Is Amway A Scam?

C1REX said:
MLM is becoming a serious competition to classic business. High quality products can be bought for less.

There are so many myths it's crazy. People still saying the products are overpriced when it's easy to check. Many people did comparisons tests to show the difference.
The myth is so popular I also thought it's true.
Click to expand...

Your example in the UK is an exception. Again, it's pretty clear that Amway lowered prices and outlawed tools in the UK to avoid the bad press of getting kicked out.

But MLM in general, has to charge a lot more because the distributor's bonus is built into the cost of the product. Thus if Amway pays approximately 32% of the gross in bonuses, that means their product is marked up at least 32+% because Amway must also make a profit.

That kind of percentage is fairly high for household consumable products. And Amway partner store's products are priced even higher. Yes, you might find a deal or two here and there but generally, these products will almost always be priced higher than local retailers.
 
As far as I know MLM doesn't have to charge more. Usually has to charge about the same or less as it doesn't have to pay for advertisement and distribution that much.

Coca cola costs few cents to produce and yet nobody complains it's overpriced.

There are many price comparisons and usually Amway is cheaper than similar quality products on the market.

Some facts about mlm:http://www.kellogg.northwestern.edu...ers/FAQs on MLM Companies 7-30-2012 FINAL.pdf
 
C1REX said:
As far as I know MLM doesn't have to charge more. Usually has to charge about the same or less as it doesn't have to pay for advertisement and distribution that much.

Coca cola costs few cents to produce and yet nobody complains it's overpriced.
Click to expand...

MLM must charge more even with no advertising because the bonuses paid out on multiple layers add up to more than a normal distribution chain. Some MLM products can be competitive but overall, MLM simply costs more which is why we see $50 cases of bottled water or $75 bottle of multi vitamins.

Coca Cola is cheap to produce but I can get a 12 pack of coke at my local markets for as low as $2.99. MLM has nothing to match that price that I know of.
 
http://www.youtube.com/watch?v=UAwXPpiMG9g#t=323
This video shows MLM comparing to CocaCola.

MLM doesn't have to charge more. It can be more, less, or about the same as similar products on the market. Depends of the company.

MLM products are usually compared to the absolutely cheapest ones, rarely to similar ones at similar prices and never to the most expensive on the market.
Everything to make MLM look as bad as possible.
 
I'd like to mention that advertising isn't a negative cost. It very much pays for itself and generates profits. If it didn't, businesses wouldn't do it. A company which doesn't advertise doesn't expect to make money doing it. Believe me, companies that do it aren't being stupid - they very carefully track the return on the investment.

Since Amway is sold person-to-person, I can see why advertising isn't a big part of the budget. Distributors present products directly. The costs are hidden in the relationship, borne by the distributors instead of Amway. But this should be obvious to someone who pays for brochures for products out of their own pocket.
 
I see paid brochures as a good thing.
I decide if I want to invest 0.7GBP or not. However, I definitely don't want to pay for people who order 1000, 10 000 or 100 000 of them and the company add the cost to product prices :)


If we don't consider advertising as a negative cost then we shouldn't consider mlm distribution to be negative cost as it generates profits. If it didn't, companies wouldn't do it.
According to wikipedia both: distribution and advertising is not a negative cost.
http://en.wikipedia.org/wiki/Negative_cost
 
Last edited:
C1REX said:
I see paid brochures as a good thing.
I decide if I want to invest 0.7GBP or not. However, I definitely don't want to pay for people who order 1000, 10 000 or 100 000 of them and the company add the cost to product prices :)


If we don't consider advertising as a negative cost then we shouldn't consider mlm distribution to be negative cost as it generates profits. If it didn't, companies wouldn't do it.
According to wikipedia both: distribution and advertising is not a negative cost.
http://en.wikipedia.org/wiki/Negative_cost
Click to expand...

I think this is correct, at least from the perspective of the parent company. Amway benefits whenever the plan is presented to a new set of possible customers (and I'm counting distributorships as Amway's customers too). Whether or not the advertising distributors do on Amway's behalf is a money-maker would depend on the numbers.

I have never seen an analysis where a new distributor keeps track of all their costs. Would you be interested in doing this? You would have to wear the businessman's hat and tally up the costs in time, fuel and so on...

I am an independent business owner, so I track my costs, both tangible and intangible. I use the tangible ones for tax purposes and the intangible (time spent that isn't billable) to determine my rates. The only difficulty is in becoming "cost aware" so that incidental costs aren't overlooked. For example, a couple days ago I bought new cartridges for my printer. The receipts sat in my wallet and I just noticed and put them in my "taxes" drawer.
 
I don't check the cost yet. It's not very high yet and I have a chance to meet my friends :)

When and if the cost will rise I will track it for tax return.
 
C1REX said:
I don't check the cost yet. It's not very high yet and I have a chance to meet my friends :)

When and if the cost will rise I will track it for tax return.
Click to expand...

