Amway North America

Amway North America

Company type	Private
Industry	Multi-level marketing
Predecessor	Quixtar
Founded	January 1, 1959 (1959-01-01) in Ada, Michigan, United States
Founder	Richard DeVos and Jay Van Andel
Fate	Rebranded from Quixtar to Amway Global in 2009
Successor	Amway Global
Headquarters	Ada, Michigan , United States
Area served	United States, Canada, Caribbean, worldwide (over 100 countries)
Key people	Steve Lieberman (Managing Director of Amway Global)
Products	Nutrilite nutritional supplements, XS Energy Drinks, personal care items, home cleaning products, air and water filtration systems, Artistry beauty products
Owner	Families of Richard DeVos and Jay Van Andel via Alticor
Parent	Alticor
Website	www.amway.com

Amway North America (previously known as Quixtar) is a privately held American multi-level marketing (MLM) enterprise established in 1959 in Ada, Michigan. The company is owned by the families of Richard DeVos and Jay Van Andel through the parent corporation Alticor. Amway's organizational framework encompasses subsidiaries such as Amway Global, Fulton Innovation, Amway Hotel Corporation, Hatteras Yachts, and Access Business Group, which specializes in manufacturing and logistics. Following its initial launch as Quixtar, Amway Global consolidated various operations under a single brand in 2009, replacing the original Amway business across the U.S., Canada, and Caribbean markets.

As a participant in the Direct Selling Association and accredited by the Better Business Bureau, Amway Global maintains a reputable position within the direct selling sector.

History

The origins of the company trace back to founders Rich DeVos and Jay Van Andel, who started Ja-Ri Corporation in 1949 as a multi-level marketing distributor for Nutrilite products. The business was formally incorporated as Ja-Ri in 1959 before adopting the name "Amway" in 1963. By 2012, Amway had expanded its operations to more than 100 countries worldwide. In 1999, the founders introduced Quixtar, an online MLM platform that gradually replaced Amway’s North American operations by 2001 as distributors transitioned to this new system. Both brands along with other ventures are owned by Alticor.

The decision to revert from Quixtar back to the Amway brand in North America was strategically aimed at enhancing brand recognition and market presence. Steve Lieberman, managing director of Amway Global, highlighted that this rebranding was essential to rekindle consumer and distributor awareness of the Amway name.

Products

In the United States and Canada, Quixtar serves as the sole distributor for Alticor’s product lines, which include Nutrilite nutritional supplements, XS Energy Drinks, personal care items, home cleaning products, air and water filtration systems, and Artistry beauty products.

Business model

Rather than relying heavily on conventional advertising, Quixtar’s sales strategy centers on person-to-person referrals; nonetheless, it initiated a multimillion-dollar advertising campaign in 2012. A significant share of its promotional budget is dedicated to bonuses awarded to Independent Business Owners (IBOs), who collectively received over $370 million in bonuses and incentives during fiscal 2006. These bonuses are calculated based on individual and team sales volumes rather than recruitment efforts.

In 2001, Quixtar succeeded Amway as the primary marketing entity for Amway/Alticor products within North America. Unlike the previous model under Amway, Quixtar facilitated online product ordering with direct shipping to customers. Beginning in 2007, Quixtar gradually phased out its branding in favor of Amway, supported by investments exceeding $580 million aimed at boosting IBO compensation and expanding advertising initiatives.

Purchases through Quixtar’s platform require an IBO referral number. IBOs have the option to develop personalized websites tailored to specific categories such as health, beauty, or gifts to promote sales. They benefit from retail or wholesale profit margins averaging approximately 30%, supplemented by bonuses ranging from 3% to 31% depending on sales volume; products exclusive to Quixtar yield higher profit margins.

IBOs grow their enterprises through retail transactions, referring customers to Quixtar.com, and recruiting others to establish similar businesses. Their income depends on their own sales performance along with that of their recruited teams. Registration involves a fee and participants engage with a compensation plan structured to reward both sales achievements and team expansion.

