Is Amway Bad? (A Pyramid Scheme or What)

AMWAY, the grandfather of MLM IS alive and doing well. Some people think they’re a BAD company. You know, A PYRAMID SCHEME. Were they misleading people OR WHAT?

My friend’s grandparents were selling Amway products and even the family construction company I was a partner in (retired now) used their grease-cutting cleaning solution in their equipment maintenance shop.

I have lots to reveal to you in my review, but first, let me commend you for doing your research here. It’s the only way to keep yourself from being scammed and find legitimate ways to make money online.

Just so you know, I am not associated or affiliated with Amway so rest assured I’m not here to sell you their products.

I do lots of researching on products and based on my findings, I write reviews on them to help you make informed decisions.

Ok, let’s begin…

What Is Amway?

Amway sells a diverse selection of home care products, beauty and health products.

It’s a long-time surviving (MLM) multi-level marketing company, founded in 1959 (Ada, Michigan) by Jan Van Andel and Richard DeVos.

The company’s belief is to help other people have a new beginning in life, be profitable, have success and excitement.

Together with its sister company, Alticor, they reported sales in 2018 of $8.8 billion. You can see they’re still very much alive.

Take a look at their successes:

• Located in over 100 countries and territories
• Over 450 products
• Over 1 million independent representatives
• Paid out the most bonuses and incentives in the MLM industry worldwide since its inception in 1959

They are definitely the grandfather of the MLM industry. Wouldn’t you agree?

Inside Amway – Their Brand Products

Amway has farms located in various locations. For instance, they have an organic farm in Rancho El Petacal – Jalisco, Mexico that grows chemically free plants to be used in some of their health products.

Their organic farms are also located in California and Trout Lake, Washington State where they grow herbs. 

They also have a farm in Ubajara, Brazil that grows Acerola cherries.

Some of their most popular brand name products are:

Nutrilite

These are vitamins and dietary supplements made from plant ingredients grown on their organic farms in the U.S., Mexico, and Brazil.

Artistry

This is Amway’s top of the line skincare, oral care,  and makeup products made from natural plant ingredients.

eSpring

This is their Water Purifier and Carbon Water Treatment System used in homes to give families all over the world, drinking water that is cleaner and safer than their contaminated drinking water.

 

Atmosphere

Atmosphere is the brand name for Amway’s air treatment systems. They can be used in homes and vehicles and be monitored and controlled by mobile devices.

iCook

This is Amway’s all-inclusive 25 pc cookware and non-stick frying pans.

Legacy of Clean

These are Amway’s environmentally safe household cleaning solutions and laundry detergent that are free of phosphate. 

XS Energy

XS Energy is the brand name for their energy drinks without sugar and nutritious sports bars that have no GMO.

How To Make Money With Amway

Amway is typical with other legitimate MLMs, in that there are 3 ways to earn an income:

1. Sell the products at retail prices and earn from the company’s profit margin.
2. Earn bonuses based on the volume of product sales.
3. Become an IBO (Independent Business Owner) and earn bonuses and commission by recruiting other people into their MLM networking program.

Not familiar with the term “profit margin”? Here’s a great video (2 mins) to help you understand it.

How To Get Started In Amway

Amway will say “it’s very affordable” and “low risk” to start your own business with them. 

They have 2 kits:

1. Starter Kit ($62 One-Time Fee)

This is the registration fee and comes with everything you need to get started with your business as an independent business owner (IBO). The kit includes the following:

• Getting Started Guide to understand the Amway business
• Brochures
• Catalogues
• Compensation Plan explaining how the commissions and bonuses work
• Training Materials
• Marketing Resources
• Leadership from the owners of a company that has 60 years experience in the MLM industry
• News on their best selling brands

I hope you agree with me that the price of the Starter Kit is reasonable. It covers Amway’s cost of stationary and administrative costs.

They also have a 100% Money-Back Guarantee within your first 90 days. This gives you plenty of time to learn more about their business, and take a good look inside to decide if you want to join forces with them.

