Is Amway A Scam?

[C1REX]

I start to understand why Amway has so bad reputation in USA and some other countries.
It's very bad in Poland - my home country.
Too many unethical people involved. Counter productive in long term IMHO.

It's fascinating how well Amway does in China, Japan and Korea. It looks like honour is important and profitable.

In UK you can't sponsor if you don't have 5 retail customers and pass an online test with all the info about average income. There is tons of warnings about telling people that it's easy or quick money.

It's more about selling the product and giving a chance to make an extra 100GBP a month. There is much less info about bigger incomes and it's constantly repeated that it's based on personal effort.


There is a theory that making the business intentionally more difficult to manage can be beneficial for the company. It means that more serious and determined people are interested. Less people hope for quick and easy money and damage the company reputation.

 

[Joecool]

According to many statistics 95% of small business fail within 5 years.
summitbusinesssolutions.ws/docs/reasons_biz_fail.pdf
Does it mean that starting a small business is a scam and nobody should do it?

MLM success rate is not much different even considering people who join MLM just to save money and never intended to make business.
If you chose a company wisely that doesn't cost to join and you like the product then you can't lose any money. Unless you do it completely wrong.


I believe that I have much higher chance of success in MLM than in classic business. Just my opinion. Worth trying even just for training, satisfaction and being close to some amazing and successful people.


Being around people who always complain and never do anything is depressing.
(BTW: It's very rare when successful people in classic business talk bad about MLM)

Where did you get that 95% of small businesses fail in 5 years? If that were true, every visit you made to the mall would result in stores closing up. Ironically, Amway IBO's suffer an ever worse fate. I believe much more than 95% of Amway IBO's fail.

The reason why Amway is considered a scam is because there's a lot of information left out when people prospect. The Amway name isn't even mentioned until deep into the presentation in many cases. There's also the bait and switch scam that some uplines use. They use Amway as the pitch for wealth and residual income when the real business is selling these prospects tools and functions/

Amway may have reformed some of this in the UK, but only because they were under investigation and threatened with being shut down completely, In the US where there is no investigation going on, there are no price reductions or restrictions on tools. It's a scam.

 

[C1REX]

Where did you get that 95% of small businesses fail in 5 years?

Second line.
Can't post proper links yet, so here you go again:
summitbusinesssolutions.ws/docs/reasons_biz_fail.pdf


I only hear that people get scammed by dishonest people - not by the business model.

Success rate is very poor but doesn't make it a scam. That's your opinion and not a fact. There are professions with much lower success rate and very expensive to learn - models, actors, politicians, athletes etc.


If I do my best to help people save money and maybe make an extra 100GBP how it can be a scam?

BTW: UK government made sure Amway UK is not a scam.
This is not my opinion - it's UK government statement.

 

[Joecool]

Second line.
Can't post proper links yet, so here you go again:
summitbusinesssolutions.ws/docs/reasons_biz_fail.pdf


I only hear that people get scammed by dishonest people - not by the business model.

Success rate is very poor but doesn't make it a scam. That's your opinion and not a fact. There are professions with much lower success rate and very expensive to learn - models, actors, politicians, athletes etc.


If I do my best to help people save money and maybe make an extra 100GBP how it can be a scam?

BTW: UK government made sure Amway UK is not a scam.
This is not my opinion - it's UK government statement.

The Small Business Administration has different information.
http://www.sba.gov/smallbusinessplanner/plan/getready/SERV_SBPLANNER_ISENTFORU.html

Why Small Businesses Fail
Success in business is never automatic. It isn't strictly based on luck - although a little never hurts. It depends primarily on the owner's foresight and organization. Even then, of course, there are no guarantees.

Starting a small business is always risky, and the chance of success is slim. According to the U.S. Small Business Administration, roughly 50% of small businesses fail within the first five years.

The difference between actors, models, etc. is that they go in knowing it's a long shot for most. In Amway, the model is made to appear easy and get rich quick. Even if hard work is mentioned, retiring after 2-5 years (The common Amway pitch) is still get rich quick.

And yes, Amway the corporation is not doing this but people REPRESENTING Amway are doing this. For that reason, the Amway name is associated with scam, illegal pyramid, etc.

And Amway has the power to stop some of these folks but they don't. The term scam is applicable.

 

[C1REX]

Joecool - if you know somebody is scamming, then inform Amway about that. If they don't react then report that to court or something.

Amway UK suspended two Diamonds just for running websites that was against Amway rules. They do react.

 

[Joecool]

Joecool - if you know somebody is scamming, then inform Amway about that. If they don't react then report that to court or something.

Amway UK suspended two Diamonds just for running websites that was against Amway rules. They do react.

Amway UK reacts because they were under government investigation. In the US, nothing (apparent) happens. That's why the bait and switch goes on and that is also why Amway has a bad reputation in the US.

Amway's owner admitting the problems:
http://www.amquix.info/amway_directly_speaking.html

Dateline's expose on the Amway/Quixtar scam:
http://www.nbcnews.com/id/4375477/

 

[C1REX]

Difficult to comment on that as I'm not an expert. I don't know what Amway can legally do and how much money they make or lose because of that.

