DC Velocity - IdeaBook 2017

For decades, many manufacturers have subscribed to the idea that outsourcing production to contract manufacturers in low-cost countries is the best strategy. That approach makes sense for those whose main objectives are to keep costs as low as possible and profits as high as they can. But not every company’s manufacturing strategy is motivated solely by such cut-and-dried concerns as cost and efficiency. For some, the guiding principles are more complex and nuanced.

One of those is Amway, the Ada, Michigan, USA-based
manufacturer of nutrition, beauty, personal care, and home
products. Amway operates on a direct-sales model; its
products are typically sold and delivered to consumers by
individual entrepreneurs called Amway Business Owners.
From its earliest days, Amway’s founders, high-school pals
Jay Van Andel and Rich DeVos, wanted their company to
provide a means for individuals to provide for their fami-
lies and forge their own economic futures. As the company
notes on its website, “all people, regardless of education,
economic background, or professional experience, can
become an Amway Business Owner and build their busi-
ness by selling Amway products.”
The company—still family-owned and led by the found-
ers’ sons, Chairman Steve Van Andel and President Doug
DeVos—emphasizes that it provides training, tools, and
support to help these entrepreneurs succeed, no matter
where in the world they are located. That commitment to
the success of Amway’s distributors, together with a com-
monsense philosophy about when to make and when to
buy, have shaped Amway’s global manufacturing strategy
and helped it to become the world’s biggest seller in several
of its product categories.