I said tapes were bad. I have never said tapes were bad, because we sold 'em long before you did. We think they're a super means of communication. Do I have a problem with big meetings and rallies? Lands no. I was putting on big meetings and rallies before some of you ever got out of your diapers. I made speeches on that stuff thirty years ago, before huge meetings. Some of you act like that's all new stuff. That's not new stuff. It's only a question of how you operate it and where you price it and whether the people feel it's worth it. And I've got to tell you, you got to review that carefully. And a little competition will help keep you in line, too.
We11, let's try another one, since I am so greedy. "Why didn't you do it sooner? Why do it now? It will be devisive." Now, those are good questions. We been lookin' at it for three or four years. Three years ago we talked about it. Some of you sent letters, said, "Why don't you put BV on tapes?" I can remember some of you guys who were in big tape programs begging us to put BV on tapes years ago. We considered it. We kept thinking the problem would go away. We thought competition between the people and the field would keep the pricing down. But it didn't work that way.
There was a subtle pressure put into this organization that I never felt would exist. I watch people being intimidated, threatened, coerced, scared. My mail has got in it letters from people who didn't sign it. One man started, "This comes from John Doe. If I told you who I was, I would be threatened; because I have been told never to talk to the company. My upline is my source of all guidance and information." Hey folks, that's scary. That is intimidation. If I only had one letter like that, I might have dismissed it; but I had many more than one. And I have many others who signed their name, but spoke of the same pressure, fear.
You know, we didn't put BV on tapes to really get into all this; but I'm sure glad we did, because it brought a lot of things out in the open for us to deal with today that really need tending to. And you will find that, by the way, as one of my Ten Points, in not putting on pressure. Why do it now? Because now is the hour. Because if we waited longer, in our opinion, the problem would have gotten worse.
And, then, the next one: "What will you do next? You act like a dictator" You know what? I don't know what I'm going to do next. We haven't discussed our next step, other than policing the abuses in this business. What will I do next? Whatever it takes to clean up this business. That may well represent a loss in volume. We may be seeing some of that right now. But that's okay with us. We accept that.
It is our firm belief that unless we clean up our abuses, we won't have to worry about what's next; we won't be here to worry about it. At this point in our history, we will either take charge of this business and operate it correctly, according to the rules and regulations that the Amway Corporation has given you, or we will not deserve to exist. I do not wish to control your actions, your day-to-day work; but I don't want anybody else out in the field controlling them for you either.
You know, when you became a Direct, we offered you a chance to be free and independent; and then I read your mail, and I find out you've lost your freedom. And all we want to do is give it back to you, to be as big or as small in Amway as you want to, to make as much or as little as you like in the Amway Plan by working it, and to go to whichever meetings you want to, and to feel comfortable to stay home if you don't want to, without being branded a loser. "Winners go to the meetings; losers stay
There are no losers in Amway. There are people who choose not to do it; but who are you to tell some teacher that chooses to spend the rest of his life as a dedicated teacher that he's a loser? Who are you to tell a truck driver that chooses to spend more of his time doing things other than Amway, and maybe just drivin' his truck, that he's a loser? Whoever gave you a license to brand people? This business was designed to make everybody a winner, to do as much or as little as they wanted to; and if they chose to do nothing, to make them feel better for having had the experience. We only have winners in this business; and then we have some other winners who choose not to do the business. They just might be bigger winners in life than some of you that have branded them losers. I stand in awe of all people, and I hope you do, too.
Well, then, some more comes. "Most of us don't make money on tapes or rallies." Maybe that's true. Maybe that's the problem. Maybe only a few do. But the Amway business was designed so that everybody shared in the profits of the business. That's why we have a Plan that has balance to it. That's why there's three percent when you sponsor a Direct, because the Direct does the bulk of the work, and they get the bulk of the money. We do pay our bonuses forever, you know.
