By GREG GARLAND
Advocate staff writer
Published on 4/26/98
First in a series

KNOXVILLE, Tenn. -- The Thompson-Boling arena at the University of Tennessee is rocking with nearly 16,000 excited, hand-clapping and cheering people.

Most of the men wear suits and ties, their shoes polished and gleaming. The women wear dresses and professional business attire, their hair carefully coiffed.

They streamed into Knoxville from Louisiana, Canada, Florida, Mississippi, New York, Maryland, the Carolinas _ all over _ via charter bus, van, motor home, airplane and car caravan.

On stage, a pop-rock band sings about "Crazy Circles." Lighted rings flash on a screen, merging and separating and merging again.

The crowd _ many standing and bouncing to the beat _ picks up on the refrain and sings along: "I want it all! I want it all! I want it all!!! And I want it now!"

Each participant paid $65 to attend the March 20-22 event to learn how to "have it all," how to turn the often-elusive American Dream into a reality.

Their guide and guru is Bill Britt, 66, a Durham, N.C., self-described "multi-millionaire many times over" who says he can teach ordinary people how to become millionaires.

They can do this, Britt says, by using his system to build their own international marketing businesses from their homes.

The business Britt is talking about is Amway.

Britt leads one of the largest systems that is set up to sponsor, train and motivate distributors of products made by the company.

His motivational system is a separate business entity from Amway Corp., the Ada, Mich.-based company that makes soap, toothpaste, cosmetics and 450 other products.

Amway depends on mega-distributors like Britt and Dexter Yager of Charlotte, N.C., for most of its $7 billion in annual sales because their motivational systems deliver most of the people who buy Amway's products.

"Ninety percent of the volume that moves through Amway is plugged into one of those two systems," said Mark Dean, a successful Amway distributor from Prairieville.

Amway disputes that figure but wouldn't say how much sales volume runs through the Britt and Yager systems.

But as The Advocate found in a three-month probe, Britt's system has more to do with selling hope than soap.

The Advocate's investigation involved listening to hours of Britt motivational tapes, attending Amway distributor meetings, interviewing dozens of current and ex-distributors and examining records of lawsuits filed around the country.

The motivational systems are themselves money machines, yielding millions of dollars for Britt, Yager and those who rise to the upper ranks of their organizations.

The millions come from selling motivational tapes, books and tickets to functions like the one in Knoxville. Distributors are told their success depends on buying and using those materials.

There is a large market.

Tens of thousands of people across the United States and nearly 40 foreign countries follow Britt's system, including 15,000 to 16,000 people in Louisiana alone.

Britt's "Spring Leadership" function in Knoxville is one of four major motivational events put on annually by his company, Britt Worldwide.

At these functions, Amway distributors in Britt's system hear many success stories like that of Marie Spencer, who was one of the first speakers in Knoxville.

"We were broke with a capital `B'," Spencer says. "We even charged food on credit cards, before it was fashionable."

But she describes a life now so free of strain that the only pressure she and her husband face are things like "deciding what to order from room service" on vacation trips to Hawaii.

"We have something to offer _ the hope that something better can happen in your life...," Spencer tells the Knoxville gathering. "The world wants what we have and needs what we have."

The crowd will hear a lot more talk about hope, dreams, faith, free enterprise and the lavish lifestyles of those who have made it in Britt's system during the three-day rally.
 
But they won't hear much about soap or other Amway products. In fact, the crowd is not going to hear Amway mentioned much at all.

The crowd roars and people rise to their feet, clapping to a rock beat blaring from the speakers, as Britt and his wife Peggy take the stage the first night in Knoxville.

The music fades and the enthusiastic crowd, led by Britt, pumps fists into the air and yells "Whoo! Whoo! FREE-DOM!!!"

Britt tells the distributors that they can expect a weekend full of information vital to building their businesses.

"All the speakers this weekend are at least millionaires and most are multi-millionaires," Britt says.

The speakers, like Spencer, tell stories of sacrifice, struggle and of making it big by faithfully following Britt's system. They are there to inspire and motivate.

"Everyone in this business has to go through dark times, times when it looks like nothing's happening," Britt says.

If the distributors just keep showing the Amway plan to enough people _"drawing the circles," Britt says, and following the teachings of Britt's system, they, too, can join the top ranks.

Drawing circles on a white board is the way the Amway business plan is shown to new recruits.

"I'm glad you could see the circles and understand them," Britt tells his audience. "You know it (the system) works because of the people on this stage."

The Knoxville event, like other major Britt functions, blends elements of a rock concert, patriotic celebration, religious revival and a rousing "think positive" business rally. These events attract doctors, lawyers, engineers, clerks, car salesmen, teachers and others.

