Amway Pyramid Scheme
If there’s something you and I can both agree on, it’s that Covid-19 sucks!
Not sure why I said that but let’s carry on with the real intent of this blog…
I’m sure majority of you would recognize “Amway” at any given time.
Out of all multi-level marketing companies, Amway is the most notorious and undisputed network marketing company of them all.
No one has come close to beating Amway as far as yearly revenue is concerned.
To date, Amway still remains as the unbeatable direct selling business across the globe that generates a revenue of up to $9 billion annually – beating its closest competitors, Herbalife and Avon, by $3 billion more.
At the height of its popularity, you would find Amway distributors at every corner of the globe. In recent years, however, Amway Global has been a little quiet.
For 60 long years, Amway has managed to attract millions of supporters all over the world. You must be wondering why and how they did it.
Table of Contents
What Is Amway?
Founded in 1959, Amway was established by long-time business partners, Jay Van Andel and Richard DeVos. Amway is short for “American Way.”
They met as students at Grand Rapids Christian School and both shared great interest in business and sales.
Devos and Van Andel had already worked on several other business ventures even before Amway was established. Most of these though failed which included the Nutrilite company.
Through Nutrilite, Jay Van Andel and Richard DeVos finally found the business model that gave them success.
Nutrilite operated differently from most of its rival companies in that it offered sales commissions, and also provided incentives when members signed up other people to become distributors.
Initially, the company sold dietary supplements and subsequently added cleaning products to their product line such as the Liquid Organic Cleaner.
The two saw that Nutrilite’s business model could actually work so they decided to create their own MLM or multi-level marketing company. They understood that this could create a lot of profitable business opportunities.
As soon as they did, the Amway company became an instant global success. The consumers’ response was insane!
But despite this, people in the United States associated Amway with pyramid schemes and so its reputation got tainted just as quickly.
To remedy this, Amway thought of renaming a few of their departments. They gave the corporation the name Alticor, as well as the sales departments the names Quixtar Brand and Access Business Group which are based in North America.
However, other countries across the globe still kept using the name Amway.
Keeping The Amway Corporation A Family Business
The son of Jay Van Andel, Steve Van Andel, and the son of Richard DeVos, Doug Devos, started co-chairing Amway since 1995.
Today, Amway remains as the word’s most popular and undisputed multi-level marketing company since its establishment.
On the surface, they do seem to be a credible way to make big money. But if you take a closer look, you’d realize that there’s more to it than meets the eye.
In 2019 alone, Amway made a total of $8.4 billion from selling their products. How did they do it? Who could have bought their products for them to generate this much?
What Amway fails to do is tell their potential associates and members that they make majority of their sales from selling Amway products to their distributors (Otherwise known as Independent Business Owners) rather than to consumers.
It’s a guaranteed sales tactic that surely brings in money to the company.
However, many of these so called “products” sold to their distributors are actually seminars, conferences, and training materials on how they could become rich quickly.
Is Amway Banned In Any Country? Why Is Amway Banned In The US?
Some of the business laws in the United States are very lenient and tolerant compared to most countries. And Amway is able to stay afloat legally on these.
They are not so lucky though in other countries. They have been banned and prohibited from both recruiting distributors and selling personal care products.
In the UK, every Amway business operation has been cut short in 2007 on the grounds of false income claims, as well as, making profits from selling to distributors as opposed to direct selling.
In the same way, Amway has faced some opposition from the government of India and regarded it as a pyramid scheme.
Several warehouses owned by Amway were shut down, and consequently products were confiscated. Some of the senior distributors were also arrested.
Several Amway distributors have been involved in high profile legal cases. One example is when some of these Amway distributors were prosecuted successfully for spreading rumors about Procter & Gamble, that they were tithing to the Church of Satan.
How absurd is this, right?
The distributors did this with the intent of pulling potential Christian customers away from Procter & Gamble to ultimately lure them to using Amway products instead.
Despite all these, Amway manages to operate legally in the United States up to this day – under a different name, that is.
Can You Make Money From Amway?
