paint-brush
Amway: Pyramid Scheme or Legitimate Business Opportunity?by@marcusleary
70,621 reads
70,621 reads

Amway: Pyramid Scheme or Legitimate Business Opportunity?

by Marcus LearyOctober 19th, 2023
Read on Terminal Reader
Read this story w/o Javascript

Too Long; Didn't Read

Yes, it’s possible for you to make money with Amway if you manage to outperform your peers and land in the top 1%. The odds of that happening, however, are so low it’s really not worth trying. No, Amway is not a pyramid scheme, but it is multi-level marketing and and it does sell actual products. When it comes to using Amway as a way to supplement your income, it’s just another scam.
featured image - Amway: Pyramid Scheme or Legitimate Business Opportunity?
Marcus Leary HackerNoon profile picture

Let me guess. A friend just told you about a business opportunity that will “change your life forever,” right? It just takes $100 dollars to start, and you’ll make more money than you’ve ever made in your life, right?


Your friend told you about Amway, didn’t they?


In general, it’s best not to trust anything that sounds too good to be true. But Amway feels different, doesn’t it? How could a company with so much success be a scam?


Let’s deep dive into what Amway is, how it operates, and whether or not Amway is a pyramid scheme.

What is Amway?

First of all, it’s important to establish that Amway is not a fake business designed to take your money. Amway is a legit company that makes billions of dollars a year and is known worldwide.


The company also has an A+ rating with the Better Business Bureau (although many of the reviews are from Amway members).


Well, Amway is not a pyramid scheme. It utilizes multi-level marketing.


Which is just as bad.

What’s the Difference Between a Pyramid Scheme and Multi-level Marketing?

Imagine you start a club and ask five of your friends to join. You then require each one of your friends to pay you to become a part of the club.


You then encourage your five friends to recruit five more friends each and collect money from them. The cycle continues, with everyone at each level recruiting more people, siphoning money from those below them.


These types of schemes are not sustainable as they rely on constant recruitment of new members and more empty promises to get people on board. As the pyramid grows, it becomes harder to find new recruits and eventually falls apart, leaving most of the people involved with nothing to show for it.


Multi-level marketing is essentially the same business model, except this time, there’s an actual product involved. The sales that are earned from the products sold by the MLM keep the scheme funded, allowing it to stay afloat much longer than the typical pyramid scheme. However, the earning structure is the same.


The more people you bring into the MLM, the more money you can make. This is because, usually, you will take a percentage cut off the sales of all the people you bring in, as would the people above you who brought you in.


But at the end of the day, all the real money in an MLM is at the top, and by the time you join one, it’s too late to get in on the action. What makes multi-level marketing even more insidious is that it’s often a friend or family member that you trust that gets you in.


How Amway Defends Itself

So many people have accused Amway of being a pyramid scheme that the company had to defend itself on its website.


In the lengthy blog post, Amway starts off with the truth, explaining how the company is not considered a pyramid scheme because it sells real quality products and how the company has been around forever. The blog also mentions how the company has expanded worldwide and how it makes its own products using certified organic farmlands.


Picture

The blog stops telling the truth under the “How does Amway Work?” section.


This section goes into detail about how IBOs can make money by selling Amway products at a markup and how bonuses are given out based on sales volume.


The post completely leaves out the multi-level marketing aspects of working for the company.


How Amway Really Works

Amway works like every other multi-level marketing “opportunity.” In fact, many people have credited Amway as being the first MLM ever created.


Here’s how it works:

  1. You have to pay Amway $100 to join. Sounds like a small price to pay, and it’s not a big deal for such a “great opportunity.”
  2. You then become an Independent Business Owner (IBO), and you’re told to promote Amway products to every friend and family member you have.
  3. You’re told that you can make even more money enlisting your friends and family members in your “downline.”
  4. As an IBO, Amway will force you to replace all of your normal cleaning and beauty products with Amway products. Amway’s products are usually much more expensive, and if you don’t buy enough per month, you get kicked out of the club.
  5. The people in your “upline” make you buy expensive “Business Support Materials (BSMs)” to help you develop a “better business mindset.”
  6. This process continues infinitum until you run out of money or become one of the few people who actually make a few bucks.

Is Amway A Cult?

The question isn’t as silly as it may sound.


Many ex-Amway members have stated that they felt like they were surrounded by cult members at meetings, brainwashing them with pro-Amway lingo and propaganda. Some former Amway members have posted online about the most common cult tactics used within these groups.


Some of these common cult tactics include isolating you from friends, family, and others who might talk you out of sticking with the company. Amway members may also present a future in the company as a way of “saving” you from getting a real job, and Amway meetings are often in the middle of the night, which may be an attempt to keep you sleep-deprived, another common cult tactic.


Amway tends to target the same type of people that cults do:

  • Depressed people who want to feel better about themselves as fast as possible.
  • Lonely people, looking for friends.
  • Bored people who need something to do.
  • Opened-minded college students without the experience to recognize red flags.
  • People who feel spiritually unfulfilled.


To be fair, there’s no proof that Amway is telling its members to act like a cult. The cult-like feel is most likely due to the environment fostered by some of the key members of the organization that trickles down to the rest of its members. Basically, the members in the “downline” are just  mirroring the cult-like tactics in their “uplines.”

How Much Money Can You Make With Amway?

So, how much money can you actually make with Amway?


First, take a quick look at how Amway structures its “achievement levels.”

Picture


Don’t feel bad if none of that made sense. The whole system is designed to confuse you, so you don’t understand how badly you’re being worked over.


Basically, if you’re at the top of this strange S-shaped system, you’re making a good amount of money with the company. The top 1% of IBOs make around $80,000 per year.


If you’re anywhere in the middle of the list or below, you’ll be lucky to make more than two hundred dollars a month. That’s the number that Amway itself tells its IBOs to expect while while making their way up the ladder. At least the company is being honest, I guess.


Many IBOs spend more money on the Amway products they’re forced to buy every month than making money in their downline.


Actual Amway Testimonials

If you talk with an Amway member in person, they’ll swear up and down that starting your own business with the company is both fun and lucrative. However, it’s rare to find people online who would say the same.


The closest video I can find is this one, which starts off somewhat negatively, then starts to praise the company:

But if you search for Amway reviews on YouTube, you’ll be hit plenty of videos telling you to stay as far away from the company as possible:

With so many negative reviews, it’s hard to imagine that joining Amway is a good idea.


Final Thoughts: Amway Isn’t a Pyramid Scheme, but it Can be Just as Bad


Yes, it’s possible for you to make money with Amway if you manage to outperform your peers and land in the top 1%. The odds of that happening, however, are so low it’s really not worth trying.


No, Amway is not a pyramid scheme, and it does sell actual products.

But when it comes to using Amway as a way to supplement your income, it’s just another scam.


Amway’s not the only scam to look out for on the internet. Here are a few more schemes to look out for: