Is Amway A Scam?

[ChrisBFRPKY]

The only folks making money in Amway are the owners and those at the "Diamond" level or whatever it's referred to in modern times. They have mass conventions to make believers out of their newest recruits with plenty of "You can do it!" and "it only takes 2!" "Get out there and draw those circles!" "You can be a diamond too!"

And the poor newbies are spending money they don't have in the first place to buy a start up kit, presentation equipment, (easel board, motivational books and tapes). Then they must buy highly overpriced products that are said to cost so much because they're "concentrated". All to make their monthly points quota and all that for a few bucks. If they make it that is, they earn maybe $12?

If anyone tells you Amway is anything other than a multilevel marketing scam, run, do not walk.

 

[angrysoba]

Yeah, you're right. Nobody buys that crap anymore.

Everytime I try to buy their stuff they're all sold-out. No wonder nobody buys their crap no more.

 

[icerat]

The only folks making money in Amway are the owners and those at the "Diamond" level or whatever it's referred to in modern times.

I made money from Amway when I built an Amway business. Still get paid from it for that matter, more than a decade later. I was nowhere near "Diamond".

Hmmm ... should I believe you or the cash in my account? Tough choice ...

They have mass conventions to make believers out of their newest recruits with plenty of "You can do it!" and "it only takes 2!" "Get out there and draw those circles!" "You can be a diamond too!"

The type of conventions you talk about are typically run by third party companies, all of which have different cultures. Fortunately I never encountered this kind of over the top hype.

How many different types of Amway-related conventions have you been to, Chris?

And the poor newbies are spending money they don't have in the first place to buy a start up kit, presentation equipment, (easel board, motivational books and tapes).

Most businesses take some money to get up and running. If you haven't got any, or aren't willing to spend any, then perhaps you shouldn't be starting a business?

Then they must buy highly overpriced products that are said to cost so much because they're "concentrated".

I find the products competitively priced, that's why I continued to buy them even after I moved countries.

Chris, how many Amway products have you tried?

All to make their monthly points quota and all that for a few bucks.

You have been misinformed. There is no points "quota".

If they make it that is, they earn maybe $12?

Sounds like you're talking about someone just buying for themselves, and not building a business. You won't earn anything doing that, though you might get a few bucks back in volume rebate, yes.

If anyone tells you Amway is anything other than a multilevel marketing scam, run, do not walk.

It uses multilevel marketing, but it's not a scam - though of course, like any business, scammers can use it that way if they so choose.

 

[marplots]

(some snipped)
Great, so lets get to a proper discussion instead of the silly insults and platitudes.

What concerns you, morally, about Amway?

(some snipped)
It uses multilevel marketing, but it's not a scam - though of course, like any business, scammers can use it that way if they so choose.

And that's my problem. They do so choose. The lack of barriers to entry make is so much easier to operate unethically.

The first thing, right out of the box, is selling to family and friends by leveraging existing relationships. If you do not find this a tainted practice, then we already have a clear difference of opinion.

 

[Scopedog]

I made money from Amway when I built an Amway business. Still get paid from it for that matter, more than a decade later. I was nowhere near "Diamond".

How much money does Amway now make for you make per month? How much money did it make for you per month when you were actively involved after all Amway-related expenses like purchasing more products or seminars or whatever?

 

[icerat]

And that's my problem. They do so choose. The lack of barriers to entry make is so much easier to operate unethically.

Do you have any evidence or data to suggest whether it is a minor problem or a major problem?

Here's some data I have -

1. In BERR vs Amway UK the case judge and appeal judges remarked -

• over a fourteen year period at Amway not a single IBO had ever complained to the Business Conduct Department that he or she had been enticed to become an Amway IBO on the basis of "easy money" or the prospect of substantial financial rewards based on little or no effort.
  
• there were only two written complaints which concerned the presentation of the Amway business opportunity in the five year period from January 2001 to December 2005
  
• The Secretary of State had no case that there was a body of justified complaints made against the company

2. When a parliamentarian queried the NSW (Australia) Minister for Consumer Affairs about Amway, the Minister responded -

• Complaints against Amway or Amway distributors are very few and indicate little cause for concern.

