Amway (dun dun dun)

Victor Frost

Posted By: KilarneyPosted By: SonicBecause I'm an Amway distributor

This is deserving of its own thread.
Okay, here is what I know about Amway. Or what I think I know. Take this with a grain of salt as it may not be entirely accurate.

Either someone you know sponsors you into the business or you can visit the website and it will put you in touch with someone to bring you in. When you enter the business, you become an IBO or Independent Business Owner. You are given a customizable online storefront and a bunch of other stuff I can't be bothered to remember.

If you are in the business, you can rise up in one of two ways:

A. Buy products, which earn you PV/BV. This is the harder of the two, but doable if you replace every product you use with something from Amway or its partners.

B. Buy products as well as Sponsor people and have them buy products and sponsor more people. You are those peoples "upline". This is what is taught and how its usually done

When you join, you might be encouraged to subscribe to the weekly set of CDs; one motivational, one story, and one ISO CD. These are mostly recordings of the seminars of the more famous members of the business or uplines in your business. For example, if I were to get these cd's, I would likely get CD's of Ken Gaub, Dexter Yager (Way up there), Jim Agard (my parent's upline's upline) or maybe even Steve Whiteacre (my parent's upline).

You rise a level when you maintain a certain amount of PV/BV for three months. Every level gets you a rewards check for some amount that is a percentage of your BV. I can't remember if the check is annual or monthly. Oh, and you have to keep that level or higher or else you'll drop back down. There is a grace period, though.

If you don't give a damn about rising up in the business, there is the other way of being in the business, which is just being a retailer/customer. Quote Amway Wiki (unofficial):

The simplest method of generating an income is to buy products from Amway at their base wholesale price, add a markup, and sell them directly to a consumer. In general, Amway Business Owners (ABO) have the right to sell Amway-sourced products at whichever price they choose. The recommended markup on Amway manufactured products varies from 20-35%. In many markets Amway also makes available products from third-party manufacturers. The potential retail markup on these "catalogue" products is usually limited however, and they are generally made available for the personal convenience of Amway business owners rather than for resale. There are a number of exceptions to this, including XS Energy drinks and Emma Page Jewellery.

I generally do it that way and pretty much buy the stuff for myself. Root Beer flavored XS, mmm...

There are rules about being a reseller, though. Like, there's one that basically says you can't stock a store with amway's stuff. I've been told the logic behind that is to prevent rich people from buying a ton of the stuff, putting them in a store with only a slight profit margin, and driving anyone else in the business nearby, well, out of business. There are exceptions: When I was trying to sell XS energy cans to bars and clubs, I had to tell them that they can't give people the cans but they could pour the drink into a cup.

I can't speak for the rest of the world, but here in the US, Amway is largely made up of Christian republicans. If you go to a meeting in the east coast, it will likely open or end with a prayer of some sort. If memory is correct, the ISO CDs (Inspirational Standing Order) you are encouraged to get are generally bible stories or stories of how "the faith" was instrumental in the readers success.

And thats pretty much all I know, If I remember anything else, I'll put it here. But, if I were you, I'd trust the Amway page on Wikipedia more.

Dr. Timo

There are better ways of making money on the side. Especially if you take into account accumulating a skill set other than just selling stuff.

chaosof99

Russel Glasser of the Atheist Experience once almost joined Amway. You can read his story here.

Amway is not just largely made up of Christian Republicans, but exclusively so in the people who have a say in the company. ALL of their campaign contributions go to republicans.

It is also a pretty evil pyramid scheme filled with religious nutjobs.

trogdor9

While not technically a scam, I see Amway and it just screams "here's a way to get fucked in the ass" regardless. Whenever I see these direct marketing things they seem like brilliant ways to alienate your friends and family.

Churba

While not technically a scam, I see Amway and it just screams "here's a way to get fucked in the ass" regardless. Whenever I see these direct marketing things they seem like brilliant ways to alienate your friends and family.

That depends - can you buy direct from the company, or do you have to go through another distributor to get your stuff?

Victor Frost

That article by that atheist guy is out of date. You can buy direct, but if you buy something, your upline gets a bit of PV.

It is also a pretty evil pyramid scheme filled with religious nutjobs.

Pyramid Scheme, no. Filled with religious nut jobs, um, kinda. At least back east it was. I haven't been to any seminars over here because my parent's upline's don't have many other legs out here.

lackofcheese

It is also a pretty evil pyramid scheme filled with religious nutjobs.

Pyramid Scheme, no. Filled with religious nut jobs, um, kinda. At least back east it was. I haven't been to any seminars over here because my parent's upline's don't have many other legs out here.

While not legally considered a pyramid scheme because it offers actual products, it shares many of the same traits, and still consists mostly of the exploitation of lower levels by higher levels.

Victor Frost

It is also a pretty evil pyramid scheme filled with religious nutjobs.