Their common link: A deep faith in the American Dream and an unshakable belief that building an Amway business, through the Britt system, is the way to achieve it.

The basic message in Knoxville and at similar functions is simple. If you just work hard enough at building your Amway business, you can become rich and enjoy the freedom that wealth brings.

As Britt puts it in Knoxville, "You have to be economically free to be personally free."

It is a powerful message heard repeatedly by Amway distributors in the Britt system, and similar motivational systems run by other high-level Amway distributors.

The stories of struggle and success are told from the stage and through cassette tapes that distributors are encouraged to buy, and to listen to daily.

Britt, who did not respond to The Advocate's interview requests, has boasted in the past that more than 700,000 people are part of the Britt system

They are all part of his extensive "downline" of distributors worldwide.

Paul Miller, a high level distributor with Britt, said that figure likely includes couples who have joint Amway distributorships.

Britt gets a varying percentage off the Amway products bought by the downline distributors in his group. He also earns money from Britt Worldwide and its affiliates, his motivational entities that are separate from Amway Corp.

Britt Worldwide sells Amway distributors tapes, books, income tax services, computer software, training materials and tickets to Britt functions like the one in Knoxville.

A lot of the buyers are in Louisiana including prominent people such as Ben James, who was Secretary of Commerce under former Gov. Dave Treen, conservative state Rep. Woody Jenkins, and Steve Ridley, a longtime Jenkins associate who quit as a partner in one of New Orleans' largest law firms to concentrate on his Amway business.

Others in the Louisiana group include Jason Borne and his father, Dan Borne, executive director of the Louisiana Chemical Association, and Mark Dean, son of LSU Athletic Director Joe Dean.

The man at the top spot in Louisiana, and who started the ball rolling for Britt in the state in 1986, is Ray Youngblood of Slidell, a retired U.S. Air Force major with a colorful, folksy speaking style.

Youngblood's line of sponsorship in Louisiana is regarded as one of the fastest growing within Britt's large Amway distributor group.

"We've probably got 15,000 to 16,000 distributors in Louisiana," said Youngblood.

The distributor ranks grew quickly in Louisiana, Youngblood said, because he found a team of leaders like Ridley, who is "a very strong individual with a tremendous sphere of influence."

The sagging state economy in the late 1980s and early 1990s also made people receptive to the Amway opportunity, he said.

"I would say one reason it took off like a rocket was at the time we were building a foundation where there was a need," Youngblood said. "The oil and gas business fell apart. There were people hurting."

The fast growth hasn't gone unnoticed, as Larry Winters, a top-level, North Carolina distributor in Britt's organization, noted when speaking at a 1995 rally in Louisiana.

"You've already set the Britt team on its ear," Winters told the rally goers. "The Youngblood team is the talk of Bill's organization right now and if you're the talk of Bill's organization, you're automatically the talk of Amway."

A tape was made of Winters' talk, as is typically done with speakers. The tapes are sold to distributors for $6 each as motivational "tools."

The fast-growing Louisiana contingent is a fraction of the 3 million Amway distributorships operating nationwide, and in more than 80 foreign countries.

In 1997, Amway distributors produced $7 billion in sales for the privately-held corporation, based on suggested retail sales prices for its products, company officials said. The sales figure has tripled just since 1990, they said.

Generating those sales requires recruiting a constant stream of distributors to buy Amway products and to sponsor other distributors who, in turn, sponsor yet others.

Amway attaches a "point value" to its products and uses an intricate system of performance bonuses to pay the distributors based on the volume they sell and the amount that moves through the distributors they sponsor.

The bonuses, Amway says, are the monies that otherwise would go toward advertising, distribution and similar costs if its products were sold in traditional retail stores.

"We are Sam Walton and Walmart minus the 3,000 or 4,000 stores," said Jason Borne. "We are McDonald's but we don't have 40 items on the menu or little pictures on the cash register."

But those who sign on to become Amway distributors soon learn that it is more a way of life and a matter of faith than it is just a business.

Those who join are continuously told by their "uplines" _ those who sponsor them _ that Amway can be the vehicle to make their dreams come true.

They are told their success depends on buying recommended tapes and books and attending major functions. The costs can easily run into the thousands of dollars a year.

The most successful distributors become icons to others hoping to make it big.

The Amway "big pins" _ those who have achieved levels like the "Diamond" pins in Amway-speak _ regularly take the stage at motivational rallies and talk about their lavish lifestyles.

The "big pins" often use slides and films to show off their Mercedes-Benzes, plush homes, designer clothing, expensive jewelry, motor homes or travels to exotic vacation spots around the globe.

