The source of the family fortune: Amway. The name might not be familiar to some Americans, for a good reason. While Amway sells an array of household cleaning items, vitamins and nutritional supplements and cosmetics, you can’t buy them in stores. Indeed, the company’s innovation is its use of a business model known as multilevel marketing, or MLM. Consumers must purchase products directly from individual “distributors” — salespeople who operate as “independent business owners” by selling products and recruiting new sellers to do the same.
While this model sounded alluring to people drawn to a life free of a desk and a boss, Amway’s promise turned out to be hollow. In the early 1970s, Amway salespeople earned somewhere between $20 to $30 a month on average. By 2010, that had crept up to $115 — barely enough to cover a cellphone bill, let alone a full wage. But Amway itself — and the DeVos family — profited handsomely, to the tune of $8.8 billion in sales in 2016.
Amway padded the pocketbooks of the DeVos family at the expense of its workers. But it was not simply the DeVoses who got rich off this type of business. President Trump did, too. Indeed, the bigger threat to American workers today may not just be these businesses that have used economic anxieties and false promises of prosperity to undermine worker benefits, but the fact that this type of businessman is now our president.
Richard DeVos founded the company in 1959 with his childhood friend Jay Van Andel. He spelled out their vision in his 2014 memoir “Simply Rich,” writing, “We thought everyone who wanted to should be able to own their own business!”
Amway really took off in the 1970s, a period of unrest and uncertainty in the United States. Social protests ripped the country apart, and the disastrous withdrawal from Vietnam, Watergate and the Iran hostage crisis, to name a few, dealt blows to the country. Economically, roughly 25 years of post-World War II growth came to an end. The oil crises of 1973 and 1979 resulted in gas lines and fueled stagflation, a one-two punch of high inflation and high unemployment. A wave of pessimism swept over Americans. In 1974, only 7 percent of those surveyed by Gallup anticipated “a year of economic prosperity” ahead, while just 6 percent thought that 1975 would see “full or increasing employment.”
The American economy was also undergoing transformations that, over the next four decades, fundamentally and permanently jeopardized job security and material well-being for countless working people. Deindustrialization and outsourcing gutted manufacturing centers in the Northeast and Midwest. Real wages flatlined, income inequality ballooned and upward mobility declined. Some of these problems were exacerbated by rising corporate concentration — a problem that has only grown worse with time.
Many Americans responded to the tumult around them by turning inward and embracing self-help, a philosophy premised on the notion that individuals had within themselves the power to make their lives better through their own effort and determination. One of the most popular books of the decade was a self-help guide reassuringly titled “I’m OK — You’re OK.” The 1970s witnessed the flowering of the so-called Human Potential Movement. And conservatives ascended politically with a message of individual self-reliance.
Amway tapped directly into this ethos, offering what amounted to a program of economic self-help. By becoming distributors, Americans could proposer despite the gloomy economic climate. The company dangled the possibility that through direct sales individuals could earn huge fortunes, although Amway was careful never to guarantee this. Pro-Amway materials like Charles Paul Conn’s “An Uncommon Freedom” and “The Possible Dream” featured countless aspirational stories of distributors who managed to quit their jobs, pay down debts and earn tens or even hundreds of thousands of dollars through direct selling. These success stories are the rare exception, but Amway has used them as examples of what anyone can achieve if they try hard enough.
The company and its boosters also have long insisted that direct sales are, in many instances, preferable to working an ordinary, 9-to-5 job. Why work for someone else when you can work for yourself?
But there is a catch: Amway’s “independent business owners” have none of the benefits of employment. By considering distributors heads of their own businesses, direct sales companies like Amway have avoided New Deal worker protections dating to the 1930s. While the companies promise to restore the pathways to self-improvement and entrepreneurship, they leave their distributors without any benefits or security. For Amway this means avoiding any of the costs of employing people full-time, while reaping all of the profits of a large workforce.
Even worse, along with paltry earnings, Amway distributors often incur substantial expenses as a result of being in the business. If a distributor has to drive considerable distances to find recruits, for example, he or she has to pay for travel costs. Additionally, many distributors have felt pressure to purchase “tools” — materials intended to help distributors run their businesses, which have included books, audio cassette tapes and CDs — as well as tickets to distributor conventions and functions.
Despite all this, Amway has managed to develop strong brand loyalty among its distributors; both because of its products, and because it touts the non-monetary benefits of distributing for Amway. The company casts distribution as an activity that can bring families closer, foster friendships and make people more self-confident, outgoing and optimistic. Amway has also held out the allure of recognition: distributors who hit certain milestones are awarded “pins” named after precious metals or stones (Gold, Emerald, Diamond, etc.), all of which come with special perks.
President Trump also recognized the pull of multilevel marketing as a businessman. In March 2009, he struck a licensing deal with Ideal Health, a MLM that sold health and wellness products. That fall, Ideal Health was officially re-christened the Trump Network. In the midst of the Great Recession, Trump promoted the network and MLM as a way to stem the tide of economic pain — just as Amway had before him. The Trump Network, he promised in a promotional video, offered Americans the opportunity “to opt out of the recession.”
Just two years later, though, the Trump Network shut its doors. Some distributors went bankrupt, while many more were frustrated that promises of wealth and economic independence never materialized. Their disappointment echoed the experiences of former Amway distributors like Stephen Butterfield, Ruth Carter and Eric Scheibeler, who all left and wrote critical tell-all books. But like Trump University and other failed ventures, the losses were felt by vulnerable people hoping for a Trump miracle, while Trump’s image as a wealthy success and his bottom line remained untarnished.
In life and in death, Richard DeVos, like Donald Trump, was attacked as a con man. Both men found success in appealing to anxieties about change and yearnings for a lost past. DeVos insisted that Amway could make financial security and socioeconomic mobility more prevalent again. Trump, meanwhile, has used the promise of wealth and mobility for ordinary people to enrich himself and ascend to the highest position in government. And he’s operating the government in the same way: lots of promises to help average Americans, but regressive policies that do nothing to boost their bottom line. Amway made the DeVos family wealthy while offering few, if any, tangible gains for its distributor force. If past is prologue, the president’s base may want to brace itself.