Pyramid Scheme, no. Filled with religious nut jobs, um, kinda. At least back east it was. I haven't been to any seminars over here because my parent's upline's don't have many other legs out here.

While not legally considered a pyramid scheme because it offers actual products, it shares many of the same traits, and still consists mostly of the exploitation of lower levels by higher levels.

Exploited? How do you mean?

Dr. Timo

Exploited? How do you mean?

If you want to move beyond the lowest tier (i.e. just selling stuff) all financial risk for recruitment, seminars, bulk purchases, etc. is carried by the person at the bottom. This is not how a normal company works and it exploits the aspirations of lower ranked persons to the benefit of those higher up the chain. All of this is fueled by exaggerated (if not blatantly false) promises of financial success.

lackofcheese

The higher-ups get paid bonuses based on the performance of those lower down, even though the only thing they did was recruit them. Consequently, the higher-ups are getting paid for work they essentially had nothing to do with, while (from what I've read) the lower tiers make little money, and sometimes even lose money. This is clearly exploitation.
EDIT: Timo's explanation is perhaps better. In particular, the unreasonable allocation of risk is an important factor.

I'm not sure how reliable it is, but this seems like a good article:
http://www.skepdic.com/amway.html

Luke Burrage

From the awesome Skeptoid:

So this raises the question: How often does it work out that way? How many MLM participants ever recover their own investments?

* The Federal Trade Commission cautions "Most [network marketers] end up with nothing to show for their money except the expensive products or marketing materials they're pressured to buy."

* Consumer Reports advises "Stay away from multilevel marketing schemes that make earnings contingent on your ability to sign up an ever-growing pyramid of 'distributors' who are supposed to do the same and pass sales commissions up the line."

* The nonprofit Consumer Awareness Institute analyzed available data published by the MLM companies themselves. Of the companies surveyed, they reported the least successful was Amway/Quixtar where 99.99% of distributors lose money, and the most successful was Herbalife, where 99.42% of distributors lose money.

* They also surveyed 200 tax preparers in three counties in Idaho and Utah, where 6% of residents are active network marketing participants. From over 300,000 tax returns, not a single one reported significant profits from network marketing activities.

* In a Wisconsin lawsuit, the tax returns of the top 200 of 20,000 network marketing participants were examined by the Attorney General. The average income of this top 1% was -$900.

* Newsweek found that fewer than 1% of MonaVie distributors ever qualified for any commission at all, and less than 1 in 1,000 recovered the cost of their required monthly purchases.

So, if you're in the top 0.01-0.05%, you make money, but on average only $900 per year.

I say get a real job.

PS. My parents were stung by Amway when I was a child. It really is like asking your bank account to be plundered for the good of others further up the pyramid.

Nuri

While not technically a scam, I see Amway and it just screams "here's a way to get fucked in the ass" regardless. Whenever I see these direct marketing things they seem like brilliant ways to alienate your friends and family.

So true. I had a friend that got involved in Amway and constantly pressured my parents and me to join up. It eventually got irritating enough that I stopped talking to him and cut him out of my life.

MrRoboto

While not technically a scam, I see Amway and it just screams "here's a way to get fucked in the ass" regardless. Whenever I see these direct marketing things they seem like brilliant ways to alienate your friends and family.

So true. I had a friend that got involved in Amway and constantly pressured my parents and me to join up. It eventually got irritating enough that I stopped talking to him and cut him out of my life.

I've lost a couple of friends to Herbalife in the same manner as well.

Apreche

I've lost a couple of friends to Herbalife in the same manner as well.

Oh yeah, I see that one all over the city.

How do people get away with this stuff? They do something that is so obviously illegal and scammy, yet they are able to loophole their way out of actually getting in trouble. FTC just needs to put all these people in jail, forever.

WindUpBird

Reading Sonic's breakdown of Amway levels and practices reminded me of the first time I read a Scientology documents, with all of its acronyms, lingo, and description of moving up in "operating thetan levels." It's pretty cultlike, especially that stuff about "motivational and inspirational speeches" from the higher-ups.

Churba

So, if you're in the top 0.01-0.05% Of distributors, you make money, but on average only $900 per year.

Because the actual top 0.01 percent are the ones running and actually employed by the company, and they are not exactly going wanting.

Luke Burrage

I listened to an interview with an ex-Amway distributor who said he made all his money on selling motivational books and tapes and seminars, and none by selling produce.

Starfox

How do people get away with this stuff? They do something that is so obviously illegal and scammy, yet they are able to loophole their way out of actually getting in trouble. FTC just needs to put all these people in jail, forever.

Pragmatic Rationalist party to the rescue?

Sail

Pragmatic Rationalist party to the rescue.