If you’re still not happy, they refund your $62.00. Just remember, you have 90 days.

2. Product Starter Kit – Optional ($99.99)

The Product Starter Kit has products that you can sample to learn more about it. Using the product is one of the best ways to sell your product because now you have authority over it.

Here is what Amway will give you:

• $245 worth of their full-size products for retail sales or use the products for demo purposes
• Sample-sized packages to share out
• Tips on the products when introducing them
• 10 Mini-catalogs for each kit containing products and business information
• Free Amway training

In my opinion, the price of the Product Starter Kit is also very reasonable.

You get the opportunity to try the products and become more confident in talking about them. You can also sell them at retail prices and start making money on them right away.

The products are worth more than the fee.

You might be thinking, this all sounds impressive so far but before you spend any of your hard-earned money, ask yourself if you can really make money on Amway…

Amway’s Compensation Plan

LOL… I must admit anytime I do a lot of researching on MLM company’s compensation plan, it literally makes my head spin… seriously, why do they make them so complicated?

I would be going over it in detail so if you want to see their compensation plan, just CLICK HERE for their PDF. 

Anyway, here we go… there are 5 main ways to receive compensation:

1. Your Personal Consumption – When you purchase Amway products for your own consumption, you get them at their price and get money back from their compensation plan.

2. Sell Products at Amway’s Suggested Retail Prices or Sell Them At Your Own Prices – When you sell products at retail prices, you will earn income based on the company’s profit margin. 

3. MLM Networking – You earn residual income when your frontline and downline purchases products and make sales.

4. Earn Bonuses – Earn bonuses when you meet certain levels of points/sales and become a top performer. Get rewarded with trips, additional products and other gifts.

Here’s an Amway Compensation PLan Breakdown video if you want to visually see it. There is more to it…

 

Do Amway’s Products Really Work?

Knowing that Amway’s been around for a long time, there would have to be positive and negative reviews. I think what’s important, however, is to keep in mind that there is no such thing as a “perfect” company.

Even in our personal lives, we can’t please everyone. AND NO, I’m not biased about Amway.

I did quite a bit of research to find if Amway Products work or not. What I found was testimonials from at least 2 different websites:

BBB

As you can see, Amway receives an A+ rating from the Better Business Bureau so that is quite an impressive achievement.

Overall, from what I can see, there were 14 closed customer complaints in the past 3 years and 4 closed complaints in the last 12 months.

You can see more in the BBB Summary screenshots below…

You can see they received some good testimonials and some negative ones.

Consumer Affairs

Similar to BBB, there are good testimonials and some not so good ones.

What I Like About Amway

1.100% Satisfaction Guarantee

if you’re not happy with their products or business, they will work you until you are satisfied. 

2. Variety of Warranty Programs

Amway has services and repair programs on durable products.

3. No Purchase Requirements

There is no purchase requirement for independent business owners to meet.

4. Well-Established Company

The fact that they have been in business for 60 years as an MLM company says a lot for their reputation.

To me, I think of them as the grandfather of MLM and they’re not a pyramid scheme. The other thing about them is they have managed to stay with the current trends and internet technology.

5. Diverse Products

Amway has a variety of products, in fact, over 450, ranging from air cleaners, skincare products, makeup and the list goes on that you can promote and make money selling them.

There are a lot of people even to this day, who are still purchasing the products for their businesses and home.  In fact, the construction company I was a partner in, still uses the cleaning solutions.

By the way, if you’re interested in becoming an affiliate marketer you might be interested in joining affiliate programs to promote products like water purifiers and grease cutting solutions. These can be wonderful niche topics.

6. Some People Are Making Money

There’s no doubt in my mind, some people are making money, especially the ones who joined early into their business opportunity.

What I Don’t Like About Amway

1. Income Is Low For IBOs

Take a look at the screenshot and you will see the average gross monthly income in 2016 was only $207 in the USA.

