AMWAY'S PRODUCTS SELLING ON INTERNET.

Byline: Lisa Singhania Associated Press 

The soaps, cosmetics, vitamins and friendly neighborhood sales force that made Amway Corp. into a billion-dollar success story are now just a few computer keystrokes away.

The direct-selling giant launched Quixtar, a new e-commerce site designed to sell its and other companies' products, on Sept. 1.

``We're looking at the biggest change in 40 years,'' since Amway was founded, said Ken McDonald, a senior vice president. ``We're going to have the ability to combine high-tech . . . with high-touch, which is what the independent business owners provide.''

But the change didn't come without some growing pains. The volume of people logging on to www.Quixtar.com quickly overwhelmed it, causing it to jam and making it difficult to buy anything.

McDonald said the problems are being corrected, and he isn't worried. Quixtar since has added 24 new servers to deal with the demand, and he estimates there was $1 million in sales during the site's first two weeks in operation.

In many ways, the new site is still classic Amway. The company's free-lance sales force, which Amway calls independent business owners, will continue to sell products to their friends and families as they always have, but with the option of selling products online for Quixtar.

Online customers will be asked to identify their Quixtar independent business owner so commissions are credited. Those who come to the site without a dealer will pick or eventually be assigned one.

There is one significant change, however. Instead of using the word ``Amway'' in the new site's name, the company chose to go with Quixtar and start a new sister division by the same name to manage it.

McDonald said the Quixtar name is not intended to distance the Web site from Amway. Rather, he said, it's an effort to reflect the breadth of non-Amway products that will be available, such as electronics, jewelry and other products.

``We're convinced we can make more money . . . by building two businesses that are different than just by tweaking one business,'' McDonald said.

The Federal Trade Commission cleared the company 20 years ago of charges that its sales structure was a pyramid distribution scheme. But the controversy about direct selling persists.

Last year, China banned all direct selling because of general concerns that such operations promoted illegal activity. Amway has since set up special retail stores there but still is prohibited from direct selling.

And, in recent weeks, Web sites such as deja.com have been abuzz with postings from Amway and Quixtar supporters and detractors.

Scott Moore, a University of Michigan School of Business professor, said Amway is not the first company to use a different name for its e-commerce site.

The idea, he said, is that a new name will attract customers who might have been put off or less intrigued by the old name.

``With the name Quixtar, you wonder who is it? You don't walk in to this thinking Amway,'' Moore said. ``This could appeal to . . . someone who doesn't like Amway or has a negative feeling about Amway.''

The real challenge will be whether the one-on-one salesmanship central to Amway's success can make the transition to e-commerce, said Chris Merritt of Kurt Salmon Associates, an Atlanta-based retail consulting firm.

Direct sellers Tupperware and Avon already sell their products online, but Quixtar is designed to showcase more than Amway products.

Amway dealers will have a choice of remaining traditional independent business owners or joining Quixtar, where they can use the company's Web site as a platform to build their own e-commerce site.

So far, 40,000 people, including many current Amway dealers, have signed up to be independent business owners for Quixtar, according to McDonald. Paul Miller of Raleigh, N.C., is one of them.

``The way people are so busy with time, what we're seeing with e-commerce is that's where people are going,'' said Miller, who sold Amway for 25 years before joining Quixtar.

``It's the same company but a different look. This is sort of an upscale version,'' he said. ``You can already go shopping on the Internet. Now you can make money on the Internet.''

Amway is privately held and won't discuss costs for Quixtar, other than to say early sales and interest have been above and beyond their expectations.

Indeed, the early numbers for the traffic on the Web site appear strong. Customers have spent a weekly average of between 47 and 50 minutes on the Quixtar site since its launch, according to Sean Wargo, an analyst at PC Data, Inc., which tracks e-commerce activity.

``If you rank the week ending Sept. 11 by average time spent, Quixtar would be at No. 20,'' said Wargo. ``I would say that's pretty high. The sites in the top 5 are auction sites, gaming sites, Yahoo and other finance sites.''

He also said Quixtar visitors who were unable to get on the site because of the initial problems might be willing to give the site a second chance.

That's a sentiment McDonald shares, despite some early complaints about Quixtar.

``People went to the site because of their relationship with an independent business owner,'' he said. ``They're going to keep going back because of their friend's recommendation, and people have read enough about the Internet to know these types of problems aren't uncommon.''

Basement venture took off

Amway Corp. and its sister companies had worldwide annual sales of $5.7 billion last year, but the company's origins are modest.

Two friends, Richard DeVos and Jay Van Andel, founded Amway Corp. 40 years ago in the basements of their homes in Ada, Mich.

Today, DeVos and Van Andel are billionaires, ranked among the world's wealthiest men. They both have retired and their children run the business.

Worldwide, there are more than 50 affiliate operations. More than 3 million independent business owners sell its products.

About 70 percent of Amway's sales come from outside North America.

Amway Corp. is held privately, but Amway Japan Ltd. and Amway Asia Pacific Ltd. are publicly traded.

THE FACTS

The Quixtar Web site consists of four primary areas designed to showcase Amway Corp.'s products, as well as other goods. The site, which caters to North America, will be available in English and in French.

``Quixtar Exclusives'' will feature cosmetics, skin care, nutrition and other products traditionally sold by Amway. Water treatment systems and special deals for energy, Internet or telecommunications services also are available.

``Store for More'' features hundreds of brand-name items, ranging from apparel and over-the-counter medications to furniture.

``Hot Buys'' consists of what Quixtar touts as the best deals on many brand-name products. The offerings will change weekly or daily depending upon availability.

``Partner Stores'' will provide links to existing e-commerce sites run by other companies.

- Associated Press

CAPTION(S):

2 photos, box

PHOTO (1) Randy Bancino of Internet Business Group and Amway Corp. shows wall of company Web pages.

Dale Atkins/Associated Press

(2) no caption (Qixtar web page)

BOX: The Facts (see text)