It's a good idea. Most business will track these metrics as a matter of course.
 
Thanks.
I haven't done any business yet so I hope to learn a lot and maybe even make some money on the way :)
I also hope I can help people do the same.

Cheers
Kris
 
C1REX said:
Thanks.
I haven't done any business yet so I hope to learn a lot and maybe even make some money on the way :)
I also hope I can help people do the same.

Cheers
Kris
Click to expand...

I honestly wish you well and thank you for being honest and open. I hope you will continue to share your journey and how you're doing. I think the UK did a good thing in helping Amway clean up.

One thing to note. It's no secret that those in Amway US who made "tons of money", pretty much did so because they sold tools. I wonder how that will work in the UK where tools are free?

Prior to the UK government intervention, only 1 or 2 people in the UK actually made some decent money.

Keep an eye on your profit and losses. It will tell you quite a story.
 
I've sponsored a friend of mine few minutes ago :) An amazing person.
All done over the internet. I'm super excited.

We agreed that it's easier to promote the internet shop that helps to save money than to promote the business opportunity. We won't talk much about big money.

We will be as honest as possible. We believe it will be beneficial to all.
The interesting fact is that nobody put money as a priority here.
All my friends who are interested gives different reasons but doing what you like in life is the most popular answer :)

I'm very fortunate to have so amazing friends :)
Thanks for good wishes. I will keep you updated.
My next step: "the first 48 hours presentation".
An easy, duplicable instruction what to do after registration.

Cheers
Kris
 
C1REX said:
I've sponsored a friend of mine few minutes ago :) An amazing person.
All done over the internet. I'm super excited.

We agreed that it's easier to promote the internet shop that helps to save money than to promote the business opportunity. We won't talk much about big money.

We will be as honest as possible. We believe it will be beneficial to all.
The interesting fact is that nobody put money as a priority here.
All my friends who are interested gives different reasons but doing what you like in life is the most popular answer :)

I'm very fortunate to have so amazing friends :)
Thanks for good wishes. I will keep you updated.
My next step: "the first 48 hours presentation".
An easy, duplicable instruction what to do after registration.

Cheers
Kris
Click to expand...

Good luck with it. I know that excitement - the thrill of starting a new venture with an uncertain outcome.
 
I've got another customer.
She is definitely not interested in business but she liked my fragrance.
It just happened it's from Amway :)
It will be a gift for her boyfriend.

4 GBP profit is definitely not worth the work. All costs are much higher than that.
However, she helps me to improve my presentations skills so I will have a chance to see her again.
 
C1REX said:
I've got another customer.
She is definitely not interested in business but she liked my fragrance.
It just happened it's from Amway :)
It will be a gift for her boyfriend.

4 GBP profit is definitely not worth the work. All costs are much higher than that.
However, she helps me to improve my presentations skills so I will have a chance to see her again.
Click to expand...

Closing a sale is the start of a relationship, not the end of it. The door is open to lending her other products to try (esp. Artistry)

The fragrances are a pretty easy sell I find, excellent quality and very competitively priced. I'm a little concerned they might be on the chopping block during the current product rationalization process though. :(
 
I hope they don't cut fragrances. I really like the one I've got.
20GBP retail price is also a bargain here. My previous one was for over 40GBP.

I've just got another customer :)
I'm surprised how easy is to retail sell :)
I was sure most would be interested in business opportunity.
 
Last edited:
C1REX said:
I hope they don't cut fragrances. I really like the one I've got.
20GBP retail price is also a bargain here. My previous one was for over 40GBP.

I've just got another customer :)
I'm surprised how easy is to retail sell :)
I was sure most would be interested in business opportunity.
Click to expand...

Just curious, since Amway UK has cut prices and doesn't allow third party tools, what do you project your net income to be at the varous levels? 1000 PV, 2500 PV, etc?
 
1000PV is about 150GBP
2500PV is about 420GBP


If I help 6 people to reach 250PV I can earn about 1725GBP/month

However, even 100GBP a month is great for me and I can keep adding up to that income.
I's not like a standard job when I start working from 0 every month.

This is calculated by income calculator on amway.co.uk.
 
C1REX said:
1000PV is about 150GBP
2500PV is about 420GBP


If I help 6 people to reach 250PV I can earn about 1725GBP/month

However, even 100GBP a month is great for me and I can keep adding up to that income.
I's not like a standard job when I start working from 0 every month.

This is calculated by income calculator on amway.co.uk.
Click to expand...

So how's your business 10 days later? Still excited about the process?
 
Yes :)

However, I'm more a customer than a businessman.
I'm very happy with the products and even more happy with UK prices.
Better products and saving money - brilliant :)
I gave maybe 10 presentations to my friends.


I can't do real business just yet as I'm very busy getting a mortgage.
I know I need to give presentation to about 2000 people to start making real money.
I need a good plan and some time to put such amount of work into the business.
 
You must log in or register to reply here.

Back
Top Bottom