Is Amway A Scam?

[icerat]

How to make money with Amway?
Buy the products at auction and sell them on ebay:
http://www.mlive.com/business/west-michigan/index.ssf/2012/06/ebay_seller_surprised_to_be_su.html

But be careful or you might be sued.

Amway was donating products to a local charity which they were selling through their thrift stores to raise money. This guy was working for the charity as a volunteer and realised there was a deal to be made so bought them up and sold them on ebay, in competition with Amway's independent agents.

I think it's pretty obvious why Amway might reasonably have been upset about this.

The lawsuit was dropped. And what does the man involved say about it?

"they treated me with respect and the outcome was good for both of us."

 

[aggle-rithm]

I realize this proves nothing, but everyone I've come across who sells Amway behaves as if they're in a cult. They're extremely evasive when trying to pull you in, they don't tolerate any dissenting views, and they become extremely hostile if you reject their philosophy.

I had one guy go through his pitch for twenty minutes without telling me what he was talking about. I thought he might have a development opportunity for me, which was the only reason I was talking to him in the first place, but whenever I asked him to tell me specifically what he was proposing he just said, "I'm getting to that!" and went right on babbling about e-commerce and shifting economic trends.

I've never seen a legitimate business person behave this way, only Amway distributors. Why is that?

 

[Wowbagger]

...whenever I asked him to tell me specifically what he was proposing he just said, "I'm getting to that!" and went right on babbling about e-commerce and shifting economic trends.

Sounds like the Amway pitch I was given! The guy gives out business cards, with his business' name on it, but NOT the word "Amway".

He goes on for a while about how MLM systems are "better" than working a normal job for a boss, and things like that.

It started to sound an awful lot like "Amway" to me, but I didn't know a lot about it, back then. My suspicions weren't confirmed until the end, when he pulls out a product catalog that happened to have an Amway logo in the corner.

At one point I ask him flat out: "So, what are the risks?", and he responds quite confidently: "There are none!". But, I already knew that lots of people who got into Amway gave up on it. I didn't know why, at the time, but that was the reputation of the system, in my head.

This was over 10 years ago, though. Perhaps Amway put better effort into making sure better people are getting into the system by now?!

 

[icerat]

I realize this proves nothing, but everyone I've come across who sells Amway behaves as if they're in a cult.

Out of interest, how do you know if someone's involved in Amway? Are they tattooed on the forehead or something?

I've never seen a legitimate business person behave this way, only Amway distributors. Why is that?

The #1 problem with Amway and Multilevel Marketing

A plus of network marketing: anyone can join
A minus of network marketing: anyone can join

 

[Wowbagger]

There's pluses and minuses, that's a minus.

Why is it necessary?

They covered it better.

That is a non-answer. You should consider working on your communications skills.

You don't think just letting people give it a go, risk free, so they can decide themselves is a better option?

If Amway was really a legitimate business, selling superior products, you'd think they would care about the quality of people selling them.

You'd think they would try to do something about their 50% inactive rate, and stuff like that.

Perhaps from the perspective of someone working a lousy job, and never thought of being their own boss, before, Amway becomes appealing... to their emotions during the pitch, at any rate.

But, from someone who was already seriously aiming to be an entrepreneur, it looks like a lousy system.

Depends on the individual of course.

Another non-answer. You really should work on your communications skills.

time and network leveraging

Can you elaborate on these?

If the MLM system has benefits beyond making sales to large customers who would otherwise bypass buying from you... I would like them better described.

Only if I order in larger volumes, and get a larger volume discount. Then I pocket the difference. Pretty much just like "traditional" distribution.

How many levels of upline sponsors does a new IBO typically have?

That number will be appropriately linked to whoever introduced you to the products.

Would I be able to change who I am "linked to", if I find someone else offering the products at a lower price?

 

[icerat]

Why is it necessary?

already told you

That is a non-answer. You should consider working on your communications skills.

So you'd prefer some (relatively) anonymous guy on the internet to answer your question rather than experts who spent years researching the question?

Says a lot really.

You'd think they would try to do something about their 50% inactive rate, and stuff like that.

What makes you think they don't? Especially since I already told you they do.

