Is “Amway” a pyramid scam or an effective and prosperous way to build up a network marketing fortune? It's been around for a long time now, so it is worth joining or not? I decided to look deeper into this MLM and write a review on what I found.
So let's take a look at it and find out the truth…
Forget MLM as a way to make money. Click below to discover how I do it…
Company Name: Amway
Co-Founders: Richard DeVos and Jay Van Andel
Price To Join: $300/Month (Approximately)
My Rating: 1/10
~ The “Amway” Review ~
A Brief Amway History
Amway (short for American Way) was started in Michigan way back in 1959 by the 2 co-founders mentioned above. They conceived the idea for Amway after joining Nutrilife as distributors of food supplements. The early Amway product lines were predominately household cleaning agents.
Over the years a number of corporations were created, eventually merging into the Amway Corporation in 1964. In 1972 Amway bought controlling rights of Nutrilife and incorporated the Nutrilife product line into the Amway suite of products.
Part of the plan of the two founders was to set up a sales system similar to that of Nutrilife, creating an army of sellers and distributors to move the Amway products all across America and the rest of the world.
Although the parent company has always been Amway, other companies have been formed along the way in a bid to be able to entice new sellers into the program without having to mention the Amway name.
As Amway was becoming more and more saturated to the point where many had already tried it and most people had heard all about it before, Amway needed to keep reinventing itself in order to continue to move forward and expand.
Just a few names associated with Amway include:
- Network TwentyOne
- Quixar
- Alticor
- Amway Global
Over the years the Amway product range has grown and diversified, adding all sorts of things to their list other than just cleaners and supplements. These days leafing through an Amway catalogue is a bit like looking at Amazon’s product range.
My Experience With Amway
I can’t remember the very first time I ever heard of Amway, but I did get involved and give it a try way back in 1991. I don’t recall ever making any profit from it, as there is a minimum spend each distributor has to make each month, so I was mostly buying products for myself at a discount price.
Some of the cleaning products were really good – especially the car polish – but even at the discounted price everything was still 4 to 5 times more expensive than an equivalent product in the supermarket.
Amway have to charge exorbitant prices to cover the costs of all the commissions paid through the down lines.
I used to enjoy some of the Amway seminars, as they were always motivating, and it was from an Amway seminar that I first heard my favourite phrase that I still use today:
Freedom = Time and Money
I didn’t stay with Amway for long as the network marketing type of system just seemed like a hell of a lot of hard work, and it was hard to sell products that people could buy similar versions of for a fraction of the price.
What Is Amway Exactly?
Amway is MLM, it’s network marketing and it is a pyramid system. Amway like to claim that it isn’t, but it is. There are the big wigs at the peak, down lines that expand out further and further, creating a typical pyramid structure. And it is those people at the top or near the top who rake in all the cash. The rest of the people in the pyramid are just the worker ants, really.
Any systems where there are multiple tiers are essentially a pyramid setup, and Amway is all about creating endless multiple tiers. Their products are so damn expensive because everyone on every tier is getting a slice of the pie, albeit a very small one. The lower down the pyramid you are, the smaller the compensation.
The idea is to build a healthy down line that keeps expanding. That way you have the best chance of actually making some money from your efforts, as you will receive a cut of the money from every sale in your down line.
But building successful down lines is the hardest part of all. Essentially you have to hassle the hell out of everyone you know, trying to entice them to join up.
Once you’ve effectively burned all your family and friends, then you are forced to venture further afield, trying to lure strangers along to Amway meetings, or badgering them to watch Amway videos or meet with you for a one-on-one session so you can introduce the “opportunity” to them.I
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How It Works
As I said, with all network marketing/MLM schemes, the way the parent company makes money is by insisting everyone who joins commits to a minimum monthly spend on products to remain eligible. If you don’t keep up the minimum monthly spend, you risk forfeiting any commissions due to you. This guarantees that the company survives and that those at the top get richer.
As a distributor you don’t get paid for working for Amway. It’s all on a commission basis. So if you fail to sell anything in a given month, Amway has lost nothing, and they still make money on your minimum monthly spend.
You’re never going to get rich from an MLM scheme simply by selling products to your inner circle. You need to expand, grow down lines and hope like hell you recruit a few zealous and enthusiastic winners who will actually make money for you.
This constant need to recruit other members, do one-on-one information sessions, spend your money of promotional materials to hand out to prospective distributors, and trying to drag suspicious and unwilling people along to Amway meetings is all very costly, physically and mentally draining and extremely time consuming.
If you can build a large and active down line, then you are in with a shot of making some real money, but it’s a hell of a lot of hard work and not likely to happen for about 99% of people out there.
Why It Likely Won’t Work For Most People
Just about everyone on planet Earth has either heard of Amway, been involved with Amway, or been exposed to numerous similar MLM and network marketing systems. It’s a highly saturated industry, and many people are just plain sick to death of hearing about Amway. It’s the very reason why Amway itself instructs its members not to mention the name “Amway” when first trying to recruit people.
Why?
Because they know the very word Amway puts people off.