Earnings of Quixtar IBOs

Independent Business Owners (IBOs) affiliated with Quixtar derive their income from several streams: Immediate Gross Profit (IGP), Performance Bonuses, Leadership Bonuses, and Growth incentives. IGP represents the margin earned from direct retail sales to customers. Performance Bonuses vary between 3% and 25% of group volume (total BV) once an IBO surpasses 100 PV in a given month. Leadership Bonuses provide 4% of BV for each qualifying leg that achieves either 25% or 7,500 PV. Annual Growth incentives reward Platinum-level IBOs and above with bonuses and financed travel opportunities.

In 2005, the typical monthly income for an "active" Quixtar IBO was approximately $115, equating to around $1,380 annually. Those at the Platinum tier (comprising 0.1683% of IBOs) earned on average $47,472 per year, while Diamond-level IBOs (0.0120%) achieved average annual earnings of $146,995. The largest single annual bonus recorded was $1,083,421.

Despite these earnings data, Inter@ctive Week highlighted that commission payouts are relatively modest when compared to overall sales volume; with estimated sales reaching $6 billion in 1998 and a distributor base near one million, the average distributor income was roughly $6,000 per year. Success within the network heavily relies on personal relationships and direct in-person selling methods—a "high touch" business approach as described by Ken McDonald, Regional Vice President for Amway North America.

An "active" IBO is characterized as someone who has engaged in retail sales attempts, presented the business opportunity, received bonuses, or participated in company events within the previous twelve months. In 2000, approximately two-thirds (66%) of registered IBOs fulfilled this activity standard.

IBO Association International

Established in 1959 originally as the American Way Association, the IBO Association International (IBOAI) advocates for Independent Business Owners throughout North America. Its governance includes an 18-member Board of Directors supported by a staff of seven full-time employees. Board members are chosen through elections by voting members, reflecting an organizational structure focused on member representation.

Accreditation

In 2006, Quixtar collaborated with IBOAI to introduce the "Quixtar Accreditation" initiative aimed at companies offering Business Support Materials (BSM) to Quixtar IBOs. This accreditation is available to high-ranking IBOs ("Diamonds") and their associated training entities. The program enforces standards that prohibit promotion of religious or political content and requires disclosure regarding compensation tied to BSM revenues. These transparency requirements primarily impact Platinums and higher-level IBOs—a relatively small fraction of the total membership. Accreditation is valid for two years and involves periodic review of materials along with surveys conducted among IBOs, as detailed in the IBO Communications Platform. The first organization affiliated with Quixtar to achieve accreditation was "eFinity" in April 2006.

Sales and Ranking

Forbes placed Alticor as the 27th largest privately owned company in the United States with estimated revenues of $7.29 billion. In 2006, Internet Retailer recognized Quixtar.com as the leading website within the "health and beauty" category and ranked it as the 18th largest e-commerce platform by revenue.

During the fiscal year ending December 31, 2006, Quixtar-supported IBOs generated revenues totaling $1.118 billion—marking their fourth consecutive year exceeding the $1 billion threshold. Moreover, these IBOs contributed a record $84.6 million to Quixtar’s Partner Stores in 2006, highlighting robust business expansion and significant market presence within their sector.

Promotion

Several prominent athletes have served as endorsers of Quixtar products, including Jamaican Olympic sprinter Asafa Powell, American pole vault competitor Jennifer Stuczynski, sprinter Sanya Richards, Olympian snowboarder Shaun White, Chinese hurdler Liu Xiang, Brazilian football icon Ronaldinho, heavyweight boxing champion Evander Holyfield, and Heisman Trophy recipient Ron Dayne. Tim Foley, a member of the undefeated 1972 Miami Dolphins squad, holds the title of Quixtar Founders Crown Ambassador.