3. In a global survey of perceptions of direct selling (including Amway), conducted by the University of Westminster, the researchers discovered that -

• People who have "had dealings with direct sellers have very positive perceptions regarding direct selling"
• 90% of previous customers would use this channel of distribution again (98% in the US) and 81% would recommend families and friends do

4. When Quixtar (Amway) elected to settle a class action lawsuit, the administrators successfully contact 97% of all IBOs in the US over the previous decade (more than 2 million people) and offered them compensation if they felt unsatisfied with their experience, including cash payouts for losses.

• Less than 3% requested compensation

5. The Better Business Bureau reports that they've received only 10 complaints regarding Amway in the previous 3 years (only 2 regarding sales practices) and they were all resolved.

6. When two former IBOs launched a class action lawsuit against Amway Canada, despite extensive advertising not a single additional person joined the class action and one of the original IBOs dropped out.

Your apparent belief there's a "problem" does not appear consistent with these findings. I await your evidence.

The first thing, right out of the box, is selling to family and friends by leveraging existing relationships. If you do not find this a tainted practice, then we already have a clear difference of opinion.

1. I think it would be totally inappropriate to "leverage" an existing relationship in order to make a sale. I would note that the University of Westminster study I cited above indicated that 58% of respondents indicated they had bought from family or friends(note: that means 42% bought from someone they didn't know) and over 90% would purchase through the same channel again. Clearly few people feel "leveraged". Do you have evidence to suggest otherwise?

2. I also think it would be totally bizarre to have a business and refuse your family and friends as customers. Don't you?

 

[icerat]

How much money does Amway now make for you make per month? How much money did it make for you per month when you were actively involved after all Amway-related expenses like purchasing more products or seminars or whatever?

When I was active at peak I was profiting a of couple thousand a month thereabouts. I reached profitability within a month or two of starting.

Just to note, product purchases for personal use are not a business expense. To claim them as such would be fraud. Ironically it's people who claim MLM is a scam, like Jon Taylor, who promote that (illegal) idea.

Now it's anywhere between a few bucks and a thousand bucks, depends what people buy in any given month. I don't think there's been a month when it's been zero, but there may have been. I don't watch it closely. The network is wholly static with nobody working to expand the network, and has been for a decade, just people buying stuff they want (some registered for member pricing, some paying full price) when they want it.

 

[marplots]

Do you have any evidence or data to suggest whether it is a minor problem or a major problem?

Here's some data I have -
(snipped for brevity)
Your apparent belief there's a "problem" does not appear consistent with these findings. I await your evidence.

Here ya go:

1. I think it would be totally inappropriate to "leverage" an existing relationship in order to make a sale. I would note that the University of Westminster study I cited above indicated that 58% of respondents indicated they had bought from family or friends(note: that means 42% bought from someone they didn't know) and over 90% would purchase through the same channel again. Clearly few people feel "leveraged". Do you have evidence to suggest otherwise?

Yes. A Westminster study showing that 58% bought from family or friends. Note, this doesn't include those that were approached by family or friends but managed to beg off or avoid buying. And of course they would do it again. Don't you want to help mom or brother Jim grow his business? That's the point of leveraging family and friends - it's an easy sale, people buy because of the relationship, not the product alone.

Ask yourself this. How many non-MLM products you buy (the hundreds or thousands of products) are purchased from family or friends?

Are you claiming that a standard sales practice in Amway/MLM isn't to sell to family or friends? Or, are you saying that it is, but doesn't seem shady to you?

 

[icerat]

Here ya go:

Oh right, so a google search - and not even evaluating the results - trumps multi-year investigations, peer-reviewed published reports, independent expert analysis etc.

You know, I'm not sure if you should trust Google. By your methodology they're apparently a great deal scammier than Amway.

Yes. A Westminster study showing that 58% bought from family or friends. Note, this doesn't include those that were approached by family or friends but managed to beg off or avoid buying.

You completely avoided the fact the majority of the respondents had positive views of the industry.

And of course they would do it again. Don't you want to help mom or brother Jim grow his business?

If I like and would use their products of course I would. Wouldn't you?

