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  #1  
Old 02-28-2006, 12:13 PM
kapitagune kapitagune is offline
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Amway

Lurker signing in. Wow, it feels very... exciting to post

Now, my family was recently introduced to Amway. It sounded like a pyramid scheme at first but from what I can find, it's not quite that... illegal. Still, sounds very suspicious (and I haven't really been able to find a clear description of what participation in it would entail, either).

What is the Straight Dope on Amway?


Oh yes, in case it matters, I should mention I live in Estonia (Eastern Europe).
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  #2  
Old 02-28-2006, 12:24 PM
BobLibDem BobLibDem is offline
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Look up multi-level marketing. This article
sums it up well.

Quote:
For every MLM distributor who makes a decent living or even a decent supplemental income, there are at least ten who do little more than buy products and promotional materials, costing them much more than they will ever earn as an MLM agent. The most successful MLM scheme is Amway. It has millions of distributors worldwide with sales in the billions. At the turn of the century, the average Amway distributor earned about $700 a year in sales, but spent about $1,000 a year on Amway products. Distributors also have other expenses related to the business, e.g., telephone, gas, motivational meetings, and publicity material
Amway's scruples are dubious at best. They got into hot water with Revenue Canada on a scheme to defraud the Canadian government, as outlined here.

Also of interest, Amway executive Rich DeVos is running for governor of Michigan. Just what the state needs.
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Old 02-28-2006, 12:34 PM
FatBaldGuy FatBaldGuy is offline
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Amway, at least in the US, is not illegal. It is not a pure pyramid scheme, but is known as Multi-Level Marketing (MLM).

The general concept is that not only do you sell the products to your friends and neighbors, but you also try to recruit them to sell. The people you recruit work under you, and you get a percentage of everything they sell. Of course, those people are also recruiting people under them, and you get a percentage of that, as well.

This may be venturing out of GQ into IMHO, but if the products are as good as they claim, it seems that they could just market them in retail stores at a lower price because they would not have to pay 5 or 6 levels of commission on every item sold.
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Old 02-28-2006, 12:36 PM
AskNott AskNott is offline
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Amway is legal, at least the form we have in the US. However, it won't deliver everything it promises. In order to make any serious money, you have to become a wholesaler to several retail dealers, who also hope to become wholesalers, and so on.

I don't know the technical definition of a pyramid scheme. Amway does sell an actual product, and that sets it apart from some pyramid scams that sell only promises.
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Old 02-28-2006, 12:41 PM
Rico Rico is offline
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Check this out.

Also note that Amway has tried to re-invent itself as Quixtar. Don't be fooled.
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  #6  
Old 02-28-2006, 01:28 PM
Sunspace Sunspace is online now
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Welcome, kapitagune!

I am dismayed to find that Amway has made it to Estonia. As others have said, Amway is not quite a fraud--there's an actual product being sold--but its promotion tends to be... economical... with the truth.

Years ago a co-worker invited me to a presentation. He had just left the company inder strained circumstances (politics between founders led to a split). He did not say what the presentation was, just that it was a 'great business oppurtunity'. I, naively, thought that it was going tlo be about the new company he and the other former co-workers were founding.

We went to a hotel, and entered a conference room. No engineering positions in sight; it was all marketing blather about building enthusiasm and reducing critical thought. They showed us books illustrating the wonderful lifestyles we could have if we got enough people selling in our 'downlines'. (Downlines were the chains of people we would recruit as salespeople, and who themselves would recruit more people.)

The rewards were all about getting mansions and fancy cars and RVs and such, but it all had a kind of Las Vegas glitz that was as much about appearance as about actual solid foundations of wealth.

My impression was that it was simply not possible to achieve great wealth, or even modest success, through selling the company's products. You had to recruit people into your downline so that they would also sell, and in the process add to your take. And they had to do the same.

But the way my co-worker would not tell me what the 'amazing business oppurtunity' actually was before we went there left a bad taste in my mouth. It was like reading those ads stapled to telephone poles, the ads that say "Make up to $3000 a week working at home!" and just give a phone number, but leave out what you would actually be doing and what you would have to invest in the process.