But, from someone who was already seriously aiming to be an entrepreneur, it looks like a lousy system.

To someone (me) who was already an entrepreneur, and has been for more than 25 years, it looks like a great system.

Another non-answer. You really should work on your communications skills.

You should work on your link clicking skills. Amazing what you could learn.

Can you elaborate on these?

Time leveraging for the same reasons business owners employee people.
Network leveraging because you now have potential access to a larger network.

How many levels of upline sponsors does a new IBO typically have?

Read FTC vs Amway, they cover it there. There's those link clicking skills again!

Would I be able to change who I am "linked to", if I find someone else offering the products at a lower price?

Everyone buys direct from Amway at the same price. Volume discounts are calculated monthly and paid as a rebate. If someone wants to offer you kickbacks separately that's their business. Yes you can swap, but you must be inactive for 6 months to do so, unless you have a decent reason.

 

[Wowbagger]

already told you

You did not explain why "leveling the playing field", by restricting advertising, is necessary.

If I was to run my own business, I would think the freedom to market and advertise my business as I see fit, would be important.

So you'd prefer some (relatively) anonymous guy on the internet to answer your question rather than experts who spent years researching the question?

I will read the 121 pages of legalese you linked to, when I have time.

But, these are important questions one must answer, if they are to defend Amway on its own merits. You need to develop some good, concise answers for them, if you wish to succeed in this defensive endeavor.

If you can't answer these questions, it gives the appearance (accurate or not) that you never really put much thought into what the merits of Amway really are.

I am asking these questions for BOTH of us: I would like the answers. And, I would like YOU to THINK about how to formulate such answers. It would strengthen your ability to defend the system in threads like this, and on your blog.

What makes you think they don't? Especially since I already told you they do.

Is the non-active rate for IBOs still around 50%, or has it lowered substantially, recently?

If it is not much lower, then they don't seem to care.

If so, what steps have they taken?

To someone (me) who was already an entrepreneur, and has been for more than 25 years, it looks like a great system.

Well, you also seem to think a programming job doesn't "involve people". But, I digress.

I would think more entrepreneurs would aim to have more freedom in their business, as far as I was ever able to tell.

Time leveraging for the same reasons business owners employee people.
Network leveraging because you now have potential access to a larger network.

This doesn't explain anything.

What makes an MLM system better for "time leveraging" than hiring employees in a conventional business?

What are the various ways the network can be leveraged, in an MLM system; that are more difficult or impossible to do in a conventional business?

Everyone buys direct from Amway at the same price.

What's the point of the MLM aspect, then? Remind me.

 

[tyr_13]

So you're not going to bother reading the paper that says something different to what you claim it says?

No, you're not going to back up your claim that the paper says what you claim it says. I'm done looking through your sources just to find that you're misrepresenting it.

Yes, you were talking about inventory loading. Unfortunately you seem ignorant on the subject so don't even know enough to know what you are talking about.

You're cherry picking. I wasn't just talking about inventory loading, and I'm not ignorant enough to fall for it.

So it appears she inventory loaded, a violation of Amway's rules, and clearly a stupid thing to do even without knowing the rules. She could have returned within 6 months for a full refund, even if used, or if it's unused product she could return it pretty much any time for a partial refund. She chose to purchase inventory she did not want herself and had no orders for, and she chose not to return it. Then she complained? I gotta say, I ain't feelin the sympathy. Then again, it might just be you whining.

And if she had you'd say she wasn't really working, doing little to no work, not giving it enough effort and it's whining that way too!

Again, you're so good at deflection that I'm sure you're one of Amway's most successful.

 

[icerat]

No, you're not going to back up your claim that the paper says what you claim it says. I'm done looking through your sources just to find that you're misrepresenting it.

Seems you were done with that before you even started, since you haven't done it.

You did not explain why "leveling the playing field", by restricting advertising, is necessary.

Yes, I did

If I was to run my own business, I would think the freedom to market and advertise my business as I see fit, would be important.

Then don't get in to franchising or network marketing or a multitude of other businesses where contracts will restrict you.

If you can't answer these questions, it gives the appearance (accurate or not) that you never really put much thought into what the merits of Amway really are.

