DeVos, Richard Marvin and Van Andel, Jay
DeVOS, Richard Marvin and Jay VAN ANDEL
DeVOS, Richard Marvin (b. 4 March 1926 in Grand Rapids, Michigan), and Jay VAN ANDEL , (b. 3 June 1924 in Grand Rapids, Michigan), founders of the direct sales company Amway, who in the 1960s expanded their company from an out-of-a-basement operation into one of the largest network marketing companies in the world.
DeVos was born to Simon C. DeVos, an electrical contractor, and Ethel R. Dekker, a homemaker. Van Andel was born to James Van Andel, a car dealer, and Petronella ("Nellie") Van der Woude, also a homemaker. They share a Dutch immigrant background and membership in the conservative Christian Reformed Church, characteristics that often are cited as the basis of the high value they have placed on hard work, honesty, and religious faith. They have worked together since meeting in 1940 as students at Grand Rapids Christian High School, when they struck up a friendship and a business arrangement in which Van Andel drove DeVos to school in exchange for twenty-five cents per week. After serving in the U.S. Army Air Corps during World War II, they tried their hands at a number of businesses and traveled together in the Caribbean and South America. Both attended Calvin College in Grand Rapids.
In 1948 a cousin of Van Andel's brought them into Nutrilite food supplements as "distributors" in a multilevel marketing system in which they earned profits selling products and earned bonuses recruiting new distributors. DeVos and Van Andel worked hard as Nutrilite distributors throughout the 1950s, learning the marketing system they later made so astoundingly successful in Amway. As the Ja-Ri Corporation they built a profitable network by recruiting more than 5,000 new Nutrilite distributors with a "vision of a free and prosperous future." During this time they both married; DeVos to Helen June Van Wesep on 7 February 1953, and Van Andel to Betty J. Hoekstra on 16 August 1952; started families (both couples had four children); and settled down in Ada, Michigan, outside Grand Rapids.
When Nutrilite became unstable in the late 1950s, DeVos and Van Andel acted quickly to protect their distribution system and in early 1958 established the American Way Association (later Amway Distributors Association) to provide security and cohesion to their distributors. They soon decided to develop their own products for distribution and in 1959 officially incorporated as Amway Sales and Amway Services. To build up the new business, DeVos and Van Andel developed a line of household and personal care products—commodities that were both inexpensive and used commonly. Among their first products were two bio-degradable detergents: Frisk (later LOC, for "liquid organic compound") and the highly successful SA-8, which contributed to their reputation as a soap company. Amway's commitment to environmentally friendly products made for sales success in the 1960s, as support for ecology increased. As their product line expanded, Amway bought out suppliers and moved manufacturing processes to Ada.
The company grew quickly and in 1964 merged its sales, services, and manufacturing divisions to form the Amway Corporation. Amway's physical plant had been expanded forty-five times by 1966, and estimated retail sales grew from $500,000 dollars in 1960, to $35 million in 1965, and $85 million in 1969. Amway distributors increased to 65,000 by 1964, and to 100,000 by 1969. Amway's expansion into international markets began with Canada in 1962, and England in 1964. Within thirty years there were more than 3 million distributors in dozens of countries on every continent.
During the 1960s Amway's network of independent distributors selling household and personal products was established as more than just a manufacturing and distribution company. To its two founders and millions of distributors worldwide, Amway came to represent "the American way of private ownership and free enterprise." DeVos and Van Andel drew thousands and then millions of new distributors to Amway with a means to earn extra income, to achieve "dreams" of financial independence. The "be your own boss" opportunity provided by Amway also appealed to an "outside the system" sensibility—particularly in an era dominated by enormous corporations such as International Business Machines (IBM) and General Motors. Amway also provided new distributors with a means to participate as more than mere consumers in the expanding economy of the 1960s, seen in discount merchandising stores, such as Wal-Mart and Target, and other successful direct marketing ventures, notably Mary Kay Cosmetics (1963).
Yet while DeVos and Van Andel's dream of "financial independence and personal freedom" was attractive to many, for others the evangelistic recruitment and management style at Amway seemed like a cult that took advantage of unwitting "distributors" to make money for the company. In Amway's direct sales or multilevel marketing structure, distributors are self-employed sellers of Amway products who earn a small profit on product sales to individual consumers. Opportunities for significant income come when a distributor sponsors a new distributor into Amway, thereby earning a bonus from Amway based on the sales of sponsored, or "down-line," distributors. A single sponsor is entitled to a percentage on every sale made in her or his down-line network and all the networks descending from it. Success is measured in sales, and bonuses increase as one's network grows and earns.
Aggressive recruitment and motivation of distributors were a large part of Amway's "business." In the early 1960s, with DeVos as the "charismatic motivator," the two founders personally traveled the United States in their Showcase Bus to reach a larger audience with Amway products and employment opportunities. The company developed a mixed reputation as a determined recruiter, with huge conventions and smaller sales meetings that were compared to evangelical revival meetings. The importance of expanding the force of distributors in Amway cannot be overstated, for it is only through constantly increasing networks of distributors that real profits are made.
In fact, Amway is a pyramid organization, which led to legal and image problems in the 1960s. In 1969 the Federal Trade Commission (FTC) began investigating Amway, and formal charges were brought in the mid-1970s. A ruling by the full FTC in 1979 declared Amway's marketing scheme to be legal, primarily because Amway's bonuses are based on actual sales, and merchandise can be returned to the company for a full refund. In another legal problem, Canada brought a suit against Amway for underpayment of import duties in 1970. DeVos and Van Andel maintained that they had done nothing wrong, but they eventually paid fines of over $25 million.
Amway's success continued after the 1960s, and through adapting products and international expansion it has maintained an almost constant pattern of growth. Amway's insistent distributor recruitment efforts have led to accusations of cultlike behavior and made Amway a topic for jokes on late-night television. In fact, DeVos led a top-down "cleanup" of distributorships running as illegal pyramids in the 1980s. DeVos and Van Andel continued to lead Amway, and in the mid-1990s both were ranked by Forbes magazine as among the ten richest people in the United States. They have dedicated their influence and money to numerous causes, including business organizations, conservative politics, and the arts. The landscape of Grand Rapids reflects their munificence in the Amway Grand Plaza Hotel, DeVos Hall, and Van Andel Arena, among other projects.
Both DeVos and Van Andel have written books about their successes with Amway. DeVos, Compassionate Capitalism: People Helping People Help Themselves (1993), offers advice for living and doing well in a Christian tradition; Van Andel, An Enterprising Life: An Autobiography (1998), gives many details of the Amway story. For a closer look at network marketing, see Rodney K. Smith, Multilevel Marketing: A Lawyer Looks at Amway, Shaklee, and Other Direct Sales Organizations (1984). Stephen Butterfield, Amway: The Cult of Free Enterprise (1985), offers a critical view of Amway. Charles Paul Conn has written a number of books sympathetic to Amway and its founders, the most factual of which is Promises to Keep: The Amway Phenomenon and How It Works (1985). For the most complete and engaging book on DeVos, Van Andel, and Amway, see Wilbur Cross and Gordon Olson, Commitment to Excellence: The Remarkable Amway Story (1986).