Wikipedia on Amway: http://en.wikipedia.org/wiki/Amway
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  #7  
Old 02-28-2006, 02:23 PM
Antinor01 Antinor01 is online now
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Amwy itself, as a company isn't totally bad. Most of the problems are in the large groups (the biggest is headed by Dexter Yeager, with about 70% of the business going through his group last I heard). They do make some decent products, but the way it's marketed leaves a lot to be desired.
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Old 02-28-2006, 02:34 PM
A.R. Cane A.R. Cane is offline
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Fastest way I know to alienate all your friends and relatives. My stepmother (Dad remarried in his late 50's after my Mother died) was one of those who spent more than she made. IMHO Amway dealers are significantly below used car salespeople on the social ladder.
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  #9  
Old 02-28-2006, 02:53 PM
DrDeth DrDeth is offline
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The only way to make real money selling Amway is to not sell the actual product but to sell the sales. In other words, those that make big bux in Amway are promoters, not salesmen.

Some few dudes who got in very early are an execption, they make theirs from "downline".

The whole thing is nearly a Fundie religion, and in fact in some regions IS linked to Fundie Xtianity.

It's scary, and when you really get down to it- it's a scam. I suppose that if you were the first person to break into the China market, you could make it big.
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Old 02-28-2006, 02:54 PM
What Exit? What Exit? is offline
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Quote:
Originally Posted by A.R. Cane
Fastest way I know to alienate all your friends and relatives. My stepmother (Dad remarried in his late 50's after my Mother died) was one of those who spent more than she made. IMHO Amway dealers are significantly below used car salespeople on the social ladder.
I can't add much accept to say that I agree with A.R.Cane. We lost a pair of friends to a scheme like this. They need to get people to sign up under them and socially they didn't know how to turn off the sales pitch and we stopped seeing them.

Jim
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Old 02-28-2006, 03:01 PM
Daithi Lacha Daithi Lacha is offline
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What do they sell, anyway? I gave a taxi ride home to a guy who tried to pitch the Amway spiel to me ("Think of the opportunities -- you could sell to all your fares!"), and when he opened his garage door, it looked like it was stocked to the ceiling with boxes of washing powder, all labelled "AMWAY." I didn't bother asking.
Lousy tipper, too. Obviously raking it in.
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  #12  
Old 02-28-2006, 03:16 PM
kapitagune kapitagune is offline
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Very informative answers, many thanks

Indeed, the operation is pretty shady and secretive. It took us a few weeks to find out that it was actually Amway we were dealing with.

Quote:
The only way to make real money selling Amway is to not sell the actual product but to sell the sales.
By that do you mean that to make money, you have to recruit lots of sellers?


Some friends of the family seem pretty into this thing. I would like to stop them before it is too late (they're just starting). What would be the best arguments with which to convince them? I fear the "promised goldmine" might cause them to see any claims to the contrary as false and misleading... especially due to the "some people might actually earn money" part, even though that "some" is very very very few clever/lucky ones.

Assuming someone joins and never buys or sells any products but just recruits 15 people. How much would he earn from his... was it called "downline"? Let's assume all the lower-level people sell $50 worth of products per week on average.

I'd like to get some nice examples of approximately how much someone would earn/lose. I think this might help convince our friends to stay off the scheme.
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Old 02-28-2006, 03:27 PM
Airman Doors, USAF Airman Doors, USAF is offline
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The biggest problem with Amway/Quixtar is that they get their claws into you in the beginning with upfront costs (motivational stuff, seminars, that type of thing) and so your average person will try to move Heaven and Earth to at least get their money back. After all, how hard can it be, right? There are people making millions doing this.

It's called throwing good money after bad, and it's the same impulse that won't let problem gamblers walk away from the craps table. They just know, deep down in their hearts, that the next toss will solve all their problems, even though every statistical analysis known to man virtually guarantees that it won't.

That's Amway. A fool's bet. And woe betide anybody who says that in front of a true believer. They will lose their shirts before they will admit that they were fools. Just like alcoholics, drug addicts, and gamblers, they just know.
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Old 02-28-2006, 03:33 PM
A.R. Cane A.R. Cane is offline
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Quote:
Originally Posted by kapitagune
Very informative answers, many thanks

Indeed, the operation is pretty shady and secretive. It took us a few weeks to find out that it was actually Amway we were dealing with.



By that do you mean that to make money, you have to recruit lots of sellers?


Some friends of the family seem pretty into this thing. I would like to stop them before it is too late (they're just starting). What would be the best arguments with which to convince them? I fear the "promised goldmine" might cause them to see any claims to the contrary as false and misleading... especially due to the "some people might actually earn money" part, even though that "some" is very very very few clever/lucky ones.

