My Honest Review of why I quit after a year – Amway pyramid scheme
Make sure you read to the end because I’ll be providing you some bonus information.
I’m going to try to make this short and sweet. I was a member of Amway for about a year. One thing I can tell you, is that it is not a scam BUT….what they do is brain wash you into thinking success is right around the corner. They get you by bringing you to meetings so you’re around like minded people. Then they tell you anyone (family or friends) that’s not on your side cut them off. Then they want you to be best friends with the people at the weekly meetings. If you see what’s happening here, they isolate you so if you do suck at recruiting people at least you’re still buying products monthly which makes your upline Commission. Now, the products aren’t anything new that people need, so during a recession no one is gonna buy your over priced popcorn or laundry detergent. Majority of the company’s product sales seem to be coming from people that are in the business.
See how much I made this week with myecon
If you are planning to join Amway, just consider a few factors. Can I actually sell these products to people. If their real value to the end user. Are these products an expense or investment for my customers.
Don’t waste time with the wrong MLM. Time is money. You may feel like if you join any mlm you may get scammed but Fear is temporary, regret is forever.
Below you will learn some shocking statistics about Amway like 99% of its distributors never make a profit.
Less than 41% of their distributors are actively attending meetings and working this business.
We interviewed 32 people in the business and they all conveyed the same message.
It’s products and opportunity is too hard to sell because it isn’t essential to society.
Anway began in 1959. They wanted to be seen as the global leader in the health and beauty industries.
Amway’s fundamentals established by its founders are freedom, family, hope, and reward.
The Michigan-based company believes its distributors will achieve happiness through earned success.
Its product line includes weight management shakes, eye and lip care, household cleaners, laundry detergent, and more.
Amway is a family owned company with a global management team that supports independent distributors.
Amway’s goal is to help people start their own business with the promise of access to exclusive products, a low startup cost, and a 100 percent satisfaction guarantee.
Pretty bold of them.
People interested in Amway’s health and beauty products can choose to become an Amway independent business owner or be an Amway customer.
- Additional Bonuses
- Money-Back Guarantee
- Endorsements and Sponsorships
Amway Compensation Plan
- 100-299: 3 Percent Bonus
- 300-599: 6 Percent Bonus
- 600-999: 9 Percent Bonus
- 1,000-1,499: 12 Percent Bonus
- 1,500-2,499: 15 Percent Bonus
- 2,500-3,999: 18 Percent Bonus
- 4,000-5,999: 21 Percent Bonus
- 6,000-7,499: 23 Percent Bonus
- 7,500+: 25 Percent Bonus
Amway calls its sales people business owners.
These independent business owners (IBOs) partner with Amway and the Independent Business Owners Association International (IBOAI) to establish communication and support through its international community of independent contractors.
As an Amway Independent Business Owner, you can earn money in all of three ways: selling products, recruiting IBOs, and earning bonuses.
Bonuses are earned through your overall sales volume and the size and success of the group you organize and recruit.
This is where a lot of people fail. They are only taught to recruit in person and majority of people aren’t built for that.
Simply put, the more you sell and the more you recruit (and the more your recruits sell/recruit), the more money you make.
Success is entirely dependent on personal success in quickly forming business relationships. If interested parties have a talent for forming quick, meaningful relationships, then this is a good compensation plan for them.
But again only a very small percentage of people make money in this business.
The amount of money a distributor, salesperson, or business owner makes is dependent upon the combination of what Amway calls “immediate income” and any additional income earned through performance bonuses.
An IBOs immediate income is the total amount you make from product sales minus the total amount it costs to purchase the inventory. If you buy $1,000 worth of inventory each month and sell $3,000 worth of product, then your immediate income for the month is $2,000.
One of the biggest complaints with Amways if you have to buy their products month. Most people lose money here because they aren’t good at sales.
In addition to the immediate income, IBOs can build a higher income by increasing their sales volume, which is determined by their Point Value (PV) and their Business Volume (BV). Each product, or set of products, has a PV assigned to it.
