Amway sells G & H Body Shampoo and G & H Lotion 250 ml through its ABOs (Amway Business Owners) for Rs 395 each. Believe it or not, the real prices of these products are just Rs 51.49 and Rs 34.19 respectively.
A list of 119 products marketed by Amway, that was seized by the Crime Branch Economic Offences Wing, during the raid at the firm’s offices in Kochi recently, clearly exposes this. The list comprises the product code, name, real price and selling price of products.
“Almost all the products are sold up to ten times more than its original price. It has been revealed that around 49.75 per cent of the price paid by the end consumer goes as incentives or commission to ABOs in the up line of the market chain. We suggest the public to just cross-check the prices of Amway products and similar products of other companies and see the difference. In spite of any value addition, the products are heavily priced,” said P A Valsan, Superintendent of Police, Economic Offences Wing of Crime Branch.
What’s more surprising is that, according to police, only a few of the products marketed by Amway are brought from abroad. “Most of the products are outsourced from various Indian companies including Sarvotham Care and Naiza Laboratories in Himachal Pradesh, Soft Gel Health Care, Chennai, Aura Personal Products, Utharanchal, Aero Pharma, Mumbai, Fiabila Limited, Raigarh, Avalon Cosmetics, Mumbai and the KLF Nirmal coconut oil based at Irinjalakuda. In short, Amway procures products from domestic companies and sells it here at six to ten-fold price,” said DySP P P Sadanandan, who has done extensive research in to money chain frauds in the country. He is also the investigating officer in the Tycoon Empire money chain case.
Police said the generation plan being followed by Amway is the most dangerous of all the multi-level marketing plans in terms of the percentage of people losing money in the scheme. “Anyone can sponsor any number of persons as his direct down line. The unlimited facilitation of enrollment and staircase commission structure makes the marketing plan arithmetically infeasible. Though they claim it is direct selling without any advertisements and distributors, the marketing plan of Amway has 22 intermediaries starting from Silver Producer to Founder’s Crown Ambassador,’’ Sadanandan said.
As per Money Circulation Schemes (Banning) Act, charging fee for enrolling members in the scheme is illegal.