Assuming someone joins and never buys or sells any products but just recruits 15 people. How much would he earn from his... was it called "downline"? Let's assume all the lower-level people sell $50 worth of products per week on average.

I'd like to get some nice examples of approximately how much someone would earn/lose. I think this might help
convince our friends to stay off the scheme.
Yes, you make very little actually selling the product, compared w/ the potential of your "downline".
If I remember correctly, and I'm pretty sure I do, you must buy a minimum amount of products each month to maintain your status as a rep. There are also promotional/motivational materials that you are pressured to buy.
It's pretty hard to convince someone who has bought into the original sales pitch, they are given frequent motivational pep talks and if they mention that someone is trying to disuade them there are pitches to overcome that. You will be painted as a pessimist who's trying to steal their dream.
They are very hardcore and very, very persuasive. It often takes years before people give up and even then they often feel like they failed because they didn't believe strongly enough. As DrDeth said, it's very much like a fundamentalist religion.
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  #15  
Old 02-28-2006, 04:11 PM
teela brown teela brown is offline
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I've known two couples in my life who were into selling Amway, and they were all fundies. I tried to gently suggest to the last couple that Amway was almost a scam, but the wife got all shirty with me and seldom spoke to me afterwards.
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  #16  
Old 02-28-2006, 04:16 PM
Gary T Gary T is online now
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Quote:
Originally Posted by kapitagune
Assuming someone joins and never buys or sells any products but just recruits 15 people.
I don't think it's realistic to assume an Amway distributor won't buy any products. It probably is realistic to assume they won't sell much, if any. But what's really a stretch is assuming they'll recruit 15 people, especially 15 people who will sell enough to generate any net income.

Here in the U.S., where Amway is pretty well known, just recruiting 3 people is a monumental challenge in most communities. It might be easier in an area where Amway is not well known - for a while. Eventually the word will spread that virtually no one makes any money doing this, and then it will be hard.

I'm sorry I can't help with the figures you asked about, but I have observed people trying Amway and other MLM plans for decades now, and precious few - very, very, few - break even, much less profit from it. When you figure in the time, stress, alienated family, and lost friends, the miniscule chance of making some money is simply not worth it. Playing the lottery is a better bet.
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  #17  
Old 02-28-2006, 04:22 PM
alice_in_wonderland alice_in_wonderland is offline
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Way back in the '70's, Amway was somewhat legitamate- you actually made $4 by selling the products, which were pretty good.

My parents did it for a while and were never made to recruit anyone - more like Avon or somesuch.

Now it seems to be a cult type organization. My brother and his wife bumped into one of his old school chums who invited the pair of them to dinner with his wife. When Bro and SIL got there, it was an Amway recrutiment deal, and there was no food.

Feckers.
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  #18  
Old 02-28-2006, 04:34 PM
mlerose mlerose is offline
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Quote:
Originally Posted by DrDeth

It's scary, and when you really get down to it- it's a scam. I suppose that if you were the first person to break into the China market, you could make it big.
Too late; there's a huge building with an enormous flashy Amway sign on the main drag in Xi'an, China.
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Old 02-28-2006, 04:46 PM
Antinor01 Antinor01 is online now
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Last time I saw amway materials, it noted that on average, amway sales people made $240 a year. (or somewhere thereabouts). That's NOT counting the promotional, motivational etc items you buy from your upline since those are not produced by Amway but rather by the sales group. That figure may have changed, but they are legally required to notate it.

Russell
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  #20  
Old 02-28-2006, 04:54 PM
Cunctator Cunctator is offline
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I bought some products from a friend of mine who got involved with Amway a few years ago. I don't know how well he did out of it. Personally, I thought that the stuff I bought from him (cleaning stuff, detergents) was way over-priced and not particularly effective.
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  #21  
Old 02-28-2006, 05:12 PM
Agonist Agonist is offline
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Former Amway person checking in here.

In my group (and there are many, many different styles), the principle was to buy the stuff yourself, and use the "profit" from buying wholesale to fund your sales business. I doubt we ever ran enough of a profit from our sales (and our small downline) to cover our expenses, but theoretically it could be done. I really think people are putting way too much rumor and opinion into a GQ thread here.

