Amway is a multi-level marketing company that sells health, beauty and home care products. It is still in business and we will explain why. The company is one of the largest and oldest MLM companies in the world. It is also one of the most controversial because it’s been accused of being a pyramid scheme for years. We’ll talk about what Amway is, how its selling strategy works and its future plans to keep growing even more than it already has.
How does Amway work?
Amway uses independent distributors to market its products and has been accused of being pyramid scheme for years because the only way to make money is by recruiting more people into your “downline.”
This is how Amway works:
- Affiliates join Amway as Distributors for a fee of $55.
- They then have an opportunity to make money by selling products and by recruiting others into their “downline.”
- Each distributor is placed at the top level of a three-tier system, which includes two additional lower levels. The first is made up entirely of recruits, called Personal Retail Sales (PRS). The second is the group of people recruited by them, who are called Business Facilitators or BFS.
- If a distributor recruits more distributors, they will go to their third level and so on. A recruiter is therefore said to have “multiple legs.”
- Every month you must meet certain performance criteria to maintain your rank.
- You can increase your income by recruiting others into your downline, who will then have the opportunity to build their own leadership group under you via multiple legs.
What is the history of Amway?
Amway is one of the oldest MLM companies in the world. It was founded in 1959 by Richard DeVos and Jay Van Andel, two multi-millionaire friends from Grand Rapids, Michigan.
It is said that Amway founders DeVos and Andel began selling Nutrilite vitamins to their family, friends and neighbors in Ada, Michigan. The company, still based in Ada, is currently owned by the families of DeVos and Van Andel.
Amway is now one of the most successful MLM companies with $11 billion in annual sales.
Amway is also the parent company of Quixtar, which is another MLM selling Amway and other companies’ products but is not as successful as its big brother Amway is today. It has only $200 million in annual sales compared to Amway’s $11 billion.
It is said that 90% of its distributors make little to no money and is very difficult to advance above the lowest rank.
Why is Amway so controversial?
Amway is also one of the most controversial MLM companies because it has been accused for years by organizations like The FTC, Business Consumer Alliance and Forbes of being a pyramid scheme even though they have never filed charges against Amway or any other multi-level marketing company.
In 2000, it was sued by several organizations for operating what they described as an illegal pyramid scheme but denied wrongdoing. In 2012, Amway reached a $56 million settlement with the U.S. Federal Trade Commission.
Why haven’t I heard of Amway products?
Amway is not as well-known as companies like Avon, Mary Kay and Tupperware.
Aside from Amway’s Quixtar division, the products are also sold under different names by local distributors in several countries including North America, South America, Europe and Asia Pacific.
What are the fundamental rules of Amway?
There is no concept of “free” in Amway. You can’t be a distributor without paying the $55 fee to become an affiliate.
Amway is also only available in certain countries and is not allowed by law, so it is very difficult for you to join if you are located outside North America, South America, Europe and Asia Pacific.
Amway is also not allowed to be sold on Amazon, eBay or any other online stores because its parent company is Quixtar.
You will only find the products in Amway’s website and at your local distributor’s office if you live within North America, South America, Europe or Asia Pacific regions.
It is not easy for anyone who is interested in becoming an affiliate or a representative because of its strict rules and requirements. You must be at least 18 years of age, have a high school diploma or GED equivalent and you must also pass the entrance exam with 80% accuracy.
You must also attend training courses about Amway’s products before signing up as a representative.
Lastly, in order for you to earn money from Amway’s products or services, you must purchase Amway’s supplies and tools, so there is a risk that you will not earn any money if the products don’t sell.
Why do people fail at Amway?
People fail at Amway is because they don’t have a solid business plan and can’t sell the products.
Many people give up on their dreams of earning money from this company because it is too difficult to achieve success with its strict requirements for distributors or representatives.
In addition, you will only earn money if you can sell the products. It is also very difficult to advance in rank because of its requirements on attendance, training courses and seminars that must be paid for by your own expense.
How is Amway different than a pyramid scheme?
The difference is that the structure of a pyramid scheme is illegal and Amway is not.
Pyramid schemes are where people can only earn money by recruiting new members but in Amway, you also have the option to sell products or services for profit.
Why is Amway’s reputation so bad?
Amway is one of the most controversial MLM companies because there are a number of complaints about its high-pressure sales tactics and poor customer service.
It is also often criticized for being a pyramid scheme, even though they have never been convicted in court.
In addition to Amway’s problems with legal issues, it has strict rules that are difficult to follow, is not available in many countries and is only sold online through its parent company Quixtar.
The products are also often overpriced because there is no competition from other companies, so you can’t shop around for a better deal if they don’t have the product or service you want.
Who are Amway’s competitors?
Amway is competing with other MLM companies like Mary Kay, Avon and Herbalife.
They are also in competition with direct sales companies that only sell products through independent representatives or at third-party retailers instead of having their own distribution network.
In addition, Amway is also competing with other companies that offer health and beauty products as well as home care supplies.
Last but not least, they are in competition with direct sales businesses like Tupperware or Scentsy who use a one-tier commission plan for all their representatives regardless of where they sell the company’s product or service.
What is Amway’s future?
Amway is trying to keep up with its competitors because it is losing market share in North America.
It is also focusing more on selling products at third-party retailers rather than through distributors.
Amway’s future is uncertain but there are rumors that the company will be sold off or shut down if they don’t turn their business around.
There is also a possibility that the company will be sold to an investor who is willing to fix its problems and turn it into a successful multi-level marketing organization again.
Learn more about other multi-level marketing companies from I Buy I Review
I Buy I Review is your No. 1 source of information about multi-level marketing training programs, MLM companies and career opportunities. We buy training programs and review them to determine whether they are a good value or not.
Learn more about the MLM industry and check out our blog articles to find information on other companies and various training courses.