Business Volume (BV) is the dollar value of the products that IBOs, distributors, and salespeople sell. To make it simple, your total sales volume is the combination of PV and BV (most people just call it their PV/BV).
Amway states that IBOs who focus on registering new IBOs earn higher bonuses than those who focus on sales.
The total Point Value (PV), along with Business Volume (BV), help determine your monthly performance and which bonus bracket you will fall under for the month. Here is a list of performance bonuses and their corresponding Total Monthly PV:
Total Monthly PV: Performance Bonus (% of BV)
The company also offers an extensive list of additional bonuses with specific qualifications and awards for each bonus rank. Here’s a list of the different ranks and some of the associated awards and bonuses:
- 25% Sponsor — 25 percent performance bonus.
- Silver Producer — 25 percent performance bonus and a Silver Producer pin.
- Gold Producer — 25 percent performance bonus and a Gold Producer pin.
- Platinum — 25 percent performance bonus, a Platinum pin, invitation to the New Platinum Conference, and Growth Incentive Program participation.
- Founders Platinum — 25 percent performance bonus, a Founders Platinum pin, and Growth Incentive Program participation.
- Ruby — 25 percent performance bonus, a Ruby pin, the monthly Ruby Bonus, and Growth Incentive Program participation.
- Founders Ruby — 25 percent performance bonus, a Founders Rub pin, a monthly Ruby Bonus, and Growth Incentive Program participation.
- Sapphire — 25 percent performance bonus, a Sapphire pin, and Growth Incentive Program participation.
- Founders Sapphire — 25 percent performance bonus, a Founders Sapphire pin, and Growth Incentive Program participation.
- Emerald — 25 percent performance bonus, Emerald bonus, and a pin*.
- Founders Emerald — 25 percent performance bonus, Emerald bonus, and a pin*.
- Diamond — 25 percent performance bonus, Emerald and Diamond bonuses, and a pin*.
- Founders Diamond — 25 percent performance bonus, Emerald and Diamond bonuses, and a pin*.
- Executive Diamond — 25 percent performance bonus, Emerald, Diamond, and Diamond Plus bonus, and a pin*.
- Founders Executive Diamond — 25 percent performance bonus, Emerald bonus, and a pin*.
- Double Diamond — 25 percent performance bonus, a pin, and a $48,000 cash bonus*.
- Founders Double Diamond — 25 percent performance bonus, a pin, and a $64,000 cash bonus*.
- Triple Diamond — 25 percent performance bonus, a pin, and a $80,000 cash bonus*.
- Founders Triple Diamond — 25 percent performance bonus, a pin, and a $96,000 cash bonus*.
- Crown — 25 percent performance bonus, a Crown pin, and a one-time cash bonus of $128,000*.
- Founders Crown — 25 percent performance bonus, a Founders Crown pin, and a one-time cash bonus of $160,000*.
- Crown Ambassador — Receives a 25 percent performance bonus, a Crown Ambassador pin, and a one-time cash bonus of $192,000*.
- Founders Crown Ambassador — Receives a 25 percent performance bonus, a Founders Crown Ambassador pin, and a one-time cash bonus of $224,000*.
*All ranks above “Emerald” include a 25 percent performance bonus and participation in the Emerald Profit Sharing Bonus and the Growth Incentive Program. Additional bonuses may apply.
Amway offers a $62 registration kit and it includes items needed to get started.
This registration kit has a 100 percent money-back guarantee for the first 90 days. The kit comes with the following:
- Step-by-step guide to help distributors understand the business, products, training resources, and details on bonus programs
- Marketing support
- Direct sales tips
I believe they offer this 90 day money back guarantee to trick you into thinking the system works. It takes between 6 weeks to 12 weeks to change a habit.
They know if you just stay at least 90 days, they will have enough time manipulate you into thinking success is right around the corner.
People who choose to become Amway independent business owners will be part of a network of more than three million people who have chosen to do the same.