Yeah, the fact I've already answered them multiple times on this thread would have nothing to do with it

Is the non-active rate for IBOs still around 50%, or has it lowered substantially, recently?

You do know that fewer people actively building and more just being customers means more profit for those that are?

That's not a bad thing.

Well, you also seem to think a programming job doesn't "involve people". But, I digress.

I never said any such thing. Do you think a programming job involves dealing with people as much as say, selling insurance?

What makes an MLM system better for "time leveraging" than hiring employees in a conventional business?

Less risk. You only pay them if they get results.

What are the various ways the network can be leveraged, in an MLM system; that are more difficult or impossible to do in a conventional business?

There are incentives to promote the products/services/opportunity through your network. That does not exist through simple customer referral.

What's the point of the MLM aspect, then? Remind me.

Do you not even have the most basic understanding of the model? They purchase direct from Amway, but their volume still counts toward your sales volume, contributing to your volume discounts. Historically they would have purchased through their sponsor or other upline, who would have handled all deliveries and rebates. Today that's all done for you.

 

[Zelenius]

Sounds like the Amway pitch I was given! The guy gives out business cards, with his business' name on it, but NOT the word "Amway".

He goes on for a while about how MLM systems are "better" than working a normal job for a boss, and things like that.

This has happened to me so many times over the years. And you're right, they at least know better than to mention the word "Amway" these days. I know, I know, it's because all those anti-Amway fanatics have been spreading vicious lies about Amway, this is why it has such a terrible reputation.

In case anyone here forgets, although I never became an IBO, I've been to Amway seminars, other MLM seminars and meetings, thoroughly researched Amway, have had family members and friends and ex-friends who were Amway IBOs, and been lectured about it countless times.

Icerat as far as I can tell is inadvertently accomplishing the opposite of what he claims he is trying to do, at least here on JREF. Other people on this thread have said the same thing; they think even less of Amway because of his antics.

 

[marplots]

So if you go down your local store, buy something, realise it wasn't what you wanted, and don't return it - it's the stores fault?

Depends. Am I being pressured not to return it by other people who work for the store? And isn't the store my aunt or boss or someone else I know? After all, that's why I purchased from them in the first place. And am I admitting failure if I return an item to the store?

Isn't it the case that items which are returned lower the income of the upline as well as Amway?

Nobody is responsible for their own decisions. They're all somehow miraculously forced in to doing things - I can only surmise through some kind of psychic powers! And the companies have managed to get away with it by using these same psychic powers on governments around the world!

Certainly you are aware that people can be influenced? How is it that anyone ever signs up for Amway in the first place unless they are presented with the plan and convinced it's a good idea? I'm surprised you aren't aware of how we can be influenced to make bad decisions. This is the heart and the engine of scams everywhere.

Remember, the naive person in this equation is the new business owner who is being mentored and guided. Of course they listen to those who, ultimately, profit from the newbies mistakes. I find that unethical and the story cited is just one example of how it happens.

 

[icerat]

Since quite a few on this forum appear not to like clicking on links to read information, and many don't actually bother reading thread posts either, thought I might try encouraging to watch instead.

Attorney Jeff Babener, who specialises in multi-level marketing , recently posted a series of videos from a 1997 court trial involving an MLM. There's a couple of videos covering the corss and direct examination of Professor Charles King and other experts. Quite long, and a bit dated, but worth watching if you have a sincere interest in learning from experts and understanding how the model works.

At about 16:20 Charles King is asked to explain how the model works.



The other videos, with links in order and a bit of description is available on Babener's website

 

[marplots]

Amway was donating products to a local charity which they were selling through their thrift stores to raise money. This guy was working for the charity as a volunteer and realised there was a deal to be made so bought them up and sold them on ebay, in competition with Amway's independent agents.

I think it's pretty obvious why Amway might reasonably have been upset about this.

The lawsuit was dropped. And what does the man involved say about it?

"they treated me with respect and the outcome was good for both of us."

Maybe that's why you can still find Amway products on ebay today. Amway was unable to overcome the "first sale" doctrine.

