Is Amway A Scam?

[icerat]

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

You think wrong. First time I joined Amway I was 20, I did nothing but sell the products. Didn't recruit anyone, made a profit.

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.

Suggesting people read a classic book on people skills is "over the top"?

I'd note that Amway runs very very few conventions, mostly for higher achievers. The type of conventions you are likely talking about are by a variety of third party companies, such as that highlighted by dateline above.

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.

Ummm, no. I'm nowhere near a "top" level and you don't make any money at all by signing up "newbies". Zero. Ziltch. As I pointed out, but you apparently ignored since it doesn't fit your world view, the network has had nobody new join it in over a decade. I make money because people are buying products I introduced them to.

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.

Who were the seminars operated by? Unless you were Platinum or higher (which you weren't) then it wasn't Amway. How many seminars have you been to operated by the Muller-Meerkatz WWD organization? Or eFinity? Or Network 21? These are all different, independent, third party companies that offer support services to Amway business owners.

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.

In 10 years of researching and writing about Amway, including attending many seminars with the largest Amway organization in the world, the only people I've ever heard talking about "paying cash for a new home" are rabid critics like yourself.

Never heard it.

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.

Tell me, Chris. What percentage of Amway's revenue comes from new recruits? You clearly think it is the primary revenue driver. Could you give some details?

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.

Amway doesn't make cereal. In some markets they offer products from other companies. Some

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.

Are you aware there's more than one type of toothpaste? Even at Walmart!

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.

Yes, it's based on volume discounting, paid as rebates, you don't get a discount unless you reach certain volume levels. Pretty normal 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.

So somebody goes to my personal Amway website and buys a product, and gets it shipped to their home, and that's "difficult to accept"?

Or someone I introduced to Amway products goes to their Amway website and buys stuff, and gets it shipped to their home, and because I have enough people doing this that I qualify for volume rebates on these sales, that's "difficult to accept"?

Apparently you've missed this thing called "the internet".

 

[marplots]

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

Isn't that the psychology scams rely on? If I've been fooled, I'm less likely to talk about it - it makes me look stupid.

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

"Isn't much" - good way of putting it.
Would you at least admit that Amway has the reputation of being scammy, even if you don't think it deserves it?

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

There isn't going to be a switch if I'm supporting the business I'm involved in.

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

This is starting to sound like one of those conversations where someone claims other religions are bogus but their religion is fine. I'll take the position that yes, we agree - except I believe in one less MLM than you do.

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.

So I should combine complaints under whichever name comes up. Good to know.

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

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

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.

And you disbelieve NBC because doing so confirms your preexisting beliefs? Or, am I to take it that you agree, at least "one small group" within Quixtar was indeed scammy, as recently as 2004?

How would you propose to police the vast organization, composed of independent businesses to make sure that none are drifting back into that huge money-making sideline of selling other sales materials, or drifting into practices that other MLM's use - the ones you agree are tainted?

How tempting it must be to inflate the promises, just a wee bit, when an amateur presents "the plan."

For example, here is a pro-Amway youtube video:


It has been up a year. The gentleman isn't selling Amway directly, as far as I can tell, he's selling tools to network marketers. In other words, he's doing exactly what gave Amway the stink it got from selling "tools."

And here is the website it leads to: http://methos04.magneticsponsoringonline.com/

Among the claims -

Free videos show you how you can literally have an endless new stream of distributors knocking down your door, credit card in hand, ready to join... Absolutely free.

Is that an inflated claim or not?

And the question is then - how do you even know that such a person and business model isn't involved in Amway when independent business are, well, independent? There is some reason these folks love MLM - it seems to attract them like hyenas to week-old carcasses.

 

[icerat]

Isn't that the psychology scams rely on? If I've been fooled, I'm less likely to talk about it - it makes me look stupid.

Really? That's what your opinion rests on? That even if people are contacted confidentially by an independent 3rd party and offered compensation they would't take it? Because they feel they got fooled?

Do you have any idea how silly this thesis is?

It's also ridiculously common amongst the anti-MLM crowd - "well of course there's no complaints! People are too embarrassed to talk about it!"

Good grief.

Would you at least admit that Amway has the reputation of being scammy, even if you don't think it deserves it?

As per the University of Westminster study, the industry has a poor reputation amongst those who base their opinions primarily on hearsay.

This is starting to sound like one of those conversations where someone claims other religions are bogus but their religion is fine. I'll take the position that yes, we agree - except I believe in one less MLM than you do.