Positive Amway Reviews
Though the company does not have a huge quantity of customer and distributor reviews, I choose to reach out to 32 strangers on Facebook.
The aspects of the company that customers seem to like are the money-back guarantee, customer service, experience.
We didn’t hear a thing about compensation. Cause these people we spoke to aren’t making money but love going to the meetings.
Amway distributors and independent business owners will find selling and recruiting much easier because of the 100 percent money-back guarantee.
But they still seem to be struggling to make positive return on investment monthly.
One distributor claims the company has never missed a single bonus check.
One out of 32 seemed to have actually gotten a bonus check.
Endorsements and Sponsorships
For an MLM this is pretty cool and brings credibility to their name.
For people who value high-profile endorsements and sponsorships, the Amway Center Sports and Entertainment complex in Orlando, Florida is the home court to the Orlando Magic.
The multi-level marketing company not only hosts an NBA team at its flagship center, but it also hosts popular performers such as Ed Sheeran.
Amway also has a number of celebrity athlete ambassadors including:
- Kirk Cousin, professional football player
- Adreian Payne, professional basketball player
- Chris Harris Jr., professional football player
- Rich Gannon, retired professional football player and sports commentator
- Allie Lyn Dragoo, cyclist
- Trent Murphy, professional football player
- Canadian Men’s National Soccer Team
- Canadian Women’s National Soccer Team
Amway also has several notable partnerships with companies such as:
- Neiman Marcus
Amway Products that no one needs..
There is a lot of bad in the MLM industry. With Amway it seems like they struggle to teach you how to sell the products and business opportunity outside of your family and friends.
The 32 people that I interviewed mentioned burning a lot of bridges due to Amways teachings.
Here are a few other bads…
Amway’s time in business has not been without controversy. The multi-level company is not new to dealing with a class action lawsuit.
One class action lawsuit in the last ten years resulted in Amway paying $56 million to settle a case alleging it operates a pyramid scheme. Amway agreed to the deal to close a 2007 class-action suit.
Here are some of the accusations Amway has received form each lawsuit in its more than 50 years of business:
- Amway’s kingpin companies that sell “motivation and training” products to recruits are part of an illegal pyramid scheme.
- Amway criminally violates federal racketeering law
- Amway violates California’s “endless chain” law
- Amway deliberately deceives consumers to enroll in the pyramid scheme in which they inevitably suffer financial loss
- Amway commits wire fraud and mail fraud
Although Amway pitches that people can be financially free through its multi-level marketing model, the number of distributors who are able to generate a reliable income on a full-time basis may be lower than some expect. Here are the statistics:
- About 10 percent of all U.S. direct sellers work full time and are the highest earners
- About three percent of all American direct sellers earn more than $50,000 per year
- About six-tenths of one percent make more than $100,000 per year
Amway’s level of retention can also be discouraging since less than 41 percent of its distributors are active.
One source says that Amway’s payouts to distributors show that more than 99 percent of all who sign up never earn a profit.
The Bottom Line
If choosing a multi-level marketing business with a proven track record of sales is I’d stay clear of Amway.
Amway is forgiving to people who do not receive the experience they expected when signing up with the health and beauty company.
Distributors have a money-back guarantee which gives them time to decide if Amway fits their needs.
However, Amway is not foreign to lawsuits and questions of the integrity of its business practices.
What do we suggest? Compare Amway to other multi-level marketing companies and how they best meet your personal goals and values.
Also, consider whether or not you want to be associated with a company who has settled in court due to pyramid scheme accusations.
When it comes down to it, Amway has been in business for more than half a century, and they pay according to their compensation plan.
As such, despite their negative general reputation, they do not fit the traditional definition of a scam.
However, if you’re thinking about becoming an Amway Independent Business Owner, there are several things you should keep in mind.