To answer some specific questions:

Q) What does Amway sell?
A) Just about everything, but their initial, and IMHO highest quality, products are their soaps. Laundry detergent, household cleaners, dish detergent, shampoos, etc. They concentrate on household goods, because a large part of the business plan is to convert your everyday purchases to Amway products.

Q) Do you make money from recruiting or from selling products?
A) Both, of course. You make a small percentage from what is sold by people in your "downline" (those you recruit and those they recruit) but if nobody is selling any product, then nobody is making any money. Our group always had a strong emphasis on direct sales as well as recruitment. Of course, the people making very big money are the ones with large downlines - 1% of a lot of people's work is better than 100% of one person's.

Q) Do they promise more than they deliver?
A) Technically, legally, no. Amway has strict rules on what you say when you show "The Plan", and its example promises a very moderate income of, if I recall, about $2000 per month. Of course, you always followed up with examples of billionaires and people living the highlife on Amway income, but you had to show people the true stats, which showed average income (as quoted in one of the first responses) as well. Really, I think Amway is as good as Avon or Pampered Chef or any of the other direct sales organizations for creating a small part-time income. And the billionaire thing can legitimately happen, it just takes a certain skill set and a lot of luck.

Q) Are they unethical?
A) That depends on who you're involved with and who you're talking about. I think that Amway, the company, is ethical and makes good products. I'd never vote for Rich deVoss for anything, but I don't agree with his politics. I think that for a far-right political conservative, he's an ethical person (as in he's true to his own beliefs). The company makes good, environmentally sound products, and is very quick to offer 100% refunds on anything someone is unhappy about. As a manufacturer, I consider them to be one of the best.

The problem is that the distributions system leaves no quality control in who gets to represent Amway. Since anyone can join, and get-rich-quick methods do work on the recruiting end, you can and do find a lot of scam artists and con men using Amway as their vehicle. I don't know how other MLMs control this, but it is a problem.

On the other hand, I found a lot of very ethical, moral people within my organization, and I think that a lot of the people within Amway are the same. They often tend to be "fundies", but that's not unethical, now is it?

Q) If the products are so good, why don't they sell them in the store, like normal companies?
A) Basically, the company started as a door-to-door kind of model, and grew from there. Their business model today is direct sales. If they sold their products in the stores as well, then the direct sales reps would be competing with Target and KMart. The majority of Amway's end-user customers are also distributors, and they don't want to do anything that would cause all those distributors to quit, so they don't sell their products in stores.

Q) Are the a front for (religious/political/terrorist) groups?
A) Obviously not, but a lot of people don't like Amway because they don't like their politics/religious bent. For some reason, a lot of distributors and Amway leadership are fundamentalist christians/right-wing conservatives. In my group, weekend promotional events always included an optional "non-denominational" church service. I was not even Christian, but I usually went to these events - they tended to be fun, you got to hear people you respected speak... I'm not sure why I went, but I don't really regret it. And, I should stress, I was never pressured to go by my upline. Still, it would definitely have been a more comfortable experience socially if I had been a conservative baptist.

Q) Is it a scam?
A) Not necessarily, but it can be. It can also be a good second income. It depends on who you learn from and how you do it.
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  #22  
Old 02-28-2006, 05:17 PM
Gary T Gary T is online now
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Quote:
Originally Posted by Antinor01
Last time I saw amway materials, it noted that on average, amway sales people made $240 a year.
And that average probably reflects one person making 235,000; two making 1,000; four making 500; and nine hundred ninety-three making about 1 each - all before expenses.
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  #23  
Old 02-28-2006, 08:50 PM
Fear Itself Fear Itself is online now
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Originally Posted by mlerose
Too late; there's a huge building with an enormous flashy Amway sign on the main drag in Xi'an, China.
And Russia is hopping on the bandwagon too!!
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  #24  
Old 02-28-2006, 09:17 PM
Princhester Princhester is offline
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Quote:
Originally Posted by Agonist
Q) If the products are so good, why don't they sell them in the store, like normal companies?
A) Basically, the company started as a door-to-door kind of model, and grew from there. Their business model today is direct sales. If they sold their products in the stores as well, then the direct sales reps would be competing with Target and KMart. The majority of Amway's end-user customers are also distributors, and they don't want to do anything that would cause all those distributors to quit, so they don't sell their products in stores.
This doesn't make any sense. Amway has a good product (you say) but they choose not to reap the massive rewards of selling a good product to the mass market and instead limit their sales to a comparatively tiny market segment so as not to lose that segment.