Somebody says, "Tapes can confuse us with different ideas." Yep. That's possible, I guess. Maybe if we all preached and taught the one Amway Plan, we wouldn't have any confusion. Maybe if we took it straight from the top, like it's supposed to be said, we would be busy motivating, not treating or dealing with cute technique that varies from the truth or the fundamentals. You know, one of the Ten Points deals with the curiosity approach. I've listened to a lot of you defend the curiosity approach for a long time because you said it
I guess I'm overwhelmed at the reaction to a simple action; but apparently we hit a hot button. What I hear some of you saying is that, "our other business is more important than our Amway business, and you better not touch it." Well, maybe you ought to get out in your other business; get out from under the cover of Amway and see how well you do. Sell motivation; get on the road; see who shows up. Virtually every company that tried it has gone broke, or at least disappeared. But I got to tell you, we got to get back to the fundamentals in the Amway business.
The thing I want most for you is to increase your income; but I don't know any way to do that, other than by increasing your volume. And I don't know any way to do that, other than by sponsoring some new people who get some customers and retail products on a regular basis. But I watched you skirt the issues. First you got afraid of selling; told people they didn't have to. Then some of you came along, and you didn't dare own up to the fact you were in the Amway business; so you had some cutesy names you contrived and kind of flew the Amway flag upside down, hidden under the basket someplace, snuck it in about an hour later, after the meeting began.
You know what I need to do? You know what we need to do? We need to get up front. We need to come up (to) people and ask them if they'd like to get in the Amway business. And if they say they know all about it, you and I know they don't know all about it, and we ought to get 'em down and give the Plan exactly the way Amway's givin' it to you to present. It's worked for twenty-three years; it'll work today; but it's got to be done in a new, honest and straightforward method.
I've not tried to say to you, you can't sell tapes or books or motivational aids to your people; but I am telling you that if your secondary business is other than a support mechanism in a reasonable volume level in relationship to your Amway business, it may very well be an illegal business. And that tells you one thing. If you believe in Amway, as we do, and all the work that's gone into it for all these years, then it's time to get back to protecting it.
And before I get too negative with all the people who've written me on the bad stuff, let me just thank all of those of you who said, "Hooray," "Hip Hip," and "Cheers." We need your help to preserve one of the greatest things that's ever happened in the last twenty-five
There are fundamentals that work in this business. It will not hurt your people to hear somebody else's way of doing it. Maybe you're afraid they'll hear a little different story than you been saying; because maybe what you been saying hasn't been right. It reminds me of the people who come and say, "Well, our people come home from the DD seminar all confused." And I kind of laugh, and I say, "Maybe you sent them confused, and we sent them home with the straight stuff." And I got to tell you, that's true.
I don't want all of you to feel guilty, but I hope those of you that are following the Ten Points feel good about knowing that Amway is on to it. We are dealing with it one by one. We are in contact, on a personal basis, with every person who's operating a system. We are pointing out to them their liabilities and their responsibilities and the legal implications of what they're doing, and asking them to correct it and change it immediately. We are finding some encouraging signs. I will wait and see, before I really am comfortable that the changes are being taken place.
When I wrote the Ten Points early one morning, sitting in Hawaii before a Diamond club, I wasn't quite sure whether I touched all the bases. It is now six weeks later; and whatever caused me to write those Ten Points convinces me today that we just about got 'em all. One guy says, "You need an eleventh point." He says the eleventh point is to separate business and religion. He said that would complete the list. Well, maybe that is a good eleventh point, because it did all get mixed up; and we need your help straightening it out.
And, so, before I sign off, let me just read through my pack a minute and see what I'm missing; and then we'll turn you loose so you can go back tending to your Amway business, which involves sponsoring people and selling the products.
Let's just see if I can't pick up on a few of the items we may have missed
We had talked a little bit, you know, about pricing and why we didn't go to the Board with it, and I explained that to you, I think, legally. But, you know, this company has always done the pricing and the placing of BV. It has never, in all of its history, been a Board decision, and certainly, under today's climate, could not be so.
I do read some letters, here, that talk about 'us' making money on all of these things. We really have designed and priced a great many of our materials to where we cover our costs, and that's about it. All of our sales kits are sold exactly at what it costs us. Then I receive a letter here from some Distributor, who operates with one of you, told he cannot get an Amway kit until he buys their starter pack. Let me just read it to you.
