Amway: A Family Tradition Continues
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Steve Van Andel and Doug DeVos head Amway, a $10.9 billion direct selling company started by their fathers in 1959. Van Andel, U.S. Chamber vice chairman, sat down with Free Enterprise during a visit to the Chamber to discuss growth and innovation, overseas markets, and regulatory hurdles. This interview has been edited for clarity and length.
FE: What was the impetus for expanding beyond Amway’s traditional distributor business model and introducing brick-and-mortar branding centers and advertising in the United States?
VAN ANDEL: We sat down and talked about this [change] a few years ago because we’ve had a great strategy of geographic expansion. We had gotten into most of the markets where we wanted to be. So the real growth for the Amway business is going to come in the markets that we’re already in. If we’re going to grow and add more market share, the only way we can do that is to become much more innovative and do things differently. But we know that we want to continue with our distributors. All those relationships are what give us the single biggest advantage over most retailers.
FE: You’ve had success shaping regulations when there were none for direct marketing, most notably in China, which at one point banned direct marketing companies. Talk about that.
VAN ANDEL: We’ll, we’re glad that we had input in China. Is what China came up with exactly where we’d like it to be? Probably not. We think that it went a little bit too far. But at least now it has a system we can work with. We generally have faced that in newer markets that we go into. We had to go through that in the United States in the 1970s with the FTC [Federal Trade Commission]. That’s just part of the process. It’s just, ‘OK, that’s what we’re going to do when we go into a new market that doesn’t have any regulations.’
FE: What is holding back some entrepreneurs in the United States from starting their own businesses?
VAN ANDEL: For sure, the uncertainty over regulation holds people back. If you think about it, businesses are going to go where the opportunities are. If they’re uncertain about the opportunities because regulations are uncertain, then they’ll go someplace else.
FE: Are there any particular regulations or agencies in the United States that you think are just kind of out of control these days?
VAN ANDEL: An example of regulation that really stymies creativity is the whole issue of health care. If I’m a small or a medium-size business, I frankly don’t know what it’s going to cost me to hire somebody. What it costs today may be a little different six months from now or a year from now. With that uncertainty, why am I going to take that step now? I’m just not going to do it. So we need to get rid of that.
FE: With the economy struggling, have you seen an increase in people who want to be entrepreneurs and want to create their own opportunities?
VAN ANDEL: There are always people out there who have an interest in entrepreneurship. We’ve seen it both in good economic times and in poor economic times. I think it tends to be a bit more of a mind-set or a personal interest than anything else.
FE: Does the partisan atmosphere in Washington shake your optimism in our political system?
VAN ANDEL: I haven’t lost faith in the system, but when you have economically tough times, you need to move a little faster. Our system probably will get us to the best solution, but it sometimes takes a lot of time to get there.
FE: Do you feel that free enterprise is under attack?
VAN ANDEL: I think people get a little bit confused. When times get tough, people lose their optimism about the future. They become pessimistic, and it becomes more difficult to look into the future and see opportunity.