That's the point of leveraging family and friends - it's an easy sale, people buy because of the relationship, not the product alone.

And what if it is a worthwhile product at good value, and you give your family and friends a better price?

Haven't they leveraged you for a better deal?

A win:win isn't it?

Ask yourself this. How many non-MLM products you buy (the hundreds or thousands of products) are purchased from family or friends?

At present, none that I can think of, at least not that were friends before I started business with them. I did recently move cities though! Quite a few locals are friends now, and we maintain a business relationship as well.

In the past I've bought products of family and friends, yes, and will do so in the future.

I'm not quite sure what point you are trying to make? That it's bad that I buy stuff of my friends and family?

Are you claiming that a standard sales practice in Amway/MLM isn't to sell to family or friends? Or, are you saying that it is, but doesn't seem shady to you?

I'm saying it's standard practice if you start a business to let your friends and family know about it.

If you started a business, wouldn't you tell your friends and family about it?

I find it shady that you apparently think people should keep it a secret.

My experience both with Amway and other (non-mlm) businesses I own is that some buy from you and some don't. And it's irritating (no matter what type of business) when a friend or family buys from a competitor without talking to you first!

 

[marplots]

Icerat,
The problem with your statistics are that they don't reach the population we want to ask. Of course, if I filter by current customers/distributors (and, I have to admit, those categories seem to flip back and forth), I'm not measuring the people who think Amway is a scam - those people are not answering the questions.

One might as well ask a church full of Baptists if they think salvation is a good idea or not.

Since you have the expertise in this, how many people stay with Amway a year, or five years as a distributor? And of those that leave, why do they leave?

Alternatively, of those who see "the plan," how many join?

The people we should ask are the ones that have become allergic to Amway. Anyone in Amway has a vested interest.

Also, the question isn't whether Amway and MLM's can't be ethical. It isn't whether it is possible. The question is what actually happens. For all I know, one can be an ethical drug dealer. And I'll wager a drug dealer can satisfy customers and make money too. But drug dealing isn't an ethical activity as usually practiced. That's the question. All the rest is just a bad paint job.

So, yes. Read the posts that come up in Google under "Amway is a scam" and evaluate what those people have to say. Ask what their motivation to say it might be. I propose they have no reason to lie.

 

[icerat]

Icerat,
The problem with your statistics are that they don't reach the population we want to ask. Of course, if I filter by current customers/distributors (and, I have to admit, those categories seem to flip back and forth), I'm not measuring the people who think Amway is a scam - those people are not answering the questions.

So people who register complaints aren't the right sample.
Every single Amway IBO for more than a decade aren't the right sample.
A representative random sample of over 4000 members of the public isn't the right sample.

Since you have the expertise in this, how many people stay with Amway a year, or five years as a distributor?

First year renewal rate in 2006 was 31%. A 2011 trial program improved that to 76%.

Overall renewal rate in 2006 was 57%, as you can see it's dragged down considerably by the first year drop outs. Ongoing renewal rates for people who renew at least twice reportedly approaches 100%.

And of those that leave, why do they leave?

I know Amway does exit surveys, unfortunately I've not been able to obtain data on them. We do know from a 2007 court case that approximately 50% of new IBOs join and then never even place an order, and income statistics indicate 54% never attend any IBO meetings, attempt to sell products etc.

This data indicates, and my own personal experience supports this, that at least half of the people who register don't do anything at all. You mentioned low barriers to entry, and this is I think a symptom of that. People get shown the concept go "oh yeah, I'll register and give it a look" and then for whatever reason just never get around to doing anything. In my experience that's sometimes because of poor follow-up by the sponsor, sometimes it's just a matter of priorities not working out, other times its a result of negative feedback they receive, either from talking to others or googling.

Assuming that virtually all of those who renew come out of the pool of new applicants who actually order products at least once in the first year, then nearly 2 out of 3 renew

Alternatively, of those who see "the plan," how many join?

A great deal of variation, but rule of thumb is 1:5

The people we should ask are the ones that have become allergic to Amway. Anyone in Amway has a vested interest.