The fortune that the founders made out of the Amway business model is proof enough that you can. It is absolutely a plausible way to make money. In fact, they claim that Amway has created jobs for many.
But you have to understand that with the business model they use, regular Amway business owners struggle to make huge profits, even just to break even.
According to a study conducted in 2008, about 33,000 people who were selling Amway products were observed. Out of the 33k, only 90 managed to break even, let alone make extra.
This doesn’t mean, however, that it is impossible to make money with Amway.
The sad truth about multi-level marketing companies is that you never make make huge profits from merely selling Amway household products.
You gotta do it by recruitment as any multi-level marketing company would do. Signing up as many people as you can under you is the name of the game.
This has caused both individuals and institutions to coin this business as “The Amway Pyramid Scheme.”
How People Make Money From Amway – And The Hidden Costs
Upon signing up with Amway, sellers need to pay a fee to become a member as any direct selling association would require.
Apart from this, however, these distributors are also obligated to purchase the products.
They are expected to use the products, which are worth a fortune compared to their regular counterparts, and also to keep a stock for their potential buyers.
And when they do sell, these distributors receive a small commission in return.
Now, the real money only comes in when people pay certain fees to become “independent business owners.”
Amway coins this as “people selling for you.”
As the recruitment builds up and you gain more distributors in your down line, the big money starts pouring in for you.
This is exactly how and I’d say the only way you could ever make a considerable amount of money out of this kind of business model – it’s pretty much only when more and more people sign up under you.
Although Amway is not an illegal pyramid scheme technically, it obviously takes another form. Strangely enough, it does appear like the traditional pyramid schemes out there that we are all familiar with.
How Does Amway Make Money?
The company does not make huge profits by selling their products, just like their distributors. Rather, they earn from these two main sources:
- Recruitment: When people sign up to become independent business owners who pay fees and purchase products from Amway or when a potential customer becomes a distributor
- Business Materials: When recruited distributors pay for Amway business materials such as conferences, tapes, and other similar seminars aimed at making you a “direct sales powerhouse”
Top independent business owners do not actually sell the products, but the lifestyle of the rich and wealthy.
Their wealth mainly comes from the lavish fees they collect at Amway seminars that they organize or from books and learning materials that they swear on would help you get the same ROI – not from direct selling.
Sadly, the majority of the members of Amway Global do not attain the promised financial freedom.
Although Amway presents their business model as a direct selling business, they do not generate revenue from direct selling at all.
They go to you and sugarcoat the Amway business with white lies – being told that potential distributors would become business owners of Amway products when the ugly truth is that they would be the customers.
That said, the obvious consequence of this is for these independent business owners to invest huge amounts of their own money on unnecessary training materials created by Amway.
What Is Amway Now Called?
Because of bad reputation, Amway was forced to change names.
Alticor is now the new name and acts as the parent company together with the following subsidiaries:
- Quixtar – The direct sales & MLM arm
- Access Business Group – The company’s development branch
- Fulton Innovations – The research arm of the company for potential new products and the market in general
Because Amway is not as popular in other countries, they’ve managed to retain the original name there.
In the end, US distributors are not encouraged to use or even mention the name, “Amway” to avoid scaring potential recruits away before they could join or buy from them.
How Many Millionaires Has Amway Created?
The Amway company has always claimed how they’ve made more millionaires than any multi-level marketing companies, but the facts do not back up this claim.
Most probably yes, they’ve created millionaires, but not at this rate.
As per the Money.com article, stats reveal that there is one millionaire for every 20 Americans! (No need to worry, we all feel insecure about this – me included!)
And one out of 240 Amway distributors gets to achieve the platinum level, which means they earn anywhere between $30,000 to $50,000 annually.
Only one in every 15,000 Amway distributors become a diamond level holder, which means they make about $147,000 per year.
With these numbers, it’s a reasonable assumption to say that it’s quite rare for any Amway distributor to become a millionaire even if you work your ass off.
Why Are Amway Products So Expensive?
Amway’s brave take on their products is both impressive and absurd.
