Jay Van Andel and Rich DeVos, friends since school days, had been business partners in various endeavors including a hamburger stand, air charter service, and a sailing business.

In 1949 they were introduced by Neil Maaskant (Van Andel's second cousin) to theNutrilite ProductsCorporation.Nutrilitewas a California-based direct sales company founded by Dr.Carl Rehnborg, developer of the firstmultivitaminmarketed in the United States.

In August 1949, after a night-long talk, DeVos and Van Andel signed up to become distributors for Nutrilite food supplements. They sold their first box the next day for $19.50, but lost interest for the next two weeks. Shortly thereafter, at the urging of Maaskant, who had become their sponsor, they traveled to Chicago to attend a Nutrilite seminar. The meeting was at a downtown hotel, with over a hundred people in attendance.

After seeing promotional filmstrips and listening to talks by company representatives and successful distributors, they decided to pursue the Nutrilite business opportunity with enthusiasm. They sold their second box of supplements on their return trip to Michigan, and rapidly proceeded to develop their new business further.

In 1949, DeVos and Van Andel had formedJa-Ri Corporation(abbreviated from their respective first names) for importing wooden goods from South American countries. After their trip to the Nutrilite seminar, they dropped this business and Ja-Ri became their Nutrilite distributorship.

In addition to profits on each product sold, Nutrilite also offered commission on the sales of products by new distributors introduced to the company by existing distributors – a system today known asmulti-level marketingornetwork marketing.

By 1958, DeVos and Van Andel had built an organization of over 5,000 distributors.

In April 1959 they formedThe American Way Associationto represent the distributors and look for additional products to market.

The motto was: "You can do it, too."

Their first product was calledFrisk, a concentrated organic cleaner developed by a scientist in Ohio. DeVos and Van Andel bought the rights to manufacture and distribute Frisk, and later changed the name to LOC (Liquid Organic Cleaner).They subsequently formedAmway Sales Corporationto procure and inventory products and to handle the sales and marketing plan, andAmway Services Corporationto handle insurance and other benefits for distributors (Amway being an abbreviation of "American Way").

In 1960 they purchased a 50% share inAtco Manufacturing Companyin Detroit, the original manufacturers of LOC, and changed its name toAmway Manufacturing Corporation.

In 1964 the Amway Sales Corporation, Amway Services Corporation, and Amway Manufacturing Corporation merged to form a single entity,Amway CorporationAmway bought control of Nutrilite in 1972 and full ownership in 1994.

Alticor

In 1999 the founders of the Amway Corporation established a new holding company, named Alticor, and launched three new companies: a sister (and separate) Internet-focused company named Quixtar, Access Business Group, and Pyxis Innovations. Pyxis, later replaced by Fulton Innovation, pursued research and development and Access Business Group handled manufacturing and logistics for Amway, Quixtar, and third party clients.

The main difference was that all "Independent Business Owners" (IBO) could order directly from Amway on the Internet, rather than from their upline "direct distributor," and have products shipped directly to their home. The Amway name continued being used in the rest of the world.

International expansion

Amway expanded overseas to Australia in 1971, Europe in 1973, parts of Asia in 1974, Japan in 1979, Latin America in 1985, China in 1995, Africa in 1997,[S1]India and Scandinavia in 1998, Ukraine in 2003, Russia in 2005, and to Vietnam in 2008.

Amway owns a patent on the online shopping method of Ditto Delivery, which allows consumers to specify an automatic monthly delivery of each product.In May 2001, Ditto Delivery accounted for 30% of Quixtar's North American sales.

Environmental initiatives

Amway emphasizes the environmental benefits of many of its products, and in June 1989 the United Nations Environmental Program's Regional Office for North America recognized it for its contributions to the environment.

Amway utilizes a tiered distribution and remuneration model (the AmwaySales and Marketing Plan) that promises to reward participants who grow Amway's market share through a combination of sales and recruitment. This tiered distribution model relies on Independent Business Owners (IBOs) acquiring and training further Independent Business Owners, which is the principal characteristic of apyramid scheme.

Harvard Business Schoolof Leadership, which described Amway as “one of the most profitable direct selling companies in the world", noted that Amway founders Van Andel and DeVos:

"...accomplished their success through the use of an elaborate pyramid-like distribution system in which independent distributors of Amway products received a percentage of the merchandise they sold and also a percentage of the merchandise sold by recruited distributors."

The "pyramid-like distribution system" of the Amway business model led to Amway being accused of being a pyramid scheme. A 1979 US Federal Trade Commission rulingestablished that the Amway business model is not illegal in the United States.

