Direct sales pitch: Amway angles for a comeback in U.S.

Executives figure negative perceptions about Amway have faded.

ADA, Mich. (AP) — Once a household name and reputedly the key to great fortune for modern salesmen hoping to live out a Horatio Alger myth, the Amway brand faded from the American market years ago, tarnished by legal and regulatory problems.

The direct seller of everything from health and beauty items to household cleaners repeatedly fought allegations that it was a pyramid scheme. The company also paid $20 million in fines in a Canadian criminal fraud case in 1983.

In 2000, after Amway became part of an umbrella company called Alticor Inc., the Amway name was dropped in the U.S. and Canada. The hope was that the company could emerge wholly remade in the world of online sales under a new moniker: Quixtar.

Now, as Amway’s 50th anniversary approaches in May, Alticor is retiring the inert Quixtar label and pouring millions of dollars into reviving the Amway brand in North America with market research, national television commercials and ads in newspapers and magazines and online. The company will use a transitional name, Amway Global, before reverting in about a year to Amway.

“We thought, well, if we’re going to build a brand, build the brand that everybody knows already,” Alticor president and co-CEO Doug DeVos said in an interview with The Associated Press. “It’s going to be much more successful and cost a lot less and happen a lot faster.”

Despite predictions of continuing economic gloom, Alticor executives hope to repeat in the United States the kind of growth they’ve seen abroad in the past — and to revive the mystique that helped the company spread throughout the Midwest. By the mid-1960s, U.S. Amway’s hundreds of thousands of distributors dreamed of getting rich by selling cleaning products and by recruiting others to join the fold.

Still operating on that basic model, including prices that tend to be higher than those of their competitors, Amway saw global sales revenue top $7.1 billion in fiscal 2007. The company predicts another $1 billion increase this year. And most of its recent growth, in such developing Asian markets as China, India and Russia, has been under the Amway name.

“In the late 1980s, about three-quarters of our business was here in the U.S.,” says Steve Van Andel, Alticor’s chairman and co-chief executive and — like DeVos — the son of one of Amway’s founders. “Now about 80 percent of it is outside the country.”

The company is gambling that consumers at home, where sales have been flat for years, will remember the days when Amway was known less for scandal and more for unrelenting pitches from well-scrubbed and optimistic door-to-door salesmen.

Marketing experts say that, despite the baggage attached to the brand, the company is doing the right thing by bringing Amway back to North America in a campaign that launched in March and first made a splash in October with sponsorship of a Tina Turner concert tour that concludes in April.

“My sense is that many of the negative associations of Amway have now begun to fade,” says Tridib Mazumdar, a marketing professor at Syracuse University.