Leap of faith | Outlook Business
Home  /  HARDBOUND  / Leap of faith | DEC 26 , 2014

HARDBOUND

Leap of faith
An Extract from Rich DeVos's Simply Rich

The air was filled with uncertainty and concern. Our livelihood — not to mention thousands of other independent Nutrilite distributors — depended on a large organisation out in California that now was fractured and struggling. We faced a serious breakup between Mytinger & Casselberry, Inc. — which controlled the sales plan that compensated distributors — and Nutrilite Products, Inc. — the sole manufacturer of the products that distributors sold. Sales were falling after the new FDA restrictions, and both companies were trying to figure out what to do and how to lick it. They both concluded one answer might be to offer additional products, so Nutrilite introduced the Edith Rehnborg line of cosmetics, named for the wife of Carl Rehnborg. But Mytinger & Casselberry decided to have just a face and skin care line instead of a full cosmetics line. They thought that would be simpler for distributors to manage, with fewer products and sizes. Mytinger & Casselberry were basically correct, if skin care products were all distributors had to offer, but they were not thinking beyond the moment.

With the insecurity of a manufacturer and distributor being at odds with each other, Jay and I decided the time had come for us to start a company that avoided these pitfalls and protected the distributor groups. We were confident we could get started by continuing to use the sales plan and marketing system that helped us succeed as Nutrilite distributors. We would continue selling Nutrilite products but also knew we would need to add a product or two of our own. We had long been touching on the subject of starting our own company and the time for that was now.

Jay and I at this point had personal reasons for needing to continue making a good living in a business of our own. We no longer were two young buddies on an adventure together. We both were married with children.

In the midst of all this uncertainty, we decided to make another leap of faith in our business lives. We scheduled one of our regular retreats for our distributors and agreed this meeting would be our opportunity to announce our plans. This would come as a great surprise to them, so by this being a regularly scheduled retreat we avoided the ‘I guess you’re wondering why we called this meeting’ situation.

We held the retreat in the summer of 1958. We announced our plans and promised to anyone who wanted to join us that we would protect the business relationship between Nutrilite distributors in the line of sponsorship. We also formed a board of some of the top people in attendance who would join us in discussing this new venture and what it might look like.

As a name for our board, we settled on the American Way Association. We believed that many people in this country would like a business of their own. Surveys found that owning a business was a strong desire for most Americans, but few ever achieved that dream. So we wanted our new venture to be one that put people in businesses of their own but in which they would not be alone. They’d have our support and the support of the Amway line of sponsorship. So that became our whole theme. What could be more American than to be free to own a business within the free enterprise system that had powered America’s economic system from its beginnings? The name American Way Association eventually became a little long to handle, so we kept that name for the board and operated as a company under the shortened name Amway. 

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