I believe they lose on damaged reputation. USA is huge but not the biggest market for Amway. I believe it would be financially beneficial for them if they could stop unethical behaviour amongst their IBOs.

It's hard for me to call Amway a scam if they lose money on that.

 

[Joecool]

Difficult to comment on that as I'm not an expert. I don't know what Amway can legally do and how much money they make or lose because of that.

I believe they lose on damaged reputation. USA is huge but not the biggest market for Amway. I believe it would be financially beneficial for them if they could stop unethical behaviour amongst their IBOs.

It's hard for me to call Amway a scam if they lose money on that.

Amway and the tool companies have a symbiotic relationship in the US. The tools companies recruit new IBO's, they teach product loyalty and the 100 PV defacto quota. In exchange, they scam those same prospects into buying tools and Amway in turn, ignores (for the most part) unethical behavior.

Amway at one time thought about taking action but the large kingpin diamonds threatened a boycott and the corrective action never happened.

For that reason, Amway's reputation in the US is horrible and people actually make jokes about it here.

 

[C1REX]

I understand your point but it makes no sense.
Amway makes no money on the tools and most likely lose LOTS of money on damaged reputation.

You admit people make jokes about Amway in US.
It looks like Amway is a victim and not a beneficent of the scam. They lose money on that.

 

[Joecool]

I understand your point but it makes no sense.
Amway makes no money on the tools and most likely lose LOTS of money on damaged reputation.

You admit people make jokes about Amway in US.
It looks like Amway is a victim and not a beneficent of the scam. They lose money on that.

It does make sense. The tool companies teach their IBO's and prospects to be loyal to Amway products and to buy/sell 100 PV each month. That's Amway's benefit. Then in exchange, the tool companies (owned by the diamonds) scam their downline into thinking they need these tools and functions to succeed. There are often lies and deception about the tools which Amway apparently ignores because these same IBO's are being recruited and trained to be loyal to Amway products by the tool companies, thus a symbiotic relationship.

 

[C1REX]

It would make sense if it would work but it doesn't.
It would make sense if Amway would make extra money and not losing on damaged reputation. Now people make jokes and the company lose money.

Amway in US is not doing that well considering the size of the country and general wealth.


I've checked the audio and the owner is VERY against this scam that hit the company very badly. They are against making money on tapes or buying position (making points by consumption)

"Now, the tape business, if it is not used as a support for the Amway business, will oftentimes be an illegal business -- in fact, it could be called a pyramid -- because, d -- does not get sold to the consumer. Which means that all the tape business does is take money out of the organization, and because the final person can't retail it, it never brings money into the organization. Now, I'm not arguing about the value of it -- we accept the fact that motivation is vital to this business. Good, honest motivation is important to the business. But, it must be motivation that builds the business -- not become a business in itself."

"You know, we've been talkin' to you for years that you don't buy a position in Amway, you earn it, and, here, blatantly, being taught inside a meeting, and then being told don't tell anybody, are methods that go contrary to everything we've heard.

We've always said you earn your position in Amway and you don't buy it. And here I see it being done, and I want to tell you, we're -- monitoring new Directs, we're monitoring anybody who gets a higher award, we have a whole department today that is monitoring, just because we have some people who got abusive with it.

Now, I just got to lay these things on you, I -- I need your attention, and I -- some of you guys who are doing it is the one (sic) I am talking to. I'm not talking to the rest of you. But some of you continue doing things that we are not going to tolerate, and we are in the process of establishing a whole new policing department in this company, because we have been unable to voluntarily get you to decide to do the things that are right and will improve the image that we have."


There is LOTS on the audio about how badly the scam hits the company.

 

[Joecool]

It would make sense if it would work but it doesn't.
It would make sense if Amway would make extra money and not losing on damaged reputation. Now people make jokes and the company lose money.

Amway in US is not doing that well considering the size of the country and general wealth.


I've checked the audio and the owner is VERY against this scam that hit the company very badly. They are against making money on tapes or buying position (making points by consumption)

"Now, the tape business, if it is not used as a support for the Amway business, will oftentimes be an illegal business -- in fact, it could be called a pyramid -- because, d -- does not get sold to the consumer. Which means that all the tape business does is take money out of the organization, and because the final person can't retail it, it never brings money into the organization. Now, I'm not arguing about the value of it -- we accept the fact that motivation is vital to this business. Good, honest motivation is important to the business. But, it must be motivation that builds the business -- not become a business in itself."

"You know, we've been talkin' to you for years that you don't buy a position in Amway, you earn it, and, here, blatantly, being taught inside a meeting, and then being told don't tell anybody, are methods that go contrary to everything we've heard.

We've always said you earn your position in Amway and you don't buy it. And here I see it being done, and I want to tell you, we're -- monitoring new Directs, we're monitoring anybody who gets a higher award, we have a whole department today that is monitoring, just because we have some people who got abusive with it.

Now, I just got to lay these things on you, I -- I need your attention, and I -- some of you guys who are doing it is the one (sic) I am talking to. I'm not talking to the rest of you. But some of you continue doing things that we are not going to tolerate, and we are in the process of establishing a whole new policing department in this company, because we have been unable to voluntarily get you to decide to do the things that are right and will improve the image that we have."


