I have been following a few awards received by Amway India with respect to Corporate Social Responsibility. I have nothing against the company or the people who adjudicate, but I have a few questions regarding the implementation of CSR in reality.
Amway products are in FMCG – Fast Moving Consumer Goods, which mean are products that are sold quickly and at relatively low-cost (find the details at Wikipedia). There are a few explanations given for the pricing by many distributors and also Amway product tutorials/guides. Everyone talks about the higher pricing and in fact I have mentioned about increase in prices in one of my other posts. Let us talk about their defense, concentrated products. Agreed, but the problem is when your advertisement costs were nil, very little even today, and you just mix water in the concentrated home care products why the products do not are not cheaper than market products. For that matter, anything bought on MSRP is always costlier than any products and that is with due consideration to quality as well. Every IBO is forced directly or indirectly to buy products and sell the expensive FMCG products.
Next defense is longevity, any products which last more than three months do not come under Fast Moving! If you start using dish-washer Rs 350 for half liter for one month with a family of four people then it looks a concern to be addressed. Even a toothpaste should last four times the one in market, then how do IBOs get new customers for their license to be a ‘Direct Distributor’? And there enough people who end up wasting the products after using the same home-care bottle product-piece for months together. Let us talk about supplements and skin care premium products which are told to be value for money. If it is only to buy based on need how someone will buy skin refinishing products worth more than Rs 2000 and also store for a mostly non-existent retail prospects. Why should every IBO buy/consume more than Rs 150 worth of supplements everyday? How come all these do not become a part of Corporate Social Responsibility? One simple dilution bottle costs more than Rs 30 which should be bought separately to use any home care products?
OK now let us come to so-called quality and money back guarantee etc. How many system followers really give the product back to the company, not sure any one does it at all, because it sets a bad precedent! If business is for everyone why not products are for everyone. So called value for money products as well as India direct competition products are costlier than any other. We really need to define this business a little different here. Business is for someone who has enough money to spend anything offered by company and for anyone who never bothered for making losses! We need to understand one thing, FMCG products quality should stop at certain point and price cannot go beyond certain point because – any asset can be expensive and to be used for long time, but not a high-priced day-to-day usage product, FMCG need not be a luxury!