When I do the math based on 30 days, it works out to $6.90 a day which comes to $.86 an hour.

The minimum wage in Alberta, Canada where I live is $13.

The $207 was based on the active IBOs and if you included the non-active users, well, the average gross monthly income would be significantly lower. According to their screenshot, 48% of IBOs were active.

You might also be interested in reading this “Amway: The Untold Story  – Amway Statistics” written by Bradley Orner, a former IBO and engineer of Amway for 3 ½ years… 

2. Amway Has A History Of Legal Battles

1977, the FTC (Federal Trade Commission) in the U.S, investigated Amway for suspicious business practices they considered deceptive.

The end result, after 2 years of investigation, they declared they were not a pyramid scheme. Amway was criticized and so Amway made some changes in their MLM business practices.

1983, Amway paid $20.7 million to the Ontario provincial government (Canada) on criminal charges of tax and duty evasion.

2010, a suit was filed against Amway/Quixtar distributors for misleading their IBOs regarding the cost of the business and how much they can make. This was in the West Michigan News. 

3. Always “Chasing After People” To Recruit

As usual with the MLM business model, should you decide to join as an IBO, the first thing you will be asked to do is make up a list of names of your family and friends.

If you’re not a social person and don’t like being in front of people demonstrating products, or the face to face encounters, my advice is to stay away from any MLM companies.

I was involved with 3 MLMs and did a lot of hard work which I didn’t mind, but I failed because I’m not a social individual.

The people who are successful are the ones who really push to recruit, in other words, they will relentlessly be “in your face”.

The other thing is, approaching family and friends is a real dicey situation. Eventually, they will avoid you.

Is Amway A Pyramid Scheme?

The answer to the question is no Amway is not a pyramid scheme.

I justify this by what FTC (Federal Trade Commission) has reported and I will say, Amway was heavily investigated by them.

According to the FTC, even though Amway mislead people with false income claims when recruiting new people to their business, they considered it different from pyramid scheme for several reasons:

#1. The “up-front head hunting” fee for a new IBO was not a large investment.

#2. The IBO did not have to carry “inventory loading” of nonreturnable inventory.

#3. The IBO only had to pay a small fee for their sales kit.

#4. Amway offers 3 different ways for IBOs to sell their products. This meant the business owners were not forced to purchase products. It also prevented IBOs from forcing their recruited to purchase unnecessary inventory for the purpose of earning bonuses.

The 3 different ways are:

• The IBOs have to purchase back unused and sellable products that were purchased by their recruits when requested.

• IBOs can only sell the products at either wholesale or retail but can set up their own sale price to at least 70% of what they paid each month (70% rule).

• The IBO’s sponsor has to make at least 1 retail sale to 10 different customers a month (10 customer rule).

#5. Lastly, Amway’s MLM system was not to have IBOs recruit people just to earn profits on recruitment fees, instead, the focus was to sell the products.

I know their products are excellent and I am a health fanatic and so hearing from their organic farms and contribution to countries worldwide is very impressive. I also commend them for being the grandfather of the MLM industry but I still will not recommend them. 

Use the products if you like but to join up as an Independent Business Owner (IBO) is extremely tough. It’s going to require a lot of “chasing after people” AND the average income that I spoke about earlier is not worth your time and effort in my opinion.

It’s up to you to decide!!

A Better Solution For You – My #1 Recommendation

My question to you is, how would you like to have a business of your own in any niche you like and promote any products you want?

Want to see how people are making money?

Meet Deb… CLICK HERE to read her success story!

Meet Brok… CLICK HERE to read his success story!

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If you haven’t heard of Affiliate Marketing, here are some reasons why you would want to consider this business model over MLM:

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Are you interested?

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Hey Folk,

Thanks for reading. Have you been involved with any MLM companies? If you have any positive or negative experiences with MLM, I would like to hear from you.

If you have any questions or comments regarding my review, it would be awesome if you would kindly put it in the Comment Box below.

Monica