There is LOTS on the audio about how badly the scam hits the company.

Despite the bad reputation, Amway is doing okay in the US. They supposedly had several years of sales growth despite the bad reputation. Apparently there are still enough people who can get enticed into joining. However, what many people are sold is not Amway, but hope.

The attrition rate is still very high but apparently there are enough rubes to take the place of the people who are quitting to keep the business flowing, and to keep Amway profitable.

 

[C1REX]

It's doing OK but it's doing better in China, Japan and Korea.
Some very small countries are doing almost as well as USA.

It looks like the damaged reputation costs them more than the potential extra profit. Scammed people drop out, never come back and make sure everybody knows about the scam.
The company is officially against that for at least 31 years.


Could they do more? Probably, but definitely don't make more money on bad reputation.
They are victims. Same as ethical IBOs.

 

[Joecool]

It's doing OK but it's doing better in China, Japan and Korea.
Some very small countries are doing almost as well as USA.

It looks like the damaged reputation costs them more than the potential extra profit. Scammed people drop out, never come back and make sure everybody knows about the scam.
The company is officially against that for at least 31 years.

Could they do more? Probably, but definitely don't make more money on bad reputation.
They are victims. Same as ethical IBOs.

I'm not sure the bad reputation has that much of an effect on Amway's bottom line. Despite the reputation, they still have revenue growth and I believe that a clean up would cause a temporary, but massive drop in sales. For that reason, I believe Amway never took action despite the owner admitting that the tools were likely an illegal pyramid.

Not sure if you're aware but Amway in China is very different from how Amway runs in the US. I believe other countries all have some variations, like Amway UK for example.

 

[C1REX]

I know that Amway in China is a hybrid with lots of retail shops and limited number of sponsors. Seems like the most difficult way to distribute but works amazing.
New market and already few times bigger than in USA.


How a clean up in USA would cause a massive drop in sales?
You may be right but explain your logic, please.

Suspending few contracts would be about few thousands $$ less in sales. The whole structure would be unchanged - just 1 position taken away. Similar to taking an inactive IBO from the system.

 

[Joecool]

How a clean up in USA would cause a massive drop in sales?
You may be right but explain your logic, please.

Lets say for example, that Amway said no tool sales in the US. The diamond leaders in the big groups such as WWDB, BWW, and Network 21 could quit and take their entire groups with them to another MLM. Yes, they might have to sit out 6 months to satisfy Amway's rules about competing MLM's, but imagine how sales can be affected if maybe a third or half of all US IBOs left and went to another MLM? Amway might lose hundreds of millions to half a billion dollars in sales.

There was a sizable dip in sales when the group called TEAM left Amway over a dispute some years ago. They mostly ended up in Mona Vie.

 

[C1REX]

You might be right but other markets show that having lots of people who scam and damage the reputation of the company don't build the biggest market. Even when having all advantages of US market.

It's hard to believe that Amway in UK and USA is the same company.

I still believe that Amway is a victim. No way they make money on bad reputation.
Shame we can't be more precise with numbers to check how much exactly they gain/lose on that. Our opinions are based on our beliefs

Unless you have an access to some numbers.
Do you know how much they lost after the "TEAM" left and how quickly they recovered?

Regards
Kris

 

[Joecool]

You might be right but other markets show that having lots of people who scam and damage the reputation of the company don't build the biggest market. Even when having all advantages of US market.

It's hard to believe that Amway in UK and USA is the same company.

I still believe that Amway is a victim. No way they make money on bad reputation.
Shame we can't be more precise with numbers to check how much exactly they gain/lose on that. Our opinions are based on our beliefs

Unless you have an access to some numbers.
Do you know how much they lost after the "TEAM" left and how quickly they recovered?

Regards
Kris

Team left Amway - I believe in 2006 or 2007. You can see if Amway has posted their sales from those years and the years after.

As I said, despite the bad reputation, Amway continues to increase in sales in the US. I'm pretty sure Amway is doing just fine in the US.

 

[C1REX]

1	China	             $4,385	+1%
2	Japan	             $1,185	+2%
3	Korea	             $885	+2%
4	United States        $861	+5%
5	Russia	             $629	+19%
6	Thailand	     $568	+10%
7	India	             $493	+7%
8	Taiwan	             $340	+8%
9	Malaysia	     $263	+8%
10	Ukraine	             $150	+7%

It seems that USA is doing OK but it's on the market for over 50 years.
Countries with high ethical standards are doing better in much less time.
They are in China since 1995.

I've found the info about TEAM and LIFE. http://amthrax.wordpress.com/2011/1...onavie-vs-team-quixtar-vs-team-amway-vs-team/

They were kicked out from Amway. It was a clear scam and serious damage to Amway reputation. Amway was a victim and lost money on that.

I'm personally very proud I'm in MLM and I'm very fortunate to have an amazing upline. Great, great people.

 

[marplots]

I'm personally very proud I'm in MLM and I'm very fortunate to have an amazing upline. Great, great people.

Are you making any money?