Youngblood, Britt's top Louisiana distributor, is one of those who has become very successful.

He recently moved into a 5,300-square-foot, waterfront home outside Slidell that he bought for $900,000. He said his fleet of vehicles includes a Ferrari, two Mercedes-Benzes and a new Ford Explorer.

"Mainly it's for motivation," Youngblood said of the cars. "The Ferrari gets the young people fired up."

Like most successful distributors, Youngblood wouldn't give specifics on his income but said he and his wife, Carroll, reached a "six figure income" after just 38 months in the business.

How does Amway work?

The products are not sold in retail stores, but rather through distributors who order them through Amway catalogs.

The distributors buy household products like soap powder for their own use. They sponsor others to do the same and teach them how to recruit yet more new people into their group.

The process leads to chains of downline distributors that can reach into the tens of thousands for the most successful, like Britt.

The bigger your downline and the more product moved through your group, the more money you make in the form of bonuses paid by Amway.

The distributors don't go door-to-door with their products.

Britt's system emphasizes training and sponsoring new Amway distributors who buy the products themselves.

As Ridley told a group of Amway distributors in Baton Rouge in December: "We're not looking for customers; we're looking for distributor-customers."

Some get rich and make fabulous incomes following the Britt system. But they are a tiny fraction of those who try.

The average "active distributor" grosses only $88 a month, according to Amway's figures. Amway is required by federal regulators to disclose those numbers to new recruits.

Amway defines an "active distributor" as one who received bonus money, attempted to make a retail sale, tried to sponsor someone as a distributor or who attended an Amway meeting during the month surveyed.

It also is extremely difficult to reach even the first significant level of success in the world of Amway, which is to become a "direct distributor."

A distributor makes the direct level by moving $15,000 worth of products a month through his line of sponsorship, for six months in a fiscal year. He then "breaks off" from his original sponsor.

Amway uses an intricate system of performance bonuses to compensate distributors. The amount a direct distributor makes on $15,000 in sales depends on the structure of his downline group.

The specific example Amway uses in a brochure for new distributors cites a gross income of about $2,100 a month on that level of sales.

According to Amway's own survey figures, only 2 percent of distributors the company considers to be active were at the direct level and made that amount in at least one month for the period April 1994 through March 1995.

Mark Dean, an "Emerald" level distributor from Prairieville, said the $88 a month gross income average and 2 percent direct distributor numbers are misleading.

"The figures sound terrible but you have to put them into context," Dean said.

"A lot of people (distributors) do little or nothing. There is a large majority of people that quit in the first 90 days, but for the rest of the year they are counted as active distributors."

Dean said he sees the success rate for the Britt system in different terms.

"When anybody asks me what our success rate is, I say it's 100 percent for people that work the eight basic steps that the Britt system teaches," Dean said.

One of the most important is showing the Amway business plan to prospects three to five times a week, Dean said.

"The reality is only a certain number of people are going to do the work," Dean said. "Anybody that does the work is going to succeed. This thing is not a lottery. It's not by chance."

Still, building a successful Amway business can be a difficult struggle, as Dean and others readily acknowledge.

Making direct is only the first step.

A direct distributor doesn't reach the higher pin levels, such as "Emerald" and "Diamond," until he sponsors more people who also become direct distributors.

It is at those higher pin levels that distributors generally start to make significant sums from their business, after expenses.

Amway officials would not disclose the number of distributors at the different pin levels, or reveal the average amount the company pays them.

However, a "Hall of Distinction" that lists Diamond-level and above achievers at Amway's headquarters in Ada gives an idea of their numbers.
 
The names listed on the wall show 769 distributors in the United States and Canada have reached the level of Diamond or above _ Executive Diamond, Double Diamond, Triple Diamond, Crown and Crown Ambassador.

However, a name on the wall only means the person once reached that rank, not necessarily that he still operates his business at that level.

While many work feverishly to "Go Diamond" _ sometimes at substantial sacrifice to their families and their budgets _ the record suggests that is a difficult and elusive goal.

The reality is that most distributors end up with little to show for their often long hours in the business beyond snapshots and ticket stubs from big, out-of-state Amway rallies and boxes full of motivational tapes that wind up stuffed in a closet.

Some contend the really big money isn't in Amway product sales at all, but rather is in the sale of motivational "tools" like tapes and in the profits from huge motivational rallies.

It is something that has raised concerns, at least in the past, even from Amway co-founder Rich DeVos.

Copyright c 1995-2001, The Advocate, Capital City Press, All Rights Reserved.
http://www.theadvocate.com/archive/story.asp?storyid=10887