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…
Product Name: Amway
Founders: Richard DeVos and Jay Van Andel
Product Type: MLM/ Household, Health and Skincare Products
Price: Starter Kit $62 and Product Starter Kit $99.99
Best For: People who are experienced in MLM and have the ability to recruit people. They should enjoy the face to face encounters with other people they don’t know.
Summary: Amway is a legitimate MLM company. They have been in business for 60 years. However, even with all their years of experience, they went thru some legal battles. I’ll talk about them here. The average income made by their business representatives is very low and it’s one of the reasons I do not recommend them.
Rating: 40 out of 100
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:
These are vitamins and dietary supplements made from plant ingredients grown on their organic farms in the U.S., Mexico, and Brazil.
This is Amway’s top of the line skincare, oral care, and makeup products made from natural plant ingredients.
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 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.
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 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:
- Sell the products at retail prices and earn from the company’s profit margin.
- Earn bonuses based on the volume of product sales.
- 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
- 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:
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.
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!!
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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.
12 thoughts on “Is Amway Bad? (A Pyramid Scheme or What)”
Thank you for this very informative post where you explained how Amway works.
I assume that you are right about it not being a pyramid scheme, but I realized the cons are much more than the pros.
Therefore I totally agree that “Wealthy Affiliate” is one of the best ways to learn affiliate marketing on the internet to learn how to make money online at home. I can see it does need a lot of hard work, patience, and love for what you are working on.
You’re welcome and thanks for reading!
Amway is legitimate. It has gone thru its legal battles and after being criticized by FTC, they made a lot of changes.
However, the average income made by the IBOs is very low.
The Affiliate Marketing business model is the BEST way to make money online. One of the reasons is because there is no “chasing” after people. When people are trained properly and learn how to get FREE traffic, they can earn a sustainable long-term passive income. This is where Wealthy Affiliate comes for their training.
Successful entrepreneurs will always say they work hard, make sacrifices, and thru it all, they enjoy their massive rewards.
An online business is still a business so yes, hard work, perseverance, and putting the love into it are the ingredients to success.
I’ve been looking for a way to make money online.
I first came across Amway nearly forty years ago when someone tried to recruit me, must confess I got very close to joining them. From what I can see you really have to be a sociable person to join them.
MLM has never been a favourite of mine. When you talk about Amway’s MLM system it makes me feel I still don’t want to go that direction. I am amazed they’ve been in business that long.
I’ll tell you what though, you really sparked an interest for me in Wealthy Affiliate… I’ll check them out.
You’re welcome and thank you for your comment.
MLM is a tough business to be in. If you join a new MLM company, you have a better chance to make money. Once the company has matured over the years and you join, it’s not that easy to make money.
Wonderful, I’ll welcome you on the inside once you join Wealthy Affiliate for free.
I use to be in Amway for about 21 years
It was good I learned a lot and things that I thought I could never do but they taught me through their Business plan. They made a lot of millionaires, unfortunately, I wasn’t one of them.
No, it’s not a pyramid and they won their battle in court over that.
Thank you for your comment!
Amway has been in operation for 60 years and the people who joined early made huge fortunes.
I know a couple of people who used to be in Amway, both worked extremely hard but not making enough money to sustain themselves. The training they received, I know they apply the mindset still in their daily living.
Yes, Amway did win their case but were heavily criticized by the decision makers and so they made changes to the Business plan which is what it is today. They are definitely a legitimate MLM company.
Hello Monica. Many years ago I chuckled with Amway; Indeed some of their products are top. But they’re expensive. Buying from time to time is worth it, but doing a business of it does not seem to work. Time is lost in my opinion. I also think it is a bit overtaken for today.
From what I can see then is if I start a business today without having too many financial resources, WA is better suited. Ok, I’ll do some thinking on this.
Thank you for your comment.
Yes, Amway is a bit oversaturated now. They do have some quality grease-cutting cleaning products.
I didn’t have much money to invest and that’s why I went with Wealthy Affiliate, I started with their free starter membership.
This post is very informative. I, myself, just recently found out that Amway was still operational as I thought they were out of business. I’m glad to hear Amway still has a variety of products suitable for everyone.
At one point I had signed up and got all the material, but I guess I was just not cut out for selling. Or, I think at the time my marketing skills were poor. But, after reading this post and knowing that it is still active I might just think to go back and see what happens.
Thanks very much for the heads up.
I’m glad to hear you’re considering going back to Amway. I wish you well.
Thanks for your comment.
What you say is true about Amway. Me personally I was an IBO at Amway.
What I realized was the money is not in the product that you buy it’s in your network. The most difficult thing in that business is to deal with people because sometimes they don’t understand the opportunity that you present to them. They’re a good company but I’m glad I’m out.
Thank you for your comment.
You’re right not many people will see it as a business opportunity, that’s why IBOs really need to go out and socialize. MLM is a tough business to be in.