Amway: the founders' sons dropped the brand in America, then brought it back

Amway was founded in 1959 by school friends Richard DeVos and Jay Van Andel. By the late 1990s the second generation ran the direct-selling giant: DeVos's sons Dick and Doug and Van Andel's son Steve. The Amway name was still famous — and infamous, dogged by pyramid-scheme accusations — while e-commerce threatened a business built on distributors calling at people's homes.

In 1999 the family renamed its North American business Quixtar, a tech-sounding brand meant to ride the internet boom and escape the old name's baggage; the parent company became Alticor, and Amway North America was wound down after 2001. The founding name survived only overseas. North American sales stayed flat for five years, and a 2009 Forbes account noted the new name never stuck.

In 2007 the family began retiring Quixtar and reintroduced the Amway name with a $24.5 million advertising campaign — after nine years of disuse, Amway still had 90% brand awareness in America against Quixtar's 3%. Growth by then came from abroad: Alticor reported record sales of $8.2 billion for 2008, up 15%, powered by China, Russia and India, with roughly 80% of the business outside the United States.

Record $8.2B sales in 2008, up 15%, led by China, Russia and India; the Amway name returned with 90% brand awareness intact.

The Amway name carried baggage — fraud accusations, court cases and decades of jokes — that a clean-slate brand seemed to escape.

E-commerce threatened the distributor model, so the heirs tried to co-opt it with an internet-native name rather than fight it.

Brand equity proved more durable than the scandals: after nine years unused, Amway had 90% US awareness while Quixtar managed 3%.

Growth had already shifted to Asia and Eastern Europe, so the family could afford a slow rebuild of North America around the restored name.

Family ownership lets you reverse a bad decision without a proxy fight. The sons could bury the founding brand and, when the bet failed, resurrect it without answering to outside shareholders.

The restored Amway carried the family firm to record revenue — $7.1 billion in 2007 and $8.2 billion in 2008, its fiftieth-anniversary year, with Steve Van Andel as chairman and Doug DeVos as president. The reputation wars continued: in 2010 the company settled a distributor class action over its business model for $100 million. The firm remains one of the largest private companies in the United States, wholly owned by the two founding families, and Quixtar is remembered mainly as the brand the heirs were able to disown and then bring home.