AMWAY: An MLM Scam? Recent Comments
August 26, 2009 by Sean Kelly
Filed under Business
Is multilevel marketing giant Amway a scam?
Brad doesn’t think so. on 2009/08/22 at 9:24am Brad wrote:
So many times have we all read posts from those who claim to be CEOs, heads of corporations, multi-millionaires, billionaires, etc. yet can’t get a simple point across or insist on bashing and finger-pointing.
The bottom line is that it is not something for nothing, or pie in the sky, as L-Dub calls it, but the success can be very real if you are willing to put in the work. If you do not like doing some of the things that will help your business grow, such as attending meetings, attending team callings, functions, reading books, listening to the CD’s and things of that nature, I would implore you to ask yourself whether you would prefer to wake up at 6 A.M. every day, sit in bumper to bumper traffic, have to ask your boss for a raise vs. creating one for yourself, work 5 days a week to have 2 off, get 2 weeks of vacation a year…I think you can see where this is going.
It’s a matter of priorities. At first I didn’t see the value in reading books, attending meetings or listening to CD’s, but as I did those things I found myself learning, and growing as a person and developing the skill set I need to lead a large team. As time went on, I found that my upline/crossline beleived in my wife and I even at the times that we didn’t beleive in ourselves…and we are pretty motivated.
However everybody has moments of weakness at times. I look forward to doing the things that the PROVEN team teaches me so that I may look forward to a lifetime of success. Also, for those that are on here to find answers to questions and gain some clarity…meetings, books, CD’s, functions….they are all optional.
Amway distributors are self-employed and may operate their business how they see fit. If you do find benefit in such things, the cost is negligible. The books are common books that you can buy at any bookstore for $10-15 a piece. The CD’s are $7.50 a piece. The weekly meetings are $4 for admission, and that is simply to cover the cost of renting the building, not to turn a profit. We aren’t talking about high dollar acquisitions here, and the value of the knowledge that you gain from that $10 book will far surpass what you paid for it.
Does it cost money to start up your business? Yes…my initial investment was appx. $175, and there is a $50 annual renewal fee. You may liken that to annual dues that warehouse club-type stores charge for the “privelige” of shopping with them.
Are the products overpriced? Not hardly. Popular energy drinks that stores sell cost around $2.25 per can. Amway’s brand costs $1.85. Amway’s laundry soap costs less on a cost-per-use basis than the major brand most people use, and outperforms it to boot.
In closing, I would like to say that I paid $300 for an Xbox 360 and I’m pretty sure that when I beat the final boss on Rainbow Six Vegas that the console won’t spit out $75,000. My $175 initial investment for an Amway IBOship however? Well, not yet, but the potential is there at least. And that’s more than most people can say for what they are doing.
Jeffrey Feldman has a different take on the Amway MLM opportunity. At 2009/08/25 at 1:19am, Jeffrey wrote:
Amway was a mixed bag for me. I lost money buying lots of overpriced products and marketing materials. I do believe some products they have are exceptional – like SA-8. Problems is that it is WAY more expensive. I cant see spending 7 dollars on toothpaste when I get get one that will do a satisfactory job at Walgreens for one dollar.
I beleive many in my former upline were making their money buy selling books, tapes, and seminars. And thats ok to a point because it really did help me – but really made me go broke too fast.
I am glad I found something else. Best wishes for those that stay with it.
Jeff
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Fantastic info
How long you been in mlm sean I only ask because you seem so on top of your game.
Thankyou
James Dempsey
Agree with Jeff. The Amway products are too expensive when you compare to Walgreens or WalMart. And the tools are a constant drain on your finances. Seems as if the tools sales were more of a priority for my former upline than the success of the downline.
I think they’re both right…
Brad seems happy with Amway and his upline and that makes it easier for him to invest the time and effort to make this work for him.
Jeffrey was not happy with Amway or his upline and so he wasn’t able to make the commitment needed to succeed and moved on to one that works better for him.
What they’ve illustrated with their diffrences is the one thing they haven’t said. You need to find the MLM and upline that you’re comfortable working with in order for it to be sucessful for you.
If it would be a scam I don’t think the Washington Post would write an Incredible review on it. Also, scams don’t last long and Amway Global has been the leader in MLM for the past 50 years!
What incredible article by the Washington post? Forbes called Amway a pyramid scheme. Just becaise they’ve been around a long time doesn’t mean Amway IBO’s make any money. You guys are funny.
Something that has been overlooked in most of the criticisms of Amway/Quixtar is the Registration Contract itself. Unless you are an attorney, you have no idea just how restrictive, one-sided, and dangerous it is to sign an Amway Independent Distributor Registration Agreement.
First, if you never achieve any success with Amway, you don’t risk much by signing the contract. But if you reach a level that the corporation considers successful and then try to leave, watch out!!
On the back of this form, Item 6 describes Amway Global’s Proprietary Information and Trade Secrets. This paragraph states that any information in the Line of Sponsorship is the proprietary, trade secret information owned exclusively by Amway. This means that even though you will spend time, gas money, and money for other sales materials; you convince a friend or family member to join Amway; you collect their personal information; and you enter that information into Amway’s system—now that information is owned exclusively by Amway and you cannot use it without their express permission and ONLY to build your Amway business. Why does this matter? See Item 8.
Item 8 is the Non-Solicitation Agreement. Any normal person would define “solicitation” as the act of urging, persuading, petitioning, or requesting. For example, you resign from Amway, and twelve months later join another network marketing company. You and I would define solicitation as actively calling other associates in Amway and encouraging them to quit and join you in your new venture. You are I are wrong!!