Tim Foley, who operates as a Quixtar Independent Business Owner (IBO), has openly supported the business opportunity offered by the company.

Leadership expert John C. Maxwell, recognized for The 21 Irrefutable Laws of Leadership, collaborated with Jim Dornan—the founder of the Quixtar-affiliated support organization Network TwentyOne and also a Founders Crown Ambassador—to write Becoming a Person of Influence. Additionally, former IBOAI board members Orrin Woodward and Chris Brady co-authored the bestseller Launching a Leadership Revolution. Both individuals were subsequently dismissed by Quixtar and became involved in a class-action lawsuit alleging unlawful recruitment practices.

At the 2003 Quixtar LIVE! event, guest speaker Phil McGraw ("Dr. Phil") reportedly described Quixtar as "one of the greatest success stories in American business history." In 2006, McGraw resolved a class-action lawsuit concerning his Shape-Up diet products, which resulted in plaintiffs receiving $6 million worth of Quixtar-branded Nutrilite vitamins alongside $4.5 million in cash compensation.

Orlando Arena naming rights

In December 2006, Amway acquired the naming rights to Orlando Arena, home venue for the NBA's Orlando Magic, renaming it Amway Arena. This agreement included exclusive first negotiation rights for naming the arena’s replacement. Subsequently, in August 2009, Amway secured a 10-year contract to name the new venue Amway Center.

On December 20, 2023, through a partnership with Kia America, the Amway Center was renamed the Kia Center.

San Jose Earthquakes

Prior to the start of the 2009 MLS season, Amway Global entered into a three-year sponsorship agreement as the official jersey sponsor for the San Jose Earthquakes. This partnership focused on community engagement within the Bay Area, including backing the team’s Kicks for Kids initiative, which promotes fitness and healthy living among disadvantaged youth.

The collaboration also introduced the Amway Global Street Team, which actively participated in Earthquakes home matches and local events by distributing branded merchandise and showcasing soccer techniques.

By 2012, Amway concluded its sponsorship arrangement with the Earthquakes.

Los Angeles Sol

In March 2009, Amway Global signed a multi-year agreement to be the official presenting partner of the Los Angeles Sol in Women's Professional Soccer. However, this partnership lasted only one season as the Sol ceased operations after the conclusion of the 2009 season.

Litigation

Quixtar faced legal action involving former Crown Distributor Kenny Stewart and Double Diamond Brig Hart’s tools enterprises; however, a federal judge dismissed this case in February 2008.

In 2007, a class-action lawsuit accused Quixtar of fraud and racketeering, alleging that its products and tools businesses functioned as pyramid schemes. A similar lawsuit filed by terminated TEAM-affiliated IBOs was also dismissed. On November 3, 2010, Amway consented to a $56 million settlement—comprising $34 million in cash and $22 million in products—while denying any wrongdoing but agreeing to modify its business practices. The overall economic effect of these changes was estimated at $100 million.

Former Quixtar IBO Eric Scheibeler asserted in his book "Merchants of Deception" that he had received death threats from uplines. In response, Amway and Quixtar filed defamation lawsuits against him in 2007 due to implications involving company personnel. Scheibeler later issued a letter clarifying that he had no knowledge of threats made by Doug DeVos or other company employees.

FTC investigations

The Federal Trade Commission offers criteria to help distinguish MLMs that may operate as pyramid schemes. In the 1979 case In re. Amway Corp., the FTC concluded that Amway, the precursor to Quixtar, did not constitute an illegal pyramid scheme because compensation was not based on recruitment alone. Both Amway and later Quixtar required distributors to sell products to a minimum of 10 retail customers each month or achieve $100 in product sales (equivalent to 50 PV) to be eligible for bonuses derived from their downline’s volume. To qualify for these bonuses, IBOs must submit customer volume data through Quixtar.com and personally sell or consume at least 70% of their purchased inventory. These stipulations are designed to prevent inventory loading and misuse of the marketing framework.