Another possible explanation for Amway's refusal to sell in normal stores is that they are attempting to sell mediocre products at inflated prices. That would, of course, be impossible in the mass market. It is however possible with a careful, targetted, high pressure sales strategy.

After all, you can't fool all of the people all of the time, but ...
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Old 02-28-2006, 11:04 PM
Agonist Agonist is offline
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Quote:
Originally Posted by Princhester
Another possible explanation for Amway's refusal to sell in normal stores is that they are attempting to sell mediocre products at inflated prices.
Well, I don't have any I don't have any stats to back up my statement, so I can't prove it one way or the other. I still maintain the products are high quality, but that's more or less an opinion, too.

Does anyone know of a successful door-to-door or MLM company that went to standard store retail and still survived? I can't think of any, and that suggests that it's not just product quality that determines retail success.
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Old 02-28-2006, 11:16 PM
Ferret Herder Ferret Herder is online now
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Quote:
Originally Posted by Agonist
Does anyone know of a successful door-to-door or MLM company that went to standard store retail and still survived? I can't think of any, and that suggests that it's not just product quality that determines retail success.
Not quite the same thing, but I know that both Avon and Tupperware sell via retail outlets in addition to their door-to-door type sales. In fact, I've seen Avon selling both via mall kiosks and through a department store, though I can't recall which one off the top of my head.
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Old 02-28-2006, 11:27 PM
Princhester Princhester is offline
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Agonist read the links provided by Rico in this thread. Amway products when objectively comparison tested are found to be at best OK, and always waaay overpriced.
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Old 03-01-2006, 05:43 PM
handsomeharry handsomeharry is online now
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Quote:
Originally Posted by Princhester
Agonist read the links provided by Rico in this thread. Amway products when objectively comparison tested are found to be at best OK, and always waaay overpriced.
I remember in the 70s my 'friends' turned their amway guns on me. IIRC, the quality really was way above the others, with prices also extremely high, but the soap products were super concentrated, so, in the long run, the product was a better value. I think now that the quality of competitors' products have just improved substantially so the concentration factor is irrelevant and, consequently, the prices make the value much less.
hh
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Old 03-01-2006, 06:42 PM
pikolo77 pikolo77 is offline
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Quote:
Originally Posted by Agonist
Well, I don't have any I don't have any stats to back up my statement, so I can't prove it one way or the other. I still maintain the products are high quality, but that's more or less an opinion, too.

Does anyone know of a successful door-to-door or MLM company that went to standard store retail and still survived? I can't think of any, and that suggests that it's not just product quality that determines retail success.

My family has been involved over the years in several MLM schemes and most of the time, the MLMs usually have some product niche that makes them unique or distinguishes them in some way. It's tough to tell which products to buy and which are sold strictly for their margins because of the zealous nature of the marketing.

As far as going mainstream, think of the internet as being the leveler for the playing field. I buy a LOT of products from one specific sports nutrition company which is an MLM (though I do not sell). After the initial sales pitch, you go online and buy what you want, when you want. There's no commitment, no meetings, no calls to make, etc... It's hard to get more mainstream than that.
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Old 03-01-2006, 10:08 PM
Princhester Princhester is offline
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Quote:
Originally Posted by handsomeharry
I remember in the 70s my 'friends' turned their amway guns on me. IIRC, the quality really was way above the others
How do you know? Did you do some sort of test? This is not what those who have actually tested say.

Certainly, Amway tell their people to absolutely hammer the line that their products are extremely high quality. But of course, they would say that, wouldn't they?

Repetition makes "truth", no doubt.
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Old 03-01-2006, 10:42 PM
Sunspace Sunspace is online now
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Quote:
Originally Posted by Ferret Herder
Not quite the same thing, but I know that both Avon and Tupperware sell via retail outlets in addition to their door-to-door type sales. In fact, I've seen Avon selling both via mall kiosks and through a department store, though I can't recall which one off the top of my head.
Avon, Tupperware, Mary Kay, etc, may do direct door-to-door sales, but do they do multi-level sales?
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Old 03-02-2006, 08:48 AM
postcards postcards is offline
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Quote:
Originally Posted by Sunspace
Avon, Tupperware, Mary Kay, etc, may do direct door-to-door sales, but do they do multi-level sales?
Mary Kay is something of an MLM, in that you are encouraged to recruit others. By no means do you have to, though.