First, as with most direct sales/MLM opportunities, your initial startup cost is typically just the beginning. You’ll also have a monthly sales quota to meet, on top of monthly meetings, regional meetings, as well as conferences that you’ll be required to attend. And unfortunately, nearly all of these costs will be your responsibility. On top of this, monst IBOs will use any Amway products they’re attempting to sell, which may further increase your startup costs. Between the travel, training, and product purchases, the reality is that only a select few will ultimately realize financial freedom by selling Amway products, which, by almost any measure, are fairly expensive.
Next, talking with other IBOs or Amway representatives may make it seem like a great opportunity to earn a lot of money, to make your own schedule, to build your own business, and more. However, the reality is that any type of direct sales opportunity takes a huge amount of time and money in order to become successful, not to mention a natural ability to sell. And frankly, MLM companies like Amway are often very misleading in how simple they make their business opportunities appear, because the reality is nothing could be further from the truth (see the following section for additional details). As a testament to this, be sure to watch Dateline NBC’s year-long undercover investigation of Amway right below.
Because of this, the vast majority of IBOs who join Amway end up making very little (if any) money. For example: Taking a look at page 11 of the company’s online brochure, they claim that only 46% of IBOs were active during 2010, and of those, the average monthly income was only $202. Furthermore, out of 300,000 active IBOs during the 2010 calendar year, only 0.25% achieved Platinum status, 0.08% achieved Founders Emerald, and 0.02% achieved Founders Diamond or higher.
According to this article, “The way that you’re actually going to make residual income is by sponsoring people into a downline. Yes, this means that you are going to need to get really good at recruiting your friends and family into the business to become an active distributor just like you.” This means that if you’re looking to make it to the top of the Amway hierarchy, you’re going to need to create a large network of IBOs underneath you, and earn a commission off of each sale they make. In other words, creating recurring monthly income occurs not necessarily by selling Amway products, but by recruiting others to sell them for you. And this simply can’t be avoided, because in order to begin selling Amway products, you’ll have to sign up under an existing IBO, who will make money off each of your sales.
If you think a lot of this smacks of a pyramid scheme, you’re not alone. In fact, the company was the subject of a 1979 Federal Trade Commission ruling that found Amway’s business practices to not be “inherently illegal,” though they were required to “cease price fixing and cease misrepresenting the apparent success achieved by the average distributor.”
6 Things to Remember When Attending an Amway “Opportunity Presentation”
If a friend or family member asks you to attend an Amway Opportunity Presentation, you may think to yourself, “Sure, I’d love to help out. After all, what’s the big deal?” The reality is that these presentations are carefully formulated to cause you to make an emotional decision, rather than an informed one.
As such, in order to insulate yourself from being sucked in by the hype, keep the following in mind: You’ll encounter numerous claims throughout the presentation, but few of them will be based on facts. Because of this, ask as many questions as you can.
- Ask how much money you’ll have to spend each month on products, training material, seminars, and conferences.
- Ask how much time is required to reach a significant income level.
- Ask for proof to back up their claims. After doing so, don’t allow them to change the topic. If they tell you how easy it is to make money and give you some figures, ask them to factor all of the costs into the equation.
- Ask how many people are making the really big bucks. If they give an honest answer, then ask them why most people don’t actually make money.
- Ask them what your specific chances are of making real money. Unfortunately, the simple truth is that 99% of IBOs will not succeed.
When it comes down to it, most of the time a presenter will never mention the total cost and time involved in producing income through Amway, or if they do, their answers will be very misleading. You’ll often hear statements like, “If you work hard, you will succeed,” or, “The people who don’t make money don’t work hard enough.” In reality, this is just shifting the blame, because the company’s statistics often tell a very different story. Caveat emptor.
Here is my last note on Amway. They don’t allow you to market online and if you do you can get your account banned. They haven’t figured out how to go from word of mouth to the internet. This is why 99% of people in amway are making less than $400 in their tenure in the company. 99% of people in MLM aren’t good at approaching family and friends to pitch them a business opportunity. Let alone products that are over priced and people don’t need.
This is why I left Amway after a year of losing more money than I made.