Here is an example:
You resign from Amway. You wait out the “non-compete” and six months later you join a different network marketing company. You and I would think that we cannot call or otherwise contact another Amway IBO to ask him to join your new business for two years, according to the non-solicitation clause. You and I are wrong!
A former associate from your Line of Sponsorship in Amway calls you seven months after you left Amway, asks if you are involved in another business, and asks you to give him some information about that new business. The Amway Global attorney says that unless you say “no,” you are guilty of solicitation and have violated this clause!
On the front of the Registration Agreement is the Agreement to Mediate and Arbitrate any disputes. Seems harmless enough, until you realize the truth. If Amway decides you have violated any of it’s Rules, it can haul you in to arbitration. The arbitrator is selected from a company that relies on large corporations like Amway for business, so they are automatically biased. (In other words, if they rule against Amway, Amway won’t bring them any more business!) Arbitration is binding—you have no recourse when you are ruled against. And Arbitration is secret, so you and I have no way of knowing how many other existing and former IBOs have been sued in Arbritration and lost.
Further, you must pay one-half of all the Arbitration costs, currently running about $6,000 per day. And any arbitration judgement will be upheld in court, so once the ruling is made, you are stuck.
Don’t believe me? I achieved the Emerald level in Quixtar. The most I ever made was $75,000 one year from Quixtar. In 2007 there was a big upheaval and Quixtar issued a statement saying “Just Go, Team.” As a result, most of the IBOs in my group quit. Many more did not renew in 2008. So I quit also—what’s the point of building a business if the company will not protect it? Mind you, I resigned AFTER most of the people in my group had already quit.
Seven months later I joined another network marketing company. A few of the people who were formerly in my Quixtar group contacted me and asked to join my new business. I made sure they had completed their six-month non-compete in Quixtar’s rules, and then registered them with my new business.
Quixtar has sued me in Arbitration saying that I violated the Non-Solicitation clause. They are asking for millions of dollars in damages because of the lost business I caused them. (Remember, these are people who had already quit Quixtar before I quit!!!) I have to take this seriously because I will be held to any judgement the arbitrator decides on. And the last guy that I know of who was sued by Quixtar in arbitration was ordered to pay Quixtar $12 million.
Don’t believe me? Buyer, beware.
The Amway cult has contributed to broken marriages, strained friendships, church problems, and other assorted ills.
For true stories visit mlmsurvivors.com and search their archives.
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Amway apologists nearly always repeat the same tired themes: financial freedom; the 2 to 5 year plan; fire the boss; being ‘independent’, and so forth. They are taught to ‘believe’ in the face of some very disturbing circumstances where they are always required to ‘pay out’ and not necessarily ‘receive in.’
Amway products are basically so priced as to be absolutely unretailable outside of the ‘distribution chain’ of ‘distributors’ who for all intents and purposes are the only retail customers that Amway can brag about. These erstwhile business men and women raid their own warehouses and stock the excess in their pantries.
Amway believers are exposed to the illogical ‘tool and function’ business run by the Amway ‘kingpins’. This is not a benign affair as some Amway believers claim. Total expense for the vast amount of books, CDs, tapes, phone message systems, quarterly rally attendance, and related transportation-lodging expense can extend into the thousands of dollars. Yes, one CD can be about $8 dollars, but this is just a mere drop in the bucket to what I’ve personally seen people actually spend. Amway expects all these ’supposed independent business people’ to basically cover all their own ‘over-head’ and provide many hours of personal time (for basically free) in the hope that they recruit others.
Amway IBOs may pay lip service to the idea of ’selling’ the badly overpriced, unremarkable products, but in the end, they are taught the ‘art’ of ‘duplication’ and the well known principle of ‘buy from yourself and teach others to do the same’ for which they believe is the ultimate key to finding riches in the Amway ‘game of greed.’ Sadly, in the end, the enrich the top of the pyramid kingpin distributors and the Ada Devos-Van Andel criminogenic swindlers based in Ada, Michigan.
Amway apologists brag that Amway has been in existence for over 50 years and hold this out as legitimacy. They fail to mention the thousands and thousands of people who have been suckered, run through the Amway grist mill, over this period of time where the rolling failure rate for nearly all entrants approaches 100 percent. Amway has been described by Robert Fitzpatrick, pyramid scheme expert, as the ‘American Scam’.
It is interesting to note that Amway, at the present day, founded as the ‘American Way’ does most of its business in places like Communist China. They seek to find new ’suckers’ for their scheme outside of the U.S. because their affairs and reputation have deservedly been scuttled in the Americas. Indeed the financial and social distress of the Amway cult makes Amway a pernicious world cult, which for all intents and purposes makes it just as pernicious of a scheme as Scientology (which has recently been convicted in France of Stealing the livelihood of believing ‘adherents’ there).
By a majority opinion of high justices in the world’s largest democracy, the Republic of India, Amway is in violation of India’s laws against money circulation schemes, similar to U.S. laws against pyramid and Ponzi schemes in the U.S..
Amway hides behind an ever increasing ‘labyrinth’ of independent corporate structures, but rest assured, all the money extracted from this ongoing regime goes into the coffers of U.S. based racketteers. These fellows then use these ‘revenues’ to buy protection under the guise of one Richard Devos.
Recently it has been announced that the American Way is ‘outsourcing’ many of its corporate ‘accountant’ jobs out of country. These folks after having ‘taken’ Americans for half a century are basically moving on. They benefit by taking their affairs to China and elsewhere, where differences in culture and language tends to mask the truth of how they’ve swindled the American public in their own homeland.
To advocate Amway to others should be a crime: Intent to Defraud. Word to the wise. quixtarisacult.