In a 1979 ruling,theFederal Trade Commissionfound that Amway does not qualify as a pyramid scheme because distributors were not paid to recruit people and did not have to sell products to get bonus checks, and the company was committed to buying back its distributors' excess inventory.

---

By Adam Bernstein

Washington Post Staff Writer Wednesday, December 8, 2004;

Jay Van Andel, 80, the zealous entrepreneur who became a billionaire when he co-founded Amway, the direct-selling business that told millions of Americans they could be apostles of free enterprise, died Dec. 7 at his home in Ada, Mich. He had Parkinson's disease.

Few other American companies of universal name recognition were shrouded in such cultlike secrecy as the privately held Amway, part of a pervasive legend of the business, despite occasional efforts to make its activities more transparent.

Amway's founders navigated the company through government investigations and allegations of fraud and deceptive sales practices, as well as books critical of the company's methods.

Mr. Van Andel, the son of Dutch immigrants, was born June 3, 1924, in Grand Rapids, Mich., where his father ran an automobile agency. He was raised in the strict Christian Reformed Church, and his parents embraced its values in memorable ways. He once said that as a child, he had found a dime in an alley, and his mother forced him to take it from house to house before she would allow him to claim it.

After serving in the Army Air Forces during World War II, Mr. Van Andel literally flew into business.

Mr. Van Andel's son Steve succeeded him as Amway's chairman in 1995. The Ada-based company has 13,000 employees and millions of distributors worldwide, operating in more than 80 countries and territories around the world. Its parent company, the privately held Alticor Inc., had worldwide sales of $6.2 billion for the year ending Aug. 31. [S2]Asia – and China in particular – is now its primary market.

Mr. Van Andel and DeVos were among the biggest philanthropists in the country, including giving gifts to civic restoration projects in Grand Rapids and the creation of a foundation to support charities, hospitals and schools. They also once underwrote the National Symphony Orchestra on a $250,000 European tour and lavished money on conservative Republican causes.

Mr. Van Andel was chairman of the U.S. Chamber of Commerce in 1979 and 1980. In the late 1970s, Amway bought the Mutual Broadcasting System, with its 950 affiliated radio stations, to provide what he called a "balanced" political viewpoint. The radio system was sold in 1985.

Mr. Van Andel, who saw himself as a clean-living, Christian fundamentalist, also gave more than $500,000 to an eponymous creationist scientific institute in the desert of northern Arizona. One scientist there was trying to prove that God created the world in six days.

"For me, the greatest pleasure comes not from the endless acquisition of material things, but from creating wealth and giving it away," he wrote in his autobiography, "An Enterprising Life" (1998). "The task of every person on earth is to use everything he's given to the ultimate glory of God."

Mr. Van Andel's company speeches were similarly filled with exhortations to God and country. In his private life, he often spoke of Scripture around the dinner table and taught his children, all of whom entered the business, about valuable lessons he had learned on the job.

"Sometimes the dining room took on the character of an M.B.A. classroom," he wrote in his memoir.

A silver-haired and sturdy man – the very model of the assured businessman –he also shared in his book more piquant tales of his family life, such as the time the outhouse exploded at his family retreat in northern Michigan. He had tried to fix the gas-fired disposal system just before his speaking engagement at a Chamber of Commerce function. He was dressed all in white, from shirt to shoes.

"Most of our summers were not marked by exploding outhouses, however, and we enjoyed wonderful times together as a family," he added.

His wife of 52 years, Betty Hoekstra Van Andel, died this year at their home in the British Virgin Islands.

Survivors[S3] include two sons; two daughters; and 10 grandchildren.

, Van Andel was a lifelong advocate of free enterprise. He was Past Chairman of the U.S. Chamber of Commerce, Director of the Jamestown Foundation, U.S. Ambassador and Commissioner General to Genoa Expo ’92 and Trustee of the Heritage Foundation. In his hometown of Grand Rapids, Michigan, he was the founder of the Van Andel Institute for Education and Medical Research, founding Chairman of the Right Place Committee, and through the Jay and Betty Van Andel Foundation, contributed to significant community projects in economic development, health care, education and the arts.

DeVos is a renowned speaker and author of four books, which are: Believe!, Compassionate Capitalism, Hope from My Heart: Ten Lessons for Life, and Ten Powerful Phrases for Positive People. He has also owned a number of professional sports franchises, including the Orlando Magic of the NBA.

With a ranking by Forbes Magazine of 239, Richard DeVos' fortune does not come near the top international earners. But with an amassed $5.1 billion, the Amway founder is the 71st richest man in the country, ranking number one in Michigan.

And yes, they do call him Rich...