They claim that Amway products are superior in quality, performance, and safety than most of their cheaper counterparts, hence the hefty price tag.
But, according to consumer testing, this is not entirely true.
Consumer Reports has done some testing on their cleaning products and found out that conventional brands work better.
Turns out that not all expensive stuff are worth your money. With Amway products, you just don’t get what you pay for.
So, what is the real score about their very expensive mark-ups?
The answer is simple – the company wants to make as much money as they could out from your pockets.
The money paid to Amway distributors is next to nothing compared to what stores have to pay for overhead and wages, which is considerably more!
Amway already earns a lot from employees who are paying the company “membership” and “other” fees, so their products should not be marked up as high as they are.
Is Amway Company A Legitimate Business?
To some degree, yes. But in a lot of other ways, no.
There’s a very thin line between Amway and an illegal pyramid scheme.
The Federal Trade Commission did some investigation way back 1979 and concluded that Amway is within the legal boundaries because they do have physical products to sell and they pay for recruiting people.
Customarily, pyramid structures in an MLM business model in the United States are banned only when there are no physical products or services being sold.
But this does not make Amway a fully legitimate business.
Amway customers and past distributors sued Quixtar, Amway’s new name, for $150 million and won in 2010.
In the lawsuit, Amway was accused by the plaintiffs for making money solely from selling training and motivational materials.
Additionally, it was also alleged that Amway has not been compliant with the ruling from the Federal Trade Commission that took place in 1979.
On top of all these, Quixtar, formerly Amway, also faced charges on mail and wire fraud, including racketeering.
Clearly, those people who are eager to make extra cash quickly and join such company end up realizing that the only way to make real money is to recruit more distributors.
Be that as it may, Amway has been able to stay legally compliant in the United States- barely, that is.
Is It Illegal To Sell Amway On Amazon?
It is not illegal to sell Amway products on Amazon as there is not a single law that forbids it.
However, the company does – not only on Amazon but on all online sites including eBay. They have prohibited their distributors to do so.
Although Amway distributors are not allowed to do this, most still sell the products online anyway.
Since it’s tough to get a high ROI, these Amway distributors do what they can to reach a larger audience and make huge sales. And there’s just no better way to do it than online, right?
Their hope though is that they don’t get caught by the company selling them.
Pros: Why Is Amway Legit?
You Won’t Have To Worry Too Much About Stability With This One.
Amway has been a Direct Selling Association’s member for a very long time. And as such, it is by far the most successful and largest multi-level marketing company across the globe.
You are dealing not only with a company that has been operating for over 60 years now, but one that generates up to $8 billion worth of sales.
Although Amway sales have been declining in recent years, they’re definitely here to stay for quite sometime.
Their Product Quality Is Mostly Outstanding.
Overall, Amway has maintained high quality in most of their products. And they are known for it.
So, if you decide to work as an Amway IBO full time, you can take pride in it product-wise.
You can be sure that you are selling products that are of high-quality, even though you might dislike their business plan or business model.
To be honest, this is more than enough praise in comparison to other second-rate MLM companies out there today.
A High Rating From The Better Business Bureau (BBB).
Amway has been BBB-accredited for the past 30 years, currently with an A+ rating.
This may sound great for the company, but you need to know that this is very common for MLM companies that are as big as Amway.
As you may already know, such rating comes mostly from positive reviews by Amway’s distributors, so it’s really not surprising that the result is biased.
As The Most Well-Established Network Marketing Company, Amway Offers Top-Notch Training Materials And Events For Their IBOs.
Amway offers a plethora of free training materials, including motivational ones, so you can step up in your game as an Amway independent business owner or IBO.
The free training materials are in various formats such as books, webinars, live presentations, online courses, and podcasts. These are all high-quality materials which Amway invests on.
Of course, they do have the ones that they sell (for a hefty price tag), so if you can’t afford them or you simply do not want to spend for them, you can always opt for the free training materials.
For IBOs living in New York and nearby neighborhoods, they’ve put up an Amway Business Center where they can visit anytime if there is ever the need.
They also offer several motivational seminars and conferences to keep you inspired and driven.