Unless you are either the creator of an MLM system, or get in very early on the ground floor, you will always be fighting an uphill battle to establish a profitable business. Any further down the line and you will basically just find yourself buying products for yourself, alienating everyone you know, and wasting a hell of a lot of time and energy trying to get people interested.
Yes, you can potentially make money with Amway, but with the company already being in existence for more than half a decade, how saturated do you think Amway might be? If you like the idea of MLM, then you are far better off trying your hand with a new MLM start up rather than one that’s been around for nearly 60 years.
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Who Is The Target Audience?
Amway and other network marketing schemes really target those who are looking for something other than the 9 to 5 grind, but don’t really know how to start a business of their own, or don’t have access to the capital required to launch a small or medium-sized business.
Amway sells the dream lifestyle, and there’s nothing wrong with wanting to go after that dream. The only problem is, it’s going to be very hard to make that dream life come true by hooking up with Amway.
The Pros
- Their seminars are very motivating
- They sell the dream
- Freedom = Time and Money
- The company has been around for a long time
The Cons
-
The Amway name has built up a bad reputation over the years
- You need to constantly hustle to even feel like you might be getting somewhere
- You will likely alienate your family and friends
- Their products are way over-priced
- It’s really, really hard to make profits in Amway this late in the game
- You need to spend )or sell) a minimum monthly amount on Amway products
- It’s a pyramid scheme
- Amway has undergone numerous investigations
- Amway was forced to pay a settlement for a class action suit in 2010 for alleged fraud and racketeering
Tools and Training
Those in your upline are generally responsible for training you up, as well as the meetings and seminars you will likely regularly attend. Much of Amway’s training is more focused on hype than anything else.
What they really want to do is sell you the dream so hard that you’ll be motivated enough to get out there and make it happen; recruiting new members who will be forced into the minimum monthly spend scenario. Amway isn’t primarily selling products. They are selling the Amway system.
How Much Does “Amway” Really Cost?
Essentially you have to sell a minimum amount of retail product every month. If you can’t find enough people to sell Amway products to in a given month, then you’ll be forced to purchase products for yourself (whether you want them or not) to meet your minimum monthly quota.
The minimum cost varies from country to country, but as an approximation you need to either sell or purchase for yourself Amway products totalling about US$300 per month. When you first get started you will also be required to spend on stationery and promotional materials to try and sell the business and the dream to others.
Is “Amway” A Scam?
In some ways I’d label this a scam, as it sells a lot of hype, tells people not to mention what the business actually is, uses a lot of deceptive marketing and encourages its members to do the same, and functions on a classic pyramid model of compensation.
Overall I can’t categorically label it a scam because there are people making money from Amway. It is a real business, albeit rather dodgy in a number of ways, but it’s incredibly difficult to make money as a member of Amway this far down the line.
The bottom line is, you’ll be starting way down at the base of an incredibly huge pyramid, and it doesn’t take a genius to realise that it’ll be near impossible to start a successful Amway business these days.
Look for another MLM opportunity – a new one – if you really want to get involved in network marketing.
A Far Better Alternative to Amway
I prefer affiliate marketing. It doesn’t involve down lines, but it can create the dream lifestyle of time and money freedom that Amway preaches. It’s cheap to get started, there is no minimum monthly spend on products, and you don’t even need to buy and sell any products.
You simply promote the products of other companies and get paid commissions when someone makes a purchase through your unique affiliate link.
I trained with Wealthy Affiliate (read my review here) and they taught me much of what I know about affiliate marketing and making money online. It’s free to get started and take a look at what WA has to offer.
If you would like to join more than a million other online entrepreneurs, then click on the banner below to read more about the opportunity.
Darren Burton
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Hello Darren,
Amway is definitely a pyramid scheme. A few years back, there were a couple of guys both named Dave from Empower Network. Empower Network was a pyramid scheme as well. Anyways, Dave and Dave were supposedly super salesman at Amway before they started Empower Network.
They are still around but there seems to have been some changes. Only one Dave is left and there is a new scheme called Aspire, which was started by a former Empower Network member. Anyways, I’m with you! Affiliate marketing is the best way to go.
Jack
Thanks for writing in, Jack. I’m not a huge fan of network marketing or MLM. For the creators of the product or idea it’s great, but not so much for the sellers and distributors. I believe most systems like Amway are borderline scams at best, involving a truck load of effort with very little reward. Empower Network is one of the worst.
I’ve heard of Amway before but didn’t know much about it, really. Doesn’t surprise me that it’s a giant pyramid scheme and smoke and mirrors. I though it was funny the way you put it – to make any money or even break even, you have to hassle the hell out of everyone you know. And that they target a vulnerable group by selling big dreams of the future and escape from the 9-5 grind. thanks for the thorough review, I’ll check out your other recommendation instead!
Hi Penelope,
Amway has been around for a very long time and some people have gotten rich out of it, but as with all pyramid schemes, they’re set up in such a way that a few near the top rake in all the cash while thousands of worker ants down the bottom are scrambling for the crumbs left over.