I think we both agree illegal pyramid schemes and ponzi schemes are scams? They are (arguably) a subset of MLM. Your argument is starting to sound like "Al qaeda are terrorists therefore all Muslims are terrorists"

And you disbelieve NBC because it confirms your preexisting beliefs?

I don't believe or disbelieve it. I've no idea how that particularly group operated. It's hard to tell whether that group is "scammy" or not from that show. I do know that it doesn't remotely reflect my experience with the largest Amway organisation in the world.

Or, am I to take it that you agree, at least "one small group" within Quixtar was indeed scammy, as recently as 2004?

I already pointed out Amway lost nearly a third of their IBOs in 2007 when they kicked out a large number of leaders for what they (and I for that matter) believed to be unethical practices.

How would you propose to police the vast organization, composed of independent businesses to make sure that none are drifting back into that huge money-making sideline of selling other sales materials, or drifting into practices that other MLM's use - the ones you agree are tainted?

Amway implentented an accreditation system back about 6 years ago . If you wish to use these 3rd party companies, and promote them to others, then they need to go through an accreditation process where all material is checked, Amway representatives are invited to all major functions, any "tool" compensation is subjected to independent audit, no promoting politics and religion, and more.

If a company fails to be accredited and maintain accreditation, those who use it are ineligible for a wide range of discretionary awards and bonuses.

For example, here is a pro-Amway youtube video:
It has been up a year.

And here is the website it leads to: http://methos04.magneticsponsoringonline.com/

Among the claims -

Is that an inflated claim or not?

Sure, but I'm not sure what your point is? This isn't an Amway rep, it's someone trying to sell something to Amway reps.

(and lead gens are a scam if you ask me)

 

[marplots]

(much snipped)

I already pointed out Amway lost nearly a third of their IBOs in 2007 when they kicked out a large number of leaders for what they (and I for that matter) believed to be unethical practices.

Finally, a benchmark. We can at least agree on this, I think:
Up until 2007, at least a third of Amway was a scam. Policies were instituted in 2007 to try to stop further scamming. (I took the liberty of using "scam" instead of "unethical.")

Think about that. A third.

When do you think the next purge will come?

Here is a closer, less hyperbolic analogy. I think chiropractic is a scam. Not all chiropractors make excessive claims. Not all operate unethically. But the industry, by it's nature, tends toward unethical behaviors. It doesn't have to, but in my opinion, that's how it is.

MLM's, by your estimate, also tend toward the scam side of the ledger. Even if Amway, as a corporation, is trying their hardest to keep things above board, I do not think they have the level of control necessary to prevent what is so prevalent elsewhere.

Here's a good blog about the "cult" side - that's what turned me off when I was exposed. http://marriedtoanambot.blogspot.com/2013/08/august-26-3-years-baby.html#comment-form

 

[catsmate]

I wouldn't trust an article. I had changed thinks there's an "English Government" quite so often in one piece. Do we have anything a little more compelling?

The BERR case against Amway UK was eventually dismissed, 14MAY2008, when Amway agreed to certain conditions, i.e.:

• to maintain the present prohibition on the production sale or promotion of BSM that is not authorised and distributed by Amway;

• not to introduce a registration fee or a renewal fee;
• not to recruit new ABOs until it has published earnings data in accordance with a stated income disclosure policy (which requires annual disclosure for 12 month periods of the average earnings and the highest and lowest earnings of each category of ABO together with the minimum income levels for qualification for higher rewards and the number of persons qualified at each level ).

Of course none of this effects the facts that Amway is a scam, just that it is a legal scam.

 

[gnome]

What turned me away firmly was the family member trying to recruit me doing his best to convince me that I didn't have to make any actual sales to non-members--just buy from myself and recruit others to buy from themselves. I recognized that part as the behavior that they had to make rules against to keep Amway from being legally considered a Ponzi scheme. But apparently the rules weren't enough to stop it from happening.

But that was his response when I said I didn't want to be a salesman, so it's not like I would have taken it up had he explained a need to sell to non-members.

 

[icerat]

Finally, a benchmark. We can at least agree on this, I think:
Up until 2007, at least a third of Amway was a scam.

Nope, doesn't say that at all. The vast majority of distributors are not actively building businesses, but still have loyalty to their upline (being or having developed friendships)

When do you think the next purge will come?

Go see how many first hand complaints you can discover from the past 3 years.

Here is a closer, less hyperbolic analogy. I think chiropractic is a scam. Not all chiropractors make excessive claims. Not all operate unethically. But the industry, by it's nature, tends toward unethical behaviors. It doesn't have to, but in my opinion, that's how it is.

If you're going to make that equation, then your taking on the entire retail industry. MLM is just a marketing strategy. While it's often discussed as such, it's not an industry

MLM's, by your estimate, also tend toward the scam side of the ledger.

Nope, never said that. I haven't checked them all but I think most DSA members are authentic.

Even if Amway, as a corporation, is trying their hardest to keep things above board, I do not think they have the level of control necessary to prevent what is so prevalent elsewhere.

As we've already established, problems are, relatively speaking, rare not common. I believe they're even rarer today than in the past, and the industry is become more and more professional. Check out the top 100 direct selling companies (nearly all use MLM) and analyse them for complaints/issues.

Here's a good blog about the "cult" side - that's what turned me off when I was exposed. http://marriedtoanambot.blogspot.com/2013/08/august-26-3-years-baby.html#comment-form

As I pointed out, that's a fake blog. Most of the experiences she claims are faked, most of the comments are faked. And you consider it "good"?

You argument seems to be "MLM makes it easy for anyone to start a business, this is a bad thing"

 

[icerat]

The BERR case against Amway UK was eventually dismissed, 14MAY2008, when Amway agreed to certain conditions, i.e.:

Catsmate, this is incorrect and another lie regularly promoted by anti-Amway critics. As pointed out in the judgement, BERR had failed to actually tell Amway what their concerns were. Amway went out of the way trying to work it out and made several changes.

The judge stated that he would have dismissed the case even if the changes hadn't been put in place, but he decided to accept them anyway. BERR's entire appeal was based on the view that the judge had based the dismissal on the changes, and that this was incorrect - they should be punished for the bad behaviour. The appeal court judges confirmed that the case would have been dismissed without the "condiitions".

So you're claim is false. I'll assume you've been misled, rather than being dishonest, but to be frank I get sick of having to deal with the same old discredited BS over and over again.

 

[icerat]

What turned me away firmly was the family member trying to recruit me doing his best to convince me that I didn't have to make any actual sales to non-members--just buy from myself and recruit others to buy from themselves. I recognized that part as the behavior that they had to make rules against to keep Amway from being legally considered a Ponzi scheme.

Well you recognized incorrectly. While what your family member said was in violation of Amway's rules, it was not something required to make them not a Ponzi scheme.

What you're probably referring to is allegations of being a pyramid scheme, which is different to a ponzi scheme. What's necessary not to be a "product based pyramid scheme" is legitimate products. Retail customer sales are not required to have a legitimate market for legitimate products, but a significant amount of it provides strong evidence you have legitimate product and market.

But apparently the rules weren't enough to stop it from happening.

Amway North America has implemented much stronger tracking of retail customer sales

But that was his response when I said I didn't want to be a salesman, so it's not like I would have taken it up had he explained a need to sell to non-members.

Not to mention signing up others members is selling!

 

[marplots]

I just don't understand why there are so many Amway critics. Wherever do they come from?

I am an Amway critic.

We have heard from several JREFians who are also critical of Amway. We should hear from more than one who supports it. But maybe being a skeptic skews opinions here. Don't know.

And what's with the fake blogs and fake network news reporting?

It's all very puzzling.

 

[icerat]

I just don't understand why there are so many Amway critics. Wherever do they come from?

I am an Amway critic.

We have heard from several JREFians who are also critical of Amway. We should hear from more than one who supports it. But maybe being a skeptic skews opinions here. Don't know.

And what's with the fake blogs and fake network news reporting?

It's all very puzzling.

There's a few factors going on I think, both historically and more recently.

(1) the Amway model has been successful at introducing new products in to established markets, so you have big player competitors actively trying to discredit the company. This was discussed in FTC vs Amway and also highlighted with Amway's initial struggles in South Korea, where competitors were caught spreading rumours about Amway products. Similarly, in the US, Proctor & Gamble was found to be feeding information to one of the early prominent anti-Amway bloggers.

(2) by it's open nature, virtually by definition most people's experience with an MLMer is with a new inexperienced person, so they'll often get hype or approaches like the "no selling!" one pointed out above

(3) I don't know with it's just historical accident or some other reason, but two of the initially most successful at networking, Dexter Yager and Bill Britt, were very "in your face" with a "take no prisoners" type of approach, mixed it with lots of religious and political evangelism. The approach is very successful for those it appeals to, but alienating for those it doesn't. If my first experience with Amway had been an old-style Britt/Yager seminar then I'd probably be a critic too! As noted in the independently written book "Amway Forever" published a couple of years ago, virtually all of the complaints you read on the internet originate with those two groups and their offshoots. (indeed Britt was an offshoot of Yager)

(4) Combine the above with the oft quoted marketing maxim that people promote bad experiences far more than positive ones, and you end up with people reporting their bad experiences but not neutral or negative ones

(5) Throw in the internet and it's amplified enormously

(6) People with the most positive experiences are those building their businesses successfully. The vast majority do so in the spare time, so they're not sitting around on the internet blogging about it!