Victor Frost

Reading Sonic's breakdown of Amway levels and practices reminded me of the first time I read a Scientology documents, with all of its acronyms, lingo, and description of moving up in "operating thetan levels." It's pretty cultlike, especially that stuff about "motivational and inspirational speeches" from the higher-ups.

*sigh* Yep. They do share similarities, although they aren't a crazy cult. Still, the seminars are often boring. And, truth be told, My parent's have been in the business for, well, longer than I've been alive, and they haven't had much luck with it. Though they did really well at one point when I was really young, but then one of their legs left the business and took his whole family with him. Anyhow, Like I said, I don't do the MLM part of it. I pretty much use it only for discounts at partners stores.

Churba

I actually knew one family, back when I was about 14, I was dating this ballerina girl named Kate, and her family was doing really, really, really well on it, along with their other ventures, but it collapsed on them, and the whole thing ended up with them losing their house, cars, the lot. Quite sad, really.

Jason

Pragmatic Rationalist party to the rescue?

I doubt it. Scrym's mantra has always been to let 10 guilty men go free to protect one innocent man. They would hardly be the ones to use fascism to control things they don't like in the name of freedom, would they? Would they?

Nuri

How do people get away with this stuff? They do something that is so obviously illegal and scammy, yet they are able to loophole their way out of actually getting in trouble. FTC just needs to put all these people in jail, forever.

Could you please elaborate on how it is obviously illegal?

It's also not a scam; they tell you up front what you have to do to make money. They don't lie to you about their crappy system. If you chose to take it on, then that's your problem. There isn't really any misrepresentation going on. All the information you need about the company is available.

Churba

It's also not a scam; they tell you up front what you have to do to make money. They don't lie to you about their crappy system.

Correction - the COMPANY doesn't lie to you. I've had multiple distributors try to recruit me, and every time, it's different numbers, and the only reason I wouldn't call it a barefaced lie is that these people seemed to wholeheartedly believe it.

Nuri

It's also not a scam; they tell you up front what you have to do to make money. They don't lie to you about their crappy system.

Correction - the COMPANY doesn't lie to you. I've had multiple distributors try to recruit me, and every time, it's different numbers, and the only reason I wouldn't call it a barefaced lie is that these people seemed to wholeheartedly believe it.

Okay, the fact that anybody can join and become a recruiter does mean that you can't take all the information you get from them at face value. How is that any different from a salesman in any other field? When car salesmen tell you about a car, they're generally not going to give you the negatives or the low end of the range unless you know what to ask...it's up to you to do the research and know what you're buying. Same here. Generally, a failure to lay out information that is easily available through other channels is not considered fraud. It's more of a buyer beware situation. The numbers they give you are considered estimates, so they're not legally binding. They aren't actually concealing information from you, as the ample information posted in this thread has demonstrated. Most credit card offers are more misleading than the Amway rep presentations I've seen.

Victor Frost

It's also not a scam; they tell you up front what you have to do to make money. They don't lie to you about their crappy system.

Correction - the COMPANY doesn't lie to you. I've had multiple distributors try to recruit me, and every time, it's different numbers, and the only reason I wouldn't call it a barefaced lie is that these people seemed to wholeheartedly believe it.

Okay, the fact that anybody can join and become a recruiter does mean that you can't take all the information you get from them at face value. How is that any different from a salesman in any other field? When car salesmen tell you about a car, he's generally not going to give you the negatives or the low end of the range unless you know what to ask...it's up to you to do the research and know what you're buying. Same here. Generally, a failure to lay out information that is easily available through other channels is not considered fraud. It's more of a buyer beware situation. The numbers they give you are considered estimates, so they're not legally binding. They aren't actually concealing information from you, as the ample information posted in this thread has demonstrated. Most credit card offers are more misleading than the Amway rep presentations I've seen.

True, very true. Besides, any pamphlets, audio tapes, or DVD's we give out have to be approved by corporate anyways. So what ever numbers are on those are what matter.

Cremlian

Damn it, I go skiing for a weekend and someone creates an Amway thread!!! Now I have to read and wonder if my points have been brought up :-p

MrRoboto

Now that you mention scams, anyone here heard of Lockerz.com?

Churba

Now that you mention scams, anyone here heard of Lockerz.com?

How is this a scam? The marketing video was too painful to watch all the way through, and there was no way I was putting my details into that crap.

MrRoboto

Now that you mention scams, anyone here heard of Lockerz.com?

How is this a scam? The marketing video was too painful to watch all the way through, and there was no way I was putting my details into that crap.

Dunno, some friends signed up for some reason and tried to convince me that it wasn't a scam, that it was legit, all they had to prove that it was legit was a (probably fake) "Un-boxing video". They said that at least they didn't ask for any credit or personal info, just an e-mail and shipping address to send the prizes, I expect they will only receive spam and junk mail.

Nuri

I expect they will only receive spam and junk mail.

Everyone's a winner!