My wife has been selling MK for about five years now. At first she was pushing to recruit more salespeople, but soon realized that our area (NYC) isn't quite the fertile ground for that as other areas are. Nevertheless, the products are very good, and IIRC, one only need to order $200 worth of product every quarter in order to maintain one's status as a salesperson. That's $800 a year (wholesale; MK's markup is 50%.)

Mrs. P doesn't recruit anymore, but still has a decent enough customer base that she can make a few bucks every quarter, and get good products at a better price than, say, the Clinique counter. Plus she gets a regular commission check from MK for the seven or eight salespeople she did bring in.
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  #33  
Old 03-02-2006, 09:07 AM
Shirley Ujest Shirley Ujest is offline
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All home party based things are MLM's as far as I've looked into, which isn't very far because my BS meter pings frantically at one of those parties.
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  #34  
Old 03-02-2006, 09:40 AM
Avarie537 Avarie537 is offline
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Quote:
Originally Posted by postcards
Mary Kay is something of an MLM, in that you are encouraged to recruit others. By no means do you have to, though.

My wife has been selling MK for about five years now. At first she was pushing to recruit more salespeople, but soon realized that our area (NYC) isn't quite the fertile ground for that as other areas are. Nevertheless, the products are very good, and IIRC, one only need to order $200 worth of product every quarter in order to maintain one's status as a salesperson. That's $800 a year (wholesale; MK's markup is 50%.)

Mrs. P doesn't recruit anymore, but still has a decent enough customer base that she can make a few bucks every quarter, and get good products at a better price than, say, the Clinique counter. Plus she gets a regular commission check from MK for the seven or eight salespeople she did bring in.

As a Mary Kay consultant, let me add my two cents.

Mary Kay is not a MLM company. The heart of MLM is that the recruit buys their products from their recruiters, and that's one of the big ways that recruiters make their money. For instance:

Suzy is a Big Shot Sales Lady for Avon. She buys her eyeshadow from the company for $2. Her recruits buy the eyeshadow from her for $3 and then sell it to their customers for $4. But Big Shot can also sell directly to her customers for $4 as well.

Sally is a Sales Director for Mary Kay. She buys her eyeshadows from the company for $3.25 and sells it for $6.50 (or whatever she chooses to sell it for - $6.50 is the MSRP, basically). Her recruits buy their eyeshadows from the company for $3.25. It doesn't matter if you're a brand-new recruit or have been selling for 25 years - you make a 50% commission on whatever you sell. Now, if you choose to recruit, you will get commission checks from the company based on the number of recruits you have and how much they order. I have one recruit, therefor I get a check for 4% of what she ordered from the company every month. When I have more recruits, I will get either 9% or up to 13% from the company.

If Mrs. P chose to recruit a few more ladies, and was able to keep up consistent production of a certain level, she would be eligible to earn the use of a free car (a Pontiac Vibe). Now, since they live in NYC, she could choose the cash option instead (which I believe is approximately $350 per month).
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Old 03-02-2006, 10:12 AM
Gary T Gary T is online now
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Quote:
Originally Posted by postcards
...MK's markup is 50%.
[quote=Avarie537]She buys her eyeshadows from the company for $3.25 and sells it for $6.50 (...$6.50 is the MSRP...)....you make a 50% commission on whatever you sell.

Terminology nitpick: If Avarie537's figures are correct, then the markup is 100%. The discount (= margin, and in this case = commission) is 50%. You mark up the wholesale price to arrive at the retail price, you discount the retail price to arrive at the wholesale price. 3.25 + 100%x3.25 (i.e., 3.25 + 3.25) = 6.50; 6.50 - 50%x6.50 (i.e., 6.50 - 3.25) = 3.25.
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Old 03-02-2006, 10:42 AM
postcards postcards is offline
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Right, I was getting markup and discount confused. But I did say the commission checks come from MK. I also didn't directly call MK an MLM, just something of an MLM. Sorry for the confusion.

Does Avon really work the way you describe it, Avarie537? My mother was an Avon rep in the 1970's; all her stock was ordered direct from Avon, not her district manager. (And back then I believe the split was 60/40, with the rep getting the 60%. Of course, it's been over thirty years; I could have that backward.)
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  #37  
Old 03-02-2006, 10:50 AM
Antinor01 Antinor01 is online now
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Originally Posted by Princhester
How do you know? Did you do some sort of test? This is not what those who have actually tested say.