In 1986, Amway consented to a $100,000 civil penalty under a decree for breaching a 1979 FTC order that prohibited misleading earnings claims by distributors. The FTC complaint highlighted advertising earnings projections without transparent disclosure of average incomes or the proportion of distributors achieving such results. Since then, the FTC has mandated that prospective Quixtar business owners receive information about average income levels.

Income from tools and business support materials

In 1983, Rich DeVos, one of Amway’s founders, addressed concerns regarding top-level distributors generating significant income from Business Support Materials (BSM), including tapes, CDs, books, and seminars. He announced that while Amway would award Business Volume (BV) for produced tapes, BV payouts on BSM would be capped at 20% of a distributor’s overall BV to maintain a balance between tool-related earnings and product sales.

A 1985 Forbes feature cited IBO Dexter Yager stating that approximately two-thirds of his income was derived from BSMs. Later, in 2004, Dateline NBC reported that some high-ranking Quixtar IBOs primarily earned through motivational materials rather than product sales. Quixtar responded by publishing an official rebuttal online and noted that Dateline declined their offer to provide a link to this response.

During IBO enrollment, contracts explicitly specify that purchasing BSMs is voluntary and that sellers may either profit or incur losses from these materials, similar to any other business venture. This information is also publicly available on Quixtar’s websites. Furthermore, Quixtar’s Business Support Materials Arbitration Agreement obligates sellers to repurchase BSMs bought for personal use within 180 days under reasonable conditions; however, BSMs acquired for resale purposes are exempt.

Disputes with TEAM

On August 9, 2007, a group of distributors affiliated with TEAM training—including its founders—filed a lawsuit against Quixtar contesting the enforcement of distributor agreements containing non-competition and non-solicitation provisions. The plaintiffs accused Quixtar of functioning as a pyramid scheme and restricting distributors’ freedom to exit.

The next day, Quixtar terminated the businesses of fifteen involved plaintiffs and obtained a temporary restraining order barring them from disrupting company operations, soliciting IBOs for their new enterprise, or making disparaging remarks about Quixtar. By October 2007, Quixtar alleged that these former distributors had breached the court order by continuing meetings and distributing motivational content using proprietary information. Nonetheless, the court sided with TEAM founders Woodward and Brady, permitting them to continue their activities.

Quixtar also initiated legal action against 30 anonymous bloggers to investigate potential defamation campaigns linked to Woodward and Brady; this lawsuit was dismissed in October 2007.

In 2009, arbitration held Woodward and his wife responsible for encouraging distributors to resign and join competitor MonaVie, ordering them to pay $12.7 million in settlements. Co-defendants Chris and Terri Brady were ordered to pay $9.6 million while Tim and Amy Marks faced $3.5 million in settlement payments.

Google bombing

During the summer of 2004, a number of Quixtar leaders along with Independent Business Owners (IBOs) reportedly launched an online initiative aimed at enhancing the visibility of their websites in search engine rankings, employing a strategy commonly referred to as Google Bombing.

See also

• Amway
• Amway Australia

References

Notes

• Steinert-Threlkeld T. An Amway By Any Other Name. Inter@Ctive Week [serial online]. July 5, 1999;6(27):52. Available from: Academic Search Premier, Ipswich, MA. Accessed November 21, 2012.
• Emrich, A. (2009). Amway Global continues its push for more exposure. Grand Rapids Business Journal, 27(8), 3.

External links

• Amway's corporate website
• Amway Independent Business Owners Association

Media articles

• CNET coverage of Quixtar launch
• New York Times report on Quixtar launch
• eWeek – Quixtar: Cleaning Up
• Taipei Times article regarding Quixtar "Ditto" Program
• Coverage of Quixtar lawsuit against bloggers

Government documents

• FTC Decision on Illegal Pyramid Schemes
• Western Michigan BBB Reliability Report