He says, "My concern lies in two areas. The most recent event occurred last evening. Our sponsors told us that (and it's and an 'Emerald' under 'so-and-
Here's another one that says, "I am also stating certain procedures that occurred in the (so-and-so group). Only Crown tapes were available at the center. You could not purchase starter kit until you purchased starter pack one on product, product pack two and product pack three. You could not purchase a starter kit until you had someone to sponsor. You could not purchase a starter kit until you purchased the Crown's flip chart." Who says so? Sombody's writin' the rule book to force merchandise under what they think is a very good system, I'm sure. It's not the Amway Plan. The Amway Plan says you, as a new person, have a right to do whatever you like.
Somebody else, in a letter here, said, "I love your
Something's gone wrong; and I need your help, as a Direct Distributor, to agree to come back on those simple fundamentals. Help me do these things, will you? Let's get rid of all the illegal literature that misrepresents this Plan; burn it; throw it away; hide it. I don't care what you do with it. Get rid of it. All the things that you have that tell how to present the Plan, whether tapes or books or pamphlets
Unplug. I get a lot of questions, now, about unplugging. "Well, I'm hooked up with so and so." You just deal with your upline. But as a Direct Distributor, take charge of your business. That's what you're supposed to do. You run your business as you think is right. And if you want to have some joint meetings with other Directs, have them. They'll be very helpful to you. Don't let anybody brow-beat you and tell you what you have to do.
Do not force books or tapes or tickets on anybody. Offer them, and if they want them, fine. Encourage them; do not force them. Be careful of high entry fees that you deliver on people when they join this business. Make sure you don't overstate or overclaim when you present this Plan. And don't tamper with BV.
Well, I would just encourage you to look back at the whole list and the Ten Points. But I did want to give you this special tape to bring you up to date. The Amway business is probably at a critical point. In our opinion, we will go through that new adjustment period, deciding whether we really want to be in the Amway business or whether our other things are more important to us. And each of you will have to make that decision.
The Amway organization has been here for twenty-three years. Our history goes back ten years beyond that. There is no way a company can arrive at a billion-dollar level of business, and do that year after year, unless it's doing something right. And, right now, we need to ask you to get back to tending to your Amway business and focus in on the tools and the methods that we have given you. And I am sure there's a lot of good leadership in the field; but, you know, remember who the real leader is, and that's you. And we are counting on you for your support to present this Plan according to the Ten Points and with all due respect for your upline and your line of sponsorship; but we look to you as a leader and as the head of your organization. And you have to do the things that are best for you and your Distributors.
And if there's anything we can do to help you, let us know. We're going to be on the road. We're going to be holding a lot more functions in the field. And we'll be trying to help you do the greatest job you can in presenting this Plan, honestly and with a great deal of integrity to everybody, everywhere.
We're going to look forward to seeing you at the meetings in the years ahead. And, someday, we'll all sit down and say, "Remember in 1983 when we had everybody going off in different directions, and nobody knew where they were going, and everybody was cross-grouping and seeing who they could sell a system to? And remember when you guys got tough then and told people they ought to get back to the Amway business and the principles and the fundamentals?" And we'll all have a good cup of coffee over it, and we will know that we will have passed a critical point and that we decided to get back at it. It's time. We need your help. I'm counting on each of you to do that.
Don't get mixed up in
I'm counting on you. We're lookin' forward to continued growth for you. And I'll be lookin' forward to seeing you on the circuit.
This is Rich, finishing off another version of Directly Speaking. Bye-bye.
CERTIFICATE
STATE OF OHIO )
) SS:
COUNTY OF HAMILTON )
I, KATHLEEN M. McCLELLAN, a Court Reporter and Notary
Public for the State of Ohio, commissioned and qualified, do
hereby certify that the foregoing fifteen pages constitutes a
true, correct and complete transcript of Directly Speaking, Rick
De Vos, Amway Cassette Series VA-2160, which was recorded in
stenotypy and transcribed by me.
IN WITNESS WHEREOF, I have hereunto set my hand and
notarial seal at Cincinnati, Ohio, this 15, day of November,
1984.
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