The UoW study was a public survey. The US class action included all former IBOs. The Canadian class action was advertised nationally. The NSW government and BBB reports are of public complaints.

Also, the question isn't whether Amway and MLM's can't be ethical. It isn't whether it is possible. The question is what actually happens.

According the class action administrators report, in the period from January 1, 2003 until February 21, 2012 in the US alone there were 2,996,557 IBOs - 2,125,071 of whom were former IBOs.

There are insignificant numbers of complaints registered either with Amway or official bodies. Even an internet search will find very few first hand complaints, especially in recent years.

In 2009/2010 the FTC proposed new rules covering business opportunities. The rules initially would have covered MLMs. After industry input and staff research, MLMs were excluded. One of the reasons given was that they found there were very few complaints against legitimate MLM companies like Amway.

So, yes. Read the posts that come up in Google under "Amway is a scam" and evaluate what those people have to say. Ask what their motivation to say it might be. I propose they have no reason to lie.

On my search -

1. Wikipedia
2. amwayscam.org - says it's not a scam, looks likely to be a lead generation site for some (non-Amway) mlmer
3. Yahoo answers. Does indeed have some outright lies, like claiming Amway was forced to move their headquarters out of the US
4. A guy gets approached, researches on the internet, and promptly regurgitates standard anti-Amway myths. Not a complaint.
5. and 6. MLMer using youtube to recruit with Amway scam keywords. Says not a scam, not complaints.
7. Married to an Ambot. Author was involved in the Canadian class action and dropped out. Yes, she's a liar. PM me if you want details.
8. Ripoffreport. Combination of complaints and rebuttals, mostly old and the vast majority mostly second and third hand hearsay comments.
9. A site I maintain, not a scam
10. Saw presentation, googles, regurgitates standard myths.

So out of the first 10 results, we have 4 that say it's not a scam. Three that have people researching it and then regurgitating myths, not actually having any personal complaints, wikipedia, a known liar with an axe to grind, and a mix of old stuff on ripoffreport.

So not a single actual first hand complaint about Amway on page one, apart perhaps in the collection in ripoffreport.

 

[MinnesotaBrant]

I have met people living comfortably off of Amway but I worked in market research for years so had access to private financial data from 1000's of people. In that time I met one person off the street that made it big in Amway. I generally equate working for Amway with either being on disability or being secretly unemployed. There are tons of unemployed people who say they are working in these multilevel companies. It can be a good cover for them I guess if someone doesn't know I guess

 

[icerat]

I have met people living comfortably off of Amway but I worked in market research for years so had access to private financial data from 1000's of people. In that time I met one person off the street that made it big in Amway. I generally equate working for Amway with either being on disability or being secretly unemployed. There are tons of unemployed people who say they are working in these multilevel companies. It can be a good cover for them I guess if someone doesn't know I guess

As a general rule of thumb unemployed people are lousy business prospects. There's usually a good reason they're unemployed. There are exceptions of course.

A few months ago a friend of mine recently sponsored about 30 people, most of whom were unemployed guys in their 20s. All expressed keen interest in building a business and making some money. They all "need" it. Here you can register for free and you have a month to purchase a starter kit and pay for membership (both of which can be returned for full refunds). Of the 30, only 3 ever came to any training meetings (including numerous free ones and online ones), and only 1 has ordered their start kit, then done nothing. They're all too busy playing world of warcraft.

All in all a (predictable) waste of everyone's time. "Critics" will claim them as evidence the business doesn't work.

 

[Kopji]

9. A site I maintain, not a scam

On the Google comment. There's actually a fallacy named after it. A search on "mlm model obsolete" yields more challenging results though.

http://www.vandruff.com/mlm.html

So, upfront. I'm not a fan of mlm's, but scam is an emotionally charged word like cult.

I'm curious though, where in a world of direct Internet sales, an mlm has a reason for being. It would seem like a tough go of it if I were trying to sell Amway products from my house, if I was competing with someone who was using a website. Even if it was not a click to order site, it would be directing sales in a way that would seem to steal sales from 'brick and mortar' outlets - in this case my garage.

I'm not saying that is unfair, just that it would seem to undermine the model. It undermines the model because the mlm model is obsolete in an age where we can order from our computers.

