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What Else Are They Making?

February 6, 2009
tags: ,

From mlive.com, an interview with Steve Van Andel and Doug DeVos on the state of Amway. Here’s a quote from the end of the article:

A number of years ago we made the decision to begin contract manufacturing here and we did that because our volume here was small enough we needed to fill up the capacity here.

Today, it looks like half the business we do here is contract, the other half we do is Amway business. We expect as time goes on that will always shift a little bit to make sure we’re competitive.

I touched on this topic before in the past, but I never got a satisfactory answer on the nature of these contract products and the identities of the third-party customers. Anyone have any additional information to share?

Also, does “half the business we do here is contract” mean $4.1 billion out of the $8.2 billion sales figures came from contract manufacturing not tied to the Amway business? Somehow I don’t think that’s the case, but the way the quote is worded makes it seem that way.

Like I said in my earlier post, it makes sense for the corporation to do contract work if they have the resources and availability. I would like to see more light shed on these third-party deals that have in place. What third-party products are manufactured by Amway and how much do these rebranded products cost?

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12 Comments leave one →
  1. MichMan permalink
    February 7, 2009 7:15 am

    Amway has manufactured “negative” products for decades.

    When production is down in Ada, they will make competing brands of toothpaste, soap, etc.

    I always wondered, ‘If they can manufacture popular brands of toothpaste and soap that sell for a fraction of what Amway’s do, why are their own products so expensive?’

  2. February 7, 2009 4:59 pm

    MichMan – Do you have named examples of such “negative” products?

  3. MichMan permalink
    February 8, 2009 10:15 am

    I don’t remember anymore.

    My former neighbor works for Amway.

    He told me that Amway manufactures negative products. I was flabbergasted. I went to my upline Diamond and asked if it was true.

    He said that is was true and said it was a business decision that the founding families made long ago.

  4. mike permalink
    February 8, 2009 5:26 pm

    This is a common practice it the manufacutuing side of consummable products.

    Most manufactures have to run a miminum amount of product..to make running the machines, etc cost effective.

    Therefore many of the “store” brand products are the exact same product as the “name” brand item.

    The other case is that when a production line is finishied and there are “seconds” or not the best of the line product, so instead of tossing it out it is sold under another label.

  5. February 9, 2009 6:28 pm

    Yeah. The seconds would likely be what the sheep get.

  6. MichMan permalink
    February 9, 2009 7:41 pm

    The products I found out they were making were name competitive name brands found in every grocery store… you know, the same products your upline would give you hell for if they found them in your house.

  7. mike permalink
    February 10, 2009 10:06 am

    The sad thing is, those product manufactured by Amway and sold in stores, may be cheaper..

    I know that Namebrand milk sold in some stores is the EXACT same milk sold under the storebrand name…and it almost half the price.

  8. February 10, 2009 11:30 am

    Hey Mike,

    Any milk is good milk, just make sure it does NOT contain Melamine!! hehe, sorry, could not help but make that statement – I am soooo FURIOUS with the China companies that are devoid of conscience, and fed melamine to the babies!!!

    God Bless,

    Rykel
    rykel.blogspot.com

  9. now-prosumer permalink
    February 12, 2009 4:22 pm

    It’s been a while, however it was stated on a standing order that Amway did printing for Reader’s Digest and produced Coppertone Sunscreen. I don’t have a solid reference without digging up all of my old SO’s and actually listen to them :-P.

  10. Missy permalink
    March 12, 2009 2:36 pm

    I used to work for Amway in Ada until a couple of years ago, and know they manufactured Coppertone suntan lotion, Spic n Span, and Laura Mercier (which they own). They also manufactured Suave shampoo, and some of the Orange cleaners. They also do many store brands for Meijer. Their factories run at less than 80% capacity, and they have enormous overhead costs, so it is how they spread the margins.

  11. March 12, 2009 4:15 pm

    Missy – thank you for this information. Looking at Coppertone’s background, I read that Schering-Plough owns and manufactures Coppertone, so I guess they outsourced to Amway to make the product? I also read today that Schering-Plough is now in talks to be merged with Merck.

  12. March 12, 2009 4:18 pm

    Interestingly enough, Spin and Span used to be a Proctor and Gamble product. It was sold to various companies over the years and is now owned by Prestige Brands. According to Wikipedia, P&G still owns the rights to Spin and Span for commercial use.

    Finally, for those interested, Unilever is the parent company of Suave.

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