Amway restructures compensation plan
Amway (Thailand) Ltd has raised its sales incentive budget by 10% to 6 billion baht to attract new distributors to the direct-selling network in a bid to resume positive sales growth in fiscal 2015, which started on Sept 1.
Amway yesterday unveiled its long-term compensation plan that will give business owners higher income and incentives with steady growth. Effective since Sept 1, the new compensation structure for owners from beginners to organisation leaders focuses on a balance between increasing income and career competitiveness.
Kittawat Ritteerawee, the company's managing director, said this is the first time in 27 years that Amway Thailand is offering a new attractive income and incentive deal to its business owners. The move is supposed to motivate owners to build solid, long-term growth for their business teams and Amway.
The new incentive restructuring comprises two compensation plans. Firstly, the standard compensation plan based on the original business model Amway has been using globally for 55 years. It gives owners certain compensations based on their sales performance and level of achievement.
The other is the performance incentives plan, which will benefit all owner groups. It offers increased incentives, of which the short-term ones are for beginners while long-term incentives are designed to motivate organisation leaders to build steady, long-standing ventures.
Mr Kittawat said Amway Thailand's sales in fiscal 2014, ending Aug 31, were 17 billion baht, zero growth from the previous fiscal year, due to the country's economic slowdown and political tensions.
"Although the political situation is more stable, people's purchasing power in direct sales did not rebound as expected," he added.
In response, the company decided to adjust its business strategy by offering higher incentives to attract existing sales representatives and recruit new ones to join its direct-sales network.
Apart from monthly and annual incentives, the company will make it easier for distributors to receive trip incentives than in the past. Previously, it required owners to retain the status qualification for 18 months, but the new requirement has been shortened to only 12 months.
After announcing the new incentive plan to distributors two weeks ago, the number of distributors applying to join the Amway network increased by 10%. Currently, Amway has 330,000 owners who are actively committed to doing business and renewing their membership every year, and approximately 720,000 Amway members nationwide.
"We do not only want to recruit new members, but would also like to see them make Amway their career in the long term," Mr Kittawat said.