But it’s important to note that those from your upline will try to sell to you “unofficial” Business Support Materials (BSMs).
Cons: Is Amway a Pyramid Scheme or Scam?
On The Business Opportunity Side, Amway’s Reputation Is All But In The Crapper.
Truth is most people, especially an entrepreneur, have become wary of the word, “Amway,” whenever they hear anyone who mentions it.
There’s just this invisible wall that quickly builds up infront of you before you could even start engaging in any conversation about the business.
The most usual questions that pop up in your mind would likely include the words and phrases, “pyramid scheme,” “pyramid scam,” and “Ponzi scheme.”
Or questions like, “Are not those in the upline the only people who make real money with Amway?”
To counter this, the majority of their independent business owners (IBOs) have prepared clever scripts to avoid mentioning the company name in any conversation with a potential distributor or buyer.
Hence, the World Wide Dream Builders which is an affiliate of Amway has been thriving because they don’t have to use or mention Amway right away.
Throughout The Decades, The Company Has Been The Target Of Numerous FTC Investigations.
Amway has faced several allegations throughout many decades which include exaggerated income claims, price fixing, and even for paying millions to former Amway distributors to engage in not-so legal business practices and activities.
There’s a thin line between selling the Amway products and selling the Amway dream.
And as I would assume, Amway’s long-standing and biggest accusation would be that of being an illegal pyramid scheme, which explains why it’s been coined as the “Scamway.”
However, the Federal Trade Commission (FTC) has already ruled this out way back 1979 because they’ve found out that they do not particularly pay people to enlist new distributors.
But of course, everyone knows that recruitment is the backbone of any MLMs and is clearly highly promoted.
After all, network marketing operates in this manner.
Being One Of The Original Multi Level Marketing Companies, It’s Not Surprising That IBOs Are Heavily Pressured To Sell Products Like Crazy And Buy More For Personal Use.
As a result, Amway distributors acquire point value (PV) and business volume (BV). Their compensation percentage per month is determined by these two.
But Amway products do not come cheap as in most MLM products are.
And this had made it really tough for distributors to buy the volume they need to meet the minimum requirements.
This is besides the fact that convincing a potential distributor to choose expensive Amway products over store-bought brands that are much cheaper is as challenging.
The Over-The-Top Amway Company Meetings And Cult-Like Culture Turns Many People Off.
Most Amway independent business owners can get too “religious” about the job, which has made them a little bit too scary – and annoying!
This cult-like attitude has made some of the most aggressive Amway distributors in the world of MLM!
All to sell the dream of becoming financially independent via having your own “small business.”
Nothing wrong with this but this is also primarily why the Amway company has been repeatedly accused of brainwashing both potential recruits and long-time distributors.
Compensation Plan: Can Amway Make You Rich?
Okay, so let’s cut to the chase on this one.
Let’s get right into the main thing – “Can Amway make you rich?”
As expected, only the top-level Amway distributors make big money – loads of it.
And yes those at the “Founders Emerald” as well as the “Founders Diamond” levels are living the dream.
Meanwhile, the few who are at the “Crown” level continue to make residual incomes that are borderline outrageous.
Sadly though, these groups represent only a very small percentage of all Amway distributors, as in the case of most MLMs.
Only about 48% of the total number of IBOs in the company are active and earn an average gross monthly income of $200.
Let me say that again – $200 PER MONTH!
You see now the complete picture?
For most of the IBOs, it’s going to be a swim upstream to earn a considerable income – exactly how things are with direct selling companies.
By swimming upstream, I meant going against a “very” strong current.
Simply put, you are going to have a very hard time making this work, especially if you only do it as a part-time job.
Are Amway Products Any Good?
One thing is for sure: AMWAY PRODUCTS ARE LEGIT. They are mostly safe and of high-quality.
Let’s give credit where credit’s due.
Personally, I know many people who have tried the dietary supplements by Nutrilite and said only good stuff about the products.
Nutrilite says that they own and run their certified organic farms where the plants for these dietary supplements are grown, harvested, and processed.
They are one of the few who do this.
And to fertilize the soil, they have some special Egyptian earthworms to achieve this for their organic farm.
Dietary supplements are not the only high-quality products they have.
They also boast of their cleaning products that contain L.O.C which is a revolutionary innovation that makes the product 100% biodegradable and uses organic ingredients.
Before organic was cool, Amway already was!
Must I also remind you of Amway’s Artistry line of personal care and cosmetic products which were a gigantic hit that generated annual revenue of not millions, but billions!
Have you heard of Amway’s very popular water filter called “eSpring?”
I’m sure you have as it has been a revered product when it comes to water purification. The eSpring water filter purifies tap water using a UV light and a carbon block filter.
Consumer Reports gave it an excellent rating.
I personally know one who used the eSpring product and said it was amazing.
Didn’t bother to dig deep about the science behind it.
But the eSpring purified water does taste really good!
And to name one last popular product, I just gotta mention the XS Energy Drink.
It’s a very addictive product of Amway that has gained much attention from consumers.
People are really buying them, not only because of Amway IBOs’ very aggressive sales tactic but because it really does taste good.
This product alone has brought in over $1oo million worth of annual sales across the globe. And it is all thanks to the countless IBOs who have put in more than 100% of their effort and time.
So, these are just a few of the company’s plethora of products, over 450 of them to be exact, including Satinique™ (hair care line), Home™, Atmosphere Sky™ (air treatment system line), and so on…
Clearly, Amway has managed to create several lines of products to cover every consumer’s need, which is really great.
The only thing I’m not at all sold out is its inflated price tags, which are typical of any MLM company.
Not the worst but not the best either.
From what I’ve personally gathered, Amway does seem to deliver high-quality products.
It’s just unfortunate that the Amway business has been surrounded by much controversy despite producing such impressive products.
How Amway Works
Dreaming of becoming a Founders Diamond who generates a whopping $500k a year?
Before you could even come close to becoming one, you need to start from ground zero by becoming an IBO or independent business owner for a hundred bucks.
The fun part begins in the next step.
You will be nudged to promote the Amway company to your circles including family and friends both on social media and in person and convince them that their potential costly investment is worth their bucks.
As an IBO newbie, you will be trained how to “be your best customer” and part of that training is for you to make a full switch from your current household products to Amway. They say that this is how the Amway business is done.
In case you still didn’t get it, let me tell you again: THIS WILL COST YOU MORE MONEY.
There you go.
Earlier I’ve mentioned about the PV (Point Value) and BV (Business Volume).
The math is simple. You get more PV and BV points, the more you sell. And the more PV and BV numbers you make, the higher your commission percentage gets.
You can actually compute this using the Amway commission calculator found in their web site.
But the sketchy part starts here:
Amway products’ BV is not always the same as the amount paid to purchase them.
In other words, you gotta buy loads of Amway products before you can start getting even a meager commission.
Take this, for example.
In the image below, you will see that when you buy 600 PV worth of products, it will give you $225 per month.
As per the chart, if you add all of your 100 PVs, it gives you more than the 600 PV limit which translates to 9% of BV.
Then when you add the $300 BVs, plus say the $400 BV from other purchases by the customers, it gives you a total of about $2500 BV.
Now, let’s put that in the equation: 9% of $2500 BV = $225.
A little over two hundred bucks, my friend, is your monthly commission or extra income.
The commission you earn pales in comparison to the amount of investment (which probably is well over a thousand) that you spend to purchase all of those Amway products.
Now, if you and your team continue to increase your total monthly PV and hit a 7500, you can reach a commission of up to 25%. This would definitely spike your income.
You can verify this by checking out the company’s official compensation plan.
From what I gather, after much research and study of their compensation plan, these two are for certain:
- If you don’t get what any of the the comp plan says, don’t be too hard on yourself.
- I did the research but still don’t get it at all! Lol
Kidding aside, all you gotta understand is this: the more people you have under you, the higher your chance gets of making more money.
It’s simply because the more BV your people in your downline make, the higher your group’s volume become which boosts your PV threshold and wherefore increases your commission percentage.
What Amway Doesn’t Tell You
Truth is, it’s disheartening to even begin thinking how you, as an IBO, can make new recruits.
First off is you gotta get past Amway’s bad rep if you are to become even slightly successful.
This step would require you to convince your family, friends, and total strangers to give your “business opportunity” a shot. You simply tell them that making passive income is attainable.
You might be encountering people who say stuff like:
“Is that a pyramid scheme?” or “Sorry, but I’ve tried one before and it was a complete scam.”
There might be times that you’d invite them over to ballroom meetings in a hotel for a chance to meet a “special guest speaker.”
Or maybe to one-on-one casual meetings at your favorite coffee shop where you take out a piece of paper and illustrate for them the compensation plan like the one below.
Or if you’re too busy, maybe you can do it over their homes where you draw out the plan on a small whiteboard – Pictionary style.
While all these ruckus are happening around you, your uplines are consistently there, encouraging you like pacers in a marathon to make an investment on a set of training and motivational materials aka Business Support Materials (BSMs) that are worth a fortune.
This is where a lot of issues and problems come in.
Amway has been accused of making money solely on these materials that come with really outrageous price tags.
Both potential and existing distributors are told (or brainwashed as some would call it) that to be successful in the business, you need to have a brand new mindset.
And those BSMs are your ticket to having a renewed mind and attitude which are crucial for your success.
But of course, the purchase of all these are “optional.”
Distributors are not required nor obliged to buy them (allegedly).
You will most likely hear these from new recruits:
“Tools are optional, but so is success!” or “All those I know who have been successful have used such tools.”
To be perfectly honest, you gotta have the proper mindset to succeed in any MLM business – in fact, any business at all.
The main problem here, though, lies on the costs of these BSMs (“Optional,” they say) which add up pretty fast.
We are talking about hundreds of dollars monthly, apart from the money that you are spending on Amway products for your personal use.
Question is, where does the money you spend for these BSMs go to?
I’m sure you might have guessed already. Who else but the top-level distributors!
Not only are you “encouraged to invest” on these BSMs from your uplines, but you are also urged to attend multiple seminars and conferences for more motivation and renewing of the mind sessions.
There will even be times when you’d hear someone say, “Not attending the next major function will set your business back six months!”
Their end goal, basically, is to shove as much Amway motivational and knowledge meth down your throat up until you turn into a “spokeszombie” for them.
This cult-like culture is what drives the Amway Corporation to build this strategy more and more. In fact, they’ve created an official term for those successful groups of independent business owners (IBOs):
“Professional Development Programs” or PDPs, otherwise known as “Amway Motivational Organizations” or AMOs
Under the Amway flag, these AMOs function the same way except for one thing: they can have their own products sold that would help newly recruited Amway distributors how to become successful in the business.
But let me clear something though.
I’ve nothing against such concept of exclusivity but as you can see here, they are walking a thin line between becoming aggressively annoying MLM sales people and turning into a cultic group.
This is actually very common in networking marketing businesses like Amway.
And yes, even if you are already drinking the MLM Kool-Aid, might I remind you that you still face an immense hurdle of convincing a host of other people to jump into the MLM bandwagon.
It’s like getting blood out of a stone, right?
But maybe, just maybe, if you do this long enough and consistently, you just might be able to build a huge network of IBOs and possibly make some huge residual checks on a regular basis.
But as it is with MLMs, unfortunately, the chances of this taking place are slim to none.
Facts And Myths About Amway
Myth: “All businesses have a pyramidal structure.”
Fact: In a traditional business setting, associates are usually paid less than the CEO. Most of these businesses do sell products and services as opposed to paying commission for enlisting new employees.
Additionally, an employer operating in a traditional business set up would pay their employees for their services on a monthly basis rather than the employees paying them to work for them.
Myth: “People who sell Amway can become wealthy enough to walk away from working and simply live on their income.”
Fact: Obviously, Amway wants to “sell the dream” to potential recruits without telling them prior how exactly they plan to attain the financial freedom that they promise.
Their route to financial freedom is pretty straightforward: buy their expensive training materials, carefully follow what’s being said, and voila, you are up to becoming a millionaire.
Sorry to burst your bubble but no, it just doesn’t work this way.
I don’t know anyone who has retired young and wealthy from being an Amway IBO.
Those who have reached a significant level in their income earned the majority of it from speaker fees and self-help books that they sold.
Myth: “If you don’t become wealthy in Amway, it is because you did not work hard enough.”
Fact: This is outright preposterous! This is a very common lie that potential distributors are forced to believe as a rebuttal to those who say that Amway is a scam.
Remember that the company’s failure rate surpasses that of most companies and businesses.
It’s both funny and sad to think that the majority of McDonald’s employees come home with a paycheck, while only less than 1% of Amway distributors do.
Amway: Quick Summary
- Amway is definitely a legit business that boasts of a 60-year track record with billions worth of annual revenue, earning them the title, “most successful network marketing company” in the world.
- Overall, Amway’s products are well known to use high-quality products which could attract long-term clients.
- Amway has a variety of products, over 450 of them to be exact. From skin care to health and dietary supplements, distributors have a lot to choose from.
- Amway is the most successful network marketing company in the world. And as such, they offer cutting edge training materials to help their IBOs achieve financial freedom through their materials.
- Top-level distributors earn incomes of up to 7 figures yearly – one of the highest commissions within the multi-level marketing industry
- Amway has had a long-standing bad reputation in the industry. This is all thanks to their MLM business model that gives emphasis on recruitment.
- For a hundred bucks, you can be an independent business owner or IBO for short, and you are urged to purchase expensive training materials on top of a lot of Amway products you are forced to buy for personal use.
- As in any other MLM companies. Amway emphasizes on sponsoring other people to join the company because their sales can add up to your commission percentage.
- IBOs are constantly encouraged to purchase from their upline various expensive motivational materials.
Is Amway/ Quixtar A Pyramid Scheme?
Right off the bat, yes!
Amway/ Quixtar is a pyramid scheme because their main focus is on the recruitment of new members and not on selling actual products but on selling a lifestyle.
Although this is the case, Amway still remains as the world’s most successful network marketing, raking in multibillion-dollar revenues annually across the globe.
Despite their cult-like and aggressive sales culture, Amway still manages to dupe people into joining.
Amway does sell actual products, but the business model that they follow focuses on making new recruits, also known as Independent Business Owners (IBOs).
End goal is for IBOs to build your downline.
If Pyramid Schemes Are Illegal, Why Doesn’t Amway Get Shut Down?
Any one must have been wondering why after calling it an illegal pyramid scheme, Amway still continues to operate.
And to understand why, one must delve into its history.
Amway, as you may already know, is a powerful and rich political entity, and several times for the last six decades, Amway has bent some rules to benefit and save the company.
Bottom Line: Is Amway a Scam or Will It Survive?
Amway has survived six long decades of both success and scandal. And I personally believe that they will be here for a very, very long time.
But is it really a scam?
C’mon, we all know the answer to this.
Compared to other MLMs, I kinda like Amway, from a business point of view, that is.
You gotta give Doug DeVos and Steve Van Andel credit for building the world’s largest and long-standing MLM.
Not to mention the high product quality the company offers.
If for any reason you wanna try your luck with Amway, let me say that the potential is there.
The catch is that it will require you a crazy amount of hard work before you can come close to earning the 6-figure income.
This is the primary reason why most MLM business owners lose huge amount of money as per the Federal Trade Commission or FTC.
Avoid The Scams. Start Your Own Business
By all means, avoid pyramid scams or any scam for that matter.
Do not fall into the trap of the get rich quickly scheme that most MLM companies market to potential victims.
If you really want to become an entrepreneur or business owner, do it the right way from step 1. And you can begin by NOT falling for these pyramid schemes and scams.
Believe you me, no one has retired young and wealthy from being part of such schemes.
Then figure out what winning product or service that interests you and what could add value to other people.
Remember, where there is value, there is potential income.