(7) Then you have to realise Amway actively stops people promoting Amway on the internet. For most of the first decade of this century they even forced IBOs to remove websites that defended Amway against critics! They had various reasons for this, some even good, but overall it left the internet to critics. A huge mistake in my opinion.

End result is a hugely biased view of the company, especially if you restrict yourself to internet research. Bother reading some of the many third party published books on Amway and you get a wholly different perspective.

Not sure what you mean by the fake blogs and fake network news reporting?

 

[icerat]

Not sure what you mean by the fake blogs and fake network news reporting?

Ahh, I think I know what that might be. A group involved with Amway (not Amway) setup a whole heap of fake blogs trying to address criticisms. It was extremely poorly executed, and it also happened to have been led by the guys who soon after got kicked out.

The fake news broadcast I think refers to Quixtar's response to Dateline? Some consultant obviously told them that makes stuff more believable. I vaguely recall it was a fashionable PR approach at the time, not just with Quixtar.

This was many years ago. Just goes to show how the internet accumulates stuff.

 

[Joecool]

Finally, a benchmark. We can at least agree on this, I think:
Up until 2007, at least a third of Amway was a scam. Policies were instituted in 2007 to try to stop further scamming. (I took the liberty of using "scam" instead of "unethical.")

Think about that. A third.

When do you think the next purge will come?

The group that got booted out was called "TEAM". I believe they would not have gotten booted out had they not challenged Amway on some issues. Amway was perfectly happy to collect their earnings from this group who taught "buy from yourself and get others to do the same".

There are other groups out there who teach and operate in a similar manner but Amway turns the other way as along as these groups don't "rock the boat".

In 1983 in a speech called "Directly Speaking", the Amway owner acknowledged that the tool business is basically a scam/pyramid but ended up taking no action because Amway sales were threatened by such large groups of IBO's being persuaded to boycott by their leaders.

 

[Joecool]

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

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.

If you're going to imply that Dateline and NBC did some fakery on the Quixtar (Amway) expose, surely you have some evidence? Citing an unrelated event which sensationalized a car explosion has nothing to do with the expose on Quixtar.

Your defense in that manner is like defending Amway by saying my job is a pyramid.

 

[Almo]

That Married to an Ambot blog sounds like it's written by a man; something about the language doesn't sound like a woman to me.

 

[icerat]

That Married to an Ambot blog sounds like it's written by a man; something about the language doesn't sound like a woman to me.

I can confirm it's a woman. But ... yeah.

 

[Almo]

I can confirm it's a woman. But ... yeah.

Interesting to know.

 

[icerat]

Interesting to know.

It's one of the few true things on the blog! For a start, she's not married ....

 

[Joecool]

It may be no coincidence that Herbalife was founded in 1980. The FTC ruling gave the green light to everyone who wanted to start their own sophisticated pyramid scheme, so the founder of Herbalife seized the opportunity.

Many other MLMs have come and gone, but Herbalife, with its billions in revenues, is almost as successful as Amway. So in a way, Amway has helped some people, besides those at the top of the putrid Amway pyramid, become rich - clever enough scam-artists who start their own pyramid scheme and closely model it on Amway stand a good chance of making it big!

Right, the 1979 FTC ruling on Amway paved the road for other schemes to get started. While they might be legal by the letter of the law, they are in my opinion, operating on the fringes of legality that could be changed if the FTC would just clearly define some parameters.

The big one is their definition of end users. I take it to mean real customers who are not participating in the MLM. But apparently, the way the FTC defined the ruling, it allowed for interpretation that IBO's themselves are end users. It's redundant because without customers, your ability to profit depends on recruiting, which is then a factor in determining a pyramid scheme.

Icerat is good at attacking semantics and things but the bottom line is that Amway is a lousy business opportunity where nearly everyone makes nothing or loses money and their products are not competitive so it's easy to see why IBO's are the primary customers. Factor in Amway's in the toilet reputation (In the US) and you can see a recipe for failure.

 

[Darth Rotor]

Icerat, you're wasting your breath. No one buys that crap anymore.

I use their Laundry soap. I prefer it. Wife gets it from a gal she works with, who has had a modest distributorship for over a decade. We used their powdered dish washer soap on trial, and it's OK, but I am not sure it's any better than the other stuff I use.