Here is what one blogger had to say about it: (http://amwayscheme.blogspot.com/2011/08/get-amway-products-cheaper-by-not.html)

I recently did some searched on ebay and craigslist and if you google ebay amway products or craigslist amway products, you get hoards of stuff for sale. Many of them at prices that cannot be matched even by Amway. Maybe a wise person would just buy them and return them to Amway, or buy the unopened tools and return them to upline. Apparently the IBOs who are selling these gems could not or would not simply return them to Amway or their upline. How can that be when Amway apologists swear on a stack of Bibles that returning stuff is so easy and convenient?

I checked. There are sets of glister on sale on ebay, just as described. I found 37 results with the search term "glister toothpaste."

So what's going on here?

 

[marplots]

I realize this proves nothing, but everyone I've come across who sells Amway behaves as if they're in a cult. They're extremely evasive when trying to pull you in, they don't tolerate any dissenting views, and they become extremely hostile if you reject their philosophy.

This was my experience as well. Very much a "cult" vibe.

 

[icerat]

Icerat as far as I can tell is inadvertently accomplishing the opposite of what he claims he is trying to do, at least here on JREF. Other people on this thread have said the same thing; they think even less of Amway because of his antics.

Yes, as I already noted that people who already have a view of something - eg "think less" - are usually likely to strengthen their viewpoint "think even less" in response to evidence contrary to their beliefs. It's a well established psychological phenomenon.

On the other hand over the years I've also received several PMs from people praising my comments here and the fact I keep providing evidence to back up what I say, yet are constantly attacked with the same old hearsay. They suggest to me I shouldn't waste my time.

Probably true, but I paid for the full half hour

In any case, I write primarily for the lurkers, not the committed anti-mlmers who already know what they believe and nothing I say will change their minds. I know that.

 

[tyr_13]

Seems you were done with that before you even started, since you haven't done it.

And the last desperate hand wave. You can't cite the section that says what you say it says because it doesn't say it. If I go through that link again and can't find it, you get to keep claiming I don't want to find it.

 

[icerat]

I checked. There are sets of glister on sale on ebay, just as described. I found 37 results with the search term "glister toothpaste."

So what's going on here?

Well, as you point out there's only 37 results, so clearly there's not much of an issue with people getting left with stock and Joecool is exaggerating.

Of those 37 most (all?) seem to be selling for higher than prices available to IBOs too, so it's pretty clearly not people just trying to recoup expenses

 

[marplots]

Since quite a few on this forum appear not to like clicking on links to read information, and many don't actually bother reading thread posts either, thought I might try encouraging to watch instead.

Attorney Jeff Babener, who specialises in multi-level marketing , recently posted a series of videos from a 1997 court trial involving an MLM. There's a couple of videos covering the corss and direct examination of Professor Charles King and other experts. Quite long, and a bit dated, but worth watching if you have a sincere interest in learning from experts and understanding how the model works.

At about 16:20 Charles King is asked to explain how the model works.



The other videos, with links in order and a bit of description is available on Babener's website

I don't think we are disputing how the model works, we are claiming the model doesn't reflect the reality. Models are great, but they are, after all, only models.

 

[icerat]

And the last desperate hand wave. You can't cite the section that says what you say it says because it doesn't say it. If I go through that link again and can't find it, you get to keep claiming I don't want to find it.

You stated that people were buying "items they hope to sell but never either sell or consume"

This is inventory loading. I said the FTC found no evidence it was true. You dispute that. Your partially right. They found evidence it wasn't true.

The FTC vs Amway decision mentions "inventory loading" explicitly fourteen times. Some examples -

• Amway's buy*back rule deters inventory loading
• Amway's 70% rule deters inventory loading
• Amway's ten customer rule deters inventory loading
• Two other Amway rules serve to prevent inventory loading
• The ALJ found that the [rules] are enforced, and that they serve to prevent inventory loading
• Amway has prevented inventory loading

Next time try the page search function in your browser. It's much quicker

 

[icerat]

I don't think we are disputing how the model works, we are claiming the model doesn't reflect the reality. Models are great, but they are, after all, only models.

Umm .... "works" is a key word you seem to be misinterpreting