Certainly, Amway tell their people to absolutely hammer the line that their products are extremely high quality. But of course, they would say that, wouldn't they?

Repetition makes "truth", no doubt.
It's been a few years and other products may have gotten better, but I did see articles in consumer reports (can't find them right now, as I said it's been a while) that rated amway laundry soaps as one of the top brands on the market. (2nd overall I believe). If that is still true today I don't know, haven't talked to an amway person in a good 5 years.

Russell
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  #38  
Old 03-02-2006, 11:49 AM
CookingWithGas CookingWithGas is offline
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Originally Posted by AskNott
I don't know the technical definition of a pyramid scheme. Amway does sell an actual product, and that sets it apart from some pyramid scams that sell only promises.
And that's pretty much the technical definition of a pyramid scheme. You invest, getting nothing in return except for a promise (or something worth far less than what you pay). You get other people to invest, you get their money, they get other people to invest, until everybody has either refused to get in, or is in. The people at the top of the pyramid are the only ones who make money, which comes from the people at the bottom, who get screwed.

Have you seen those chain letters where you are supposed to send someone $1, but you get $20,000 back? That's a pyramid scheme. Amway is legal because you get "something" for your money. Another pyramid scheme that claims to be legal (but I don't think it is) is where you advertise how to make $x from home, then when you send you money in they send you a piece of paper that says: "Place an ad in the paper offering people to make $x from home. When they respond to the ad and send you their money, send them a copy of this page." Pyramid schemes are also called Ponzi schemes, named after a spectacularly successful con man.

I have had several brushes with Amway folks (and similar organizations like NuSkin) over the years. There is one thing that distinctly stands out in my mind. Every single time I have been approached by one of these people, they try to get me to become a rep but nobody has ever not even once tried to sell me an actual product. Today I do not know where I could buy an Amway product if my life depended on it.

The thing that I disliked about all these people was that they approached me socially and developed a friendship, and it quickly became clear that the "friendship" was just a front to try to sell me on being in their downline.
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  #39  
Old 03-02-2006, 12:15 PM
hajario hajario is offline
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I lost some good friends that way (a married couple). They had no interest in seeing me unless I wanted to hear their pitch. After refusing them like three times, Karen called me and told me that they knew that I wasn't interested in their home business but they were new at it and would I do them a favor and let them "practice" in front of us. Now they were treating me like an idiot and I was really insulted.

Several years ago, I was laid off from my job and Steve called me. He said that he was sorry that we had lost touch and wanted to offer me some support as a friend in my tough time......by having me go to this web site with a really cool idea for a new career.

I'm sure that there are plenty of reps who are ethical and upfront about what they are doing. Most, however, use deceit to get people to listen to their pitch.

That's why people are anti-Amway.
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  #40  
Old 03-02-2006, 05:44 PM
Princhester Princhester is offline
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Quote:
Originally Posted by Antinor01
It's been a few years and other products may have gotten better, but I did see articles in consumer reports (can't find them right now, as I said it's been a while) that rated amway laundry soaps as one of the top brands on the market. (2nd overall I believe). If that is still true today I don't know, haven't talked to an amway person in a good 5 years.

Russell
Well read this: http://www.cs.cmu.edu/~dst/Amway/AUS/cr.htm. I'm curious as to why you would regard talking "to an Amway person" as being relevant to the truth about their products.
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  #41  
Old 03-02-2006, 06:04 PM
Princhester Princhester is offline
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Originally Posted by CookingWithGas
I have had several brushes with Amway folks (and similar organizations like NuSkin) over the years. There is one thing that distinctly stands out in my mind. Every single time I have been approached by one of these people, they try to get me to become a rep but nobody has ever not even once tried to sell me an actual product. Today I do not know where I could buy an Amway product if my life depended on it.
In fact, leaving the cover story aside, Amway pretty much is a pyramid scheme. They sell products, but that's not what it's about. As you say, few people who are not Amway distributors buy their stuff. It's all about getting a pyramid under you, who will (in accordance with the rules) replace the products in their homes with Amway products. They will do this not because they are inspired by particular cleaning products but because they want to make money as a distributