Is Amway A Scam?

[Wowbagger]

I don't think he's pointed out anything I haven't already pointed out.

Your problem is that you were trying to defend shady behavior and exploits, instead of focusing on how such behavior might have been dealt with, and reduced, in other countries, such as the UK or Sweden. And, how they could be reduced in the US.

For example, when I said this:

Amway preys on the Planning Fallacy.

You replied:

It seems to me like an argument for Amway's business model

A BETTER response would have been something like:

"Yeah, I understand how people can be bad at planning. Here are some of the ways Amway communicates the real effort one must put into the program, to be successful... And here are some of the ways this is being enforced in a bunch of countries..."

Instead, you took the route of trying to defend the exploitation of innate biases in the human mind, as merit of the company!

I hope you understand the difference, now.

 

[marplots]

Just to update, C1REX, are you already a customer then? (I think you said you take Double X?)

What's your personal monthly vig going in? I ask because I'm interested in your value to your upline at this initial point.

 

[icerat]

Your problem is that you were trying to defend shady behavior and exploits

I'm trying hard to assume you just didn't understand my point, rather than that you're actively being dishonest. I absolutely do not "defend shady behaviour and exploits"

instead of focusing on how such behavior might have been dealt with, and reduced, in other countries, such as the UK or Sweden. And, how they could be reduced in the US.

For example, when I said this:

You replied:

If anyone actually bothers to click through the links they'll see the truth of the conversation. I did not at all say that "Amway preys on the planning fallacy" is somehow a good thing.

In reality of course, the planning fallacy costs both Amway and successful distributors time and money (as well of course as unsuccessful ones). The idea of "preying" on it is prima facie absurd.

My point was that - unlike most other business opportunities - Amway goes out of it's way to limit the risk of testing the opportunity for fit. You can try it out before deciding if it's something you want to do.

This is the key factor you and some others on this board seem to have an issue with - you don't seem to value the ability to actually try something out before deciding whether it's something you want to commit to. To take an analogy, you seem to think people should decide whether to buy a car or not without actually driving the car.

Seriously, I recommend a test drive first.

I hope you understand the difference, now.

I hope (in vain, undoubtedly) that you do now.

 

[marplots]

My point was that - unlike most other business opportunities - Amway goes out of it's way to limit the risk of testing the opportunity for fit. You can try it out before deciding if it's something you want to do.

This is the key factor you and some others on this board seem to have an issue with - you don't seem to value the ability to actually try something out before deciding whether it's something you want to commit to. To take an analogy, you seem to think people should decide whether to buy a car or not without actually driving the car.

Seriously, I recommend a test drive first.

And why shouldn't they? Amway makes money when people "try it out."

It reminds me of a marketing ploy that is becoming more common. We send you a bottle of our product, and if you don't like it, you don't have to pay for it. 100% guaranteed. All you pay is shipping and handling.

Trying it out means selling Amway products.

You can tell the real value of an "Amway business opportunity" by how much it costs. If it were an actual opportunity, it would cost much, much more. They give franchises away like Gideon bibles, in the hopes that among the thousands who take the "offer," a few won't realize what a toxic mess it is and will help transmit the virus to others.

 

[icerat]

And why shouldn't they? Amway makes money when people "try it out."

How?

It reminds me of a marketing ploy that is becoming more common. We send you a bottle of our product, and if you don't like it, you don't have to pay for it. 100% guaranteed. All you pay is shipping and handling.

Amway pays everything back, including shipping and handling, and pays for the product to be picked up, though they often say just to keep it.

You can tell the real value of an "Amway business opportunity" by how much it costs. If it were an actual opportunity, it would cost much, much more.

So I guess you're not an adherent of "the best things in life are free"?

 

[marplots]

And why shouldn't they? Amway makes money when people "try it out."

How?

Because trying it out means trying to sell Amway products. It's genius really. Even if someone only sells a few items and quits, Amway doesn't get blamed for the failure (the person didn't work enough) but still gets the money from anything sold.

We have a person in this thread who is paying money for brochures.

 

[icerat]

Because trying it out means trying to sell Amway products. It's genius really. Even if someone only sells a few items and quits, Amway doesn't get blamed for the failure (the person didn't work enough) but still gets the money from anything sold.

If someones sells a few items and then decides it's not for them and quits, they're not a failure, they just decided it wasn't for them. Heck, in your scenario they even made some money.

That aside, doing retail customer sales is only one part of building consumer networks and not usually the reason why people do or do not pursue network marketing.

 

[C1REX]

I invited some of my friends to a presentation made by an emerald in my upline.
I've learnt a lot and I'm ready to make a move.

My plan is to make it as ethically and professionally as possible.
First, I want to help people to save money by using organic cleaners that are also good for them and the environment.

For those interested in making some extra money I will teach whatever I know.
I will do some webinars when my group will get bigger.

 

[Joecool]

I invited some of my friends to a presentation made by an emerald in my upline.
I've learnt a lot and I'm ready to make a move.

My plan is to make it as ethically and professionally as possible.
First, I want to help people to save money by using organic cleaners that are also good for them and the environment.

For those interested in making some extra money I will teach whatever I know.
I will do some webinars when my group will get bigger.

Just curious, have you done a business plan with projections on how many people you'll need to sponsor. how much volume you hope to move and projected bonuses based on that volume, plus expected expenses associated with building a business of that size?

 

[marplots]

I invited some of my friends to a presentation made by an emerald in my upline.
I've learnt a lot and I'm ready to make a move.

My plan is to make it as ethically and professionally as possible.
First, I want to help people to save money by using organic cleaners that are also good for them and the environment.

For those interested in making some extra money I will teach whatever I know.
I will do some webinars when my group will get bigger.

Can you share what your current monthly spend is for personal use?

 

[marplots]

That aside, doing retail customer sales is only one part of building consumer networks and not usually the reason why people do or do not pursue network marketing.

If tools are ruled out, retail sales are the only place left to generate income. Someone has to sell this stuff, at some level. Everyone in the biz can't be relying on their downline. The downline has to have a bottom somewhere, some person who's either selling this stuff or buying it for their own use.

I'd argue that counting personal purchases as "wholesale" is misleading. They are more properly discounted retail sales, since they are consumed by the purchaser. In any case, someone, somewhere, has to pony up the dough - otherwise, there's no pie to split between the upline and Amway.

 

[C1REX]

Me and my GF spend about 150GBP mostly on stuff I had to buy anyway (shampoo, soap etc.). I will also keep buying Double X as it make me feel good.


I wouldn't do it if I wouldn't like the products.
Nobody lose here. You start from saving and any extra money is a bonus.
I don't need to buy any products but I want to.

 

[icerat]

If tools are ruled out, retail sales are the only place left to generate income. Someone has to sell this stuff, at some level. Everyone in the biz can't be relying on their downline. The downline has to have a bottom somewhere, some person who's either selling this stuff or buying it for their own use.

Yup, but you can make money as a wholesaler, selling to retailers and other wholesalers. A network is built of a bunch of people buying for themselves, a few people primarily retailing to customers, and a small number of people doing both of the above and building a network. Typically the latter group will only be about 10% of registered distributors, and even then it's a moving target - people move in and out of that group. It's the 1% who actually stay in that group for a significant amount of time that make full time equivalent incomes and better.

I'd argue that counting personal purchases as "wholesale" is misleading. They are more properly discounted retail sales, since they are consumed by the purchaser. In any case, someone, somewhere, has to pony up the dough - otherwise, there's no pie to split between the upline and Amway.

A wholesale sale is a sale for the purpose of resale. If I sponsor someone, and then they buy products to resell (either to a customer, someone they sponsor, or (arguably) to themselves) then I've made a wholesale sale and, if I have a margin, profited from a wholesale sale.

It's a little less obvious in the modern world of direct fulfillment and drop shipping, but this is how it works.

 

[Joecool]

Yup, but you can make money as a wholesaler, selling to retailers and other wholesalers. A network is built of a bunch of people buying for themselves, a few people primarily retailing to customers, and a small number of people doing both of the above and building a network. Typically the latter group will only be about 10% of registered distributors, and even then it's a moving target - people move in and out of that group. It's the 1% who actually stay in that group for a significant amount of time that make full time equivalent incomes and better.



A wholesale sale is a sale for the purpose of resale. If I sponsor someone, and then they buy products to resell (either to a customer, someone they sponsor, or (arguably) to themselves) then I've made a wholesale sale and, if I have a margin, profited from a wholesale sale.

It's a little less obvious in the modern world of direct fulfillment and drop shipping, but this is how it works.

With little to no sales to actual customers, or people outside the organization, it might very well be a pyramid as the money will flow from bottom to top.

 

[C1REX]

With little to no sales to actual customers, or people outside the organization, it might very well be a pyramid as the money will flow from bottom to top.

I see the point.

I believe that almost every business and non-business organisation has a pyramid structure with the richest and most powerful on the top.
If the company sell a product then the money flow from the bottom to the top. That's how business work.

 

[Joecool]

I see the point.

I believe that almost every business and non-business organisation has a pyramid structure with the richest and most powerful on the top.
If the company sell a product then the money flow from the bottom to the top. That's how business work.

I think you may have missed the point. In a company, if a product is sold, the money may flow from the bottom to the top. But the difference is that the money comes from a customer and the guys at the bottom still get paid a wage or salary. With those wages or salaries, these guys at the bottom can pay their bills, eat out, etc.

In Amway, if IBO's are not selling to customers, then the money flowing up the chain is coming directly out of the downline's pockets. Thus the downline is taking away money that could have paid their bills or fed their family.

And that's part of why the scam label applies to Amway.

 

[icerat]

I see the point.

I believe that almost every business and non-business organisation has a pyramid structure with the richest and most powerful on the top.
If the company sell a product then the money flow from the bottom to the top. That's how business work.

The money in all businesses flows from the bottom (consumer) to the top (manufacturer and suppliers) while passing (and shared) through various other hands (distribution/marketing/etc). The person or organisation at the "top" may or may not be the richest and most successful of them.

I'm always astounded that when people have it explained to them in the context of an MLM, they suddenly think it's a pyramid? A pyramid is when you get paid to recruit people, unrelated to product flow. In my opinion the spreading of misinformation by the anti-mlm cabal is causing enormous damage, making it extremely difficult for the average consumer to actually tell what a pyramid scam is. Actual scammers can then take advantage of their confusion.

Not to mention the likes of Ackman, who is now racking up losses approaching a billion dollars because one of his researchers fell for the FitzTaylor BS.

 

[C1REX]

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.



I'm also surprised how people complicate the MLM idea.
In most cases it's an online shop.
The difference is you can register to have a chance to recommend the shop to others and get rewarded. That's it.

If you don't want the right to recommend, then be a customer only. Simple.

 

[Pup]

I'm also surprised how people complicate the MLM idea.
In most cases it's an online shop.
The difference is you can register to have a chance to recommend the shop to others and get rewarded. That's it.

If you don't want the right to recommend, then be a customer only. Simple.

That sounds like affiliate marketing, if the person is only rewarded when their recommendation results in a sale. Otherwise, it sounds like just plain advertising, if the person is rewarded simply for posting a link on their blog for example, even if no one buys through the link.

Some affiliates are given a commission if they buy products themselves, but others, like Amazon affiliates, are not given a commission for purchases by themselves or friends and family, because the business's goal is to get new customers, and not to have affiliates use their affiliation as a discount program because they were already going to purchase anyway.

Is there any MLM that uses Amazon's rules, where purchases by marketers themselves are not given commissions or counted toward sales quotas, and only sales to outside customers are recognized?

 

[C1REX]

Is there any MLM that uses Amazon's rules, where purchases by marketers themselves are not given commissions or counted toward sales quotas, and only sales to outside customers are recognized?

I think this can be a difference between MLM and classic business.

You get paid if your advertising works. And it works every time somebody is shopping. If you got a regular customer then the company rewards for that.
You get paid according to results and not for signing people up.
Every customer can register to do the same. Everybody in MLM is a customer and some has a right to promote.

Because the company pays only when the advertising works it can help to save tons of money.
There are no super expensive TV commercials when a company spends millions with a hope it's worth it.