 

[MinnesotaBrant]

As a general rule of thumb unemployed people are lousy business prospects. There's usually a good reason they're unemployed. There are exceptions of course.

A few months ago a friend of mine recently sponsored about 30 people, most of whom were unemployed guys in their 20s. All expressed keen interest in building a business and making some money. They all "need" it. Here you can register for free and you have a month to purchase a starter kit and pay for membership (both of which can be returned for full refunds). Of the 30, only 3 ever came to any training meetings (including numerous free ones and online ones), and only 1 has ordered their start kit, then done nothing. They're all too busy playing world of warcraft.

All in all a (predictable) waste of everyone's time. "Critics" will claim them as evidence the business doesn't work.

I don't think its a waste of time. These people can say they work for Amway and a couple other MLM's rather than say that they are unemployed or disabled. It gives them a feeling of self worth. I am not saying that most everyone is like that. I will say that finding people who were making really good money from these MLMs by interviewing people is really rare. I would say that I met less than 10 in 4 years on the job. Actually I think I have met 2-3 people who are doing well by business standards in my life possibly while doing marketing research. The general Amway distributor is probably very church oriented and the tapes seem to be closely related to inspirational bible tapes.

 

[AdMan]

A few months ago a friend of mine recently sponsored about 30 people, most of whom were unemployed guys in their 20s. All expressed keen interest in building a business and making some money. They all "need" it. Here you can register for free and you have a month to purchase a starter kit and pay for membership (both of which can be returned for full refunds). Of the 30, only 3 ever came to any training meetings (including numerous free ones and online ones), and only 1 has ordered their start kit, then done nothing. They're all too busy playing world of warcraft.

They probably realized that it's a scam.

 

[marplots]

(much snipped)

So not a single actual first hand complaint about Amway on page one, apart perhaps in the collection in ripoffreport.

Interesting no?
1) ripoffreport is one link from google, but contains dozens of first hand reports:
http://www.ripoffreport.com/r/AMWAY/nationwide/AMWAY-OR-SCAMWAY-3443
(look on the left side for additional links)

2) Just as telling is all the fake "scam" complaints that turn out to be pro-Amway or another MLM as a bait-and-switch link. This is exactly what you'd expect with a scam-based organization.

3) And we are using old terminology right? Isn't it Quixar or something else now? Is it even Amway any longer? "Carl is a cheat." "Well, no worries then, my name isn't Carl anymore."

Here's an NBC report from 2004 on Quixtar. http://www.nbcnews.com/id/4375477#.UiVF4X-1FR1
Sounds scammy to me.

 

[ChrisBFRPKY]

The only folks making money in Amway are the owners and those at the "Diamond" level or whatever it's referred to in modern times.

I made money from Amway when I built an Amway business. Still get paid from it for that matter, more than a decade later. I was nowhere near "Diamond".

Hmmm ... should I believe you or the cash in my account? Tough choice ...



The type of conventions you talk about are typically run by third party companies, all of which have different cultures. Fortunately I never encountered this kind of over the top hype.

How many different types of Amway-related conventions have you been to, Chris?



Most businesses take some money to get up and running. If you haven't got any, or aren't willing to spend any, then perhaps you shouldn't be starting a business?



I find the products competitively priced, that's why I continued to buy them even after I moved countries.

Chris, how many Amway products have you tried?



You have been misinformed. There is no points "quota".



Sounds like you're talking about someone just buying for themselves, and not building a business. You won't earn anything doing that, though you might get a few bucks back in volume rebate, yes.



It uses multilevel marketing, but it's not a scam - though of course, like any business, scammers can use it that way if they so choose.

So, you can you profit without recruiting new members? I don't think so.

Are Amway conventions over the top? You bet, it's a fact. Amway has to push the "belief" that their newest members can become rich to keep the newbies coming. "Read 'How to Win Friends and Influence People"! "Get out there and draw those circles!" If you've never heard any of those comments pushed, you've never been to a convention.

You make money from Amway a decade later and you're not not building the business? No product sales? That's wonderful, you reached the top level by which your profit comes from all the newbies signing up and building your downline.

As far as how many conventions I have attended, enough to know a scam when I see one. Without driving the new members to push, sell, buy and "draw those circles" the upper level fails. If you deny what I have said is true about the conventions, you must not have attended any or you're still pushing for new recruits.

Your statement about your bank account is typical for Amway upper levels. It's their job to stay on vacation and brag about what they paid for with cash. It seems bankruptcy court records tell a more honest, revealing tale about one's real worth. In the end their success based on the shoulders of the downline is probably a bit over 100K per year and the stories of paying cash for a new home are just that, stories.

The top level seek professionals. They use "status" to try and obtain Doctors, Lawyers and others who will be looked upon as someone to believe by the new recruits. The more "status" the larger the downline.

You think Amway products are competitively priced? 20 years ago a box of off brand generic cereal was $5 from Amway. The same cereal cost $1.29 at the local market. How much is Amway toothpaste now? Is it competitive with Walmarts $1 or $2 a tube? I bet it's about $5 or better. Correct me if I'm wrong.

No points quota, ok then maybe it's a minimum monthly sales number now before you get paid. But regardless you will not get paid until there is a set amount of product going thru you and your business. It's kinda odd how Amway pays you money but you have no product involvement? That's difficult to accept as truthful. Unless you have had an "Emerald" break off from your group under you. It's all part of the multilevel scam, pyramid , etc.

Don't forget to try and take control of the conversation by asking more questions. I have a soapbox too when it comes to the Amway scam.

 

[icerat]

Interesting no?
1) ripoffreport is one link from google, but contains dozens of first hand reports:
http://www.ripoffreport.com/r/AMWAY/nationwide/AMWAY-OR-SCAMWAY-3443
(look on the left side for additional links)

dozens. Out of nearly 3 million IBOs in the past decade in the US alone.

Statistically I'd consider that as pretty clear evidence there isn't much of a problem.

2) Just as telling is all the fake "scam" complaints that turn out to be pro-Amway or another MLM as a bait-and-switch link. This is exactly what you'd expect with a scam-based organization.

Best I can tell, the "pro-Amway" comments are responses and rebuttals, not bait-and-switch.

Yes, I've noticed other supposed MLMs using that tactic though, most of which appear to be clear scams.

3) And we are using old terminology right? Isn't it Quixar or something else now? Is it even Amway any longer? "Carl is a cheat." "Well, no worries then, my name isn't Carl anymore."

Now you're just being juvenile- and showing your ignorance. Amway parent company Alticor setup a new online division called Quixtar in 1999. Amway and Quixtar both operated in North America until around 2003/2004 when Quixtar had attracted so many Amway distributors that they decided to merge the two companies. In 2007 following market research on the strength of the two different brands it was decided to return to the Amway name.

You really do just believe any old rubbish you find on the internet if it confirms your preexisting beliefs, don't you?

Here's an NBC report from 2004 on Quixtar. http://www.nbcnews.com/id/4375477#.UiVF4X-1FR1
Sounds scammy to me.

That would be from the guys that faked car explosions to attack GM? In any case it was an "expose" of one small group within Quixtar.

 

[icerat]

I don't think its a waste of time. These people can say they work for Amway and a couple other MLM's rather than say that they are unemployed or disabled. It gives them a feeling of self worth. I am not saying that most everyone is like that. I will say that finding people who were making really good money from these MLMs by interviewing people is really rare.

If I recall correctly around 1 in 20 people in the US are involved in direct selling and 1 in 10 work it seriously (and not all succeed of course)

So you would expect to need to talk to at least 200 people to find one.

I would say that I met less than 10 in 4 years on the job. Actually I think I have met 2-3 people who are doing well by business standards in my life possibly while doing marketing research. The general Amway distributor is probably very church oriented and the tapes seem to be closely related to inspirational bible tapes.

There are several large Amway organisations that were developed by quite religious people, including Amway's owners. The nature of networking of course means organisations will tend to reflect the leaders who build them. Some groups were well known for actively promoting their religious beliefs through their Amway businesses. Amway itself put it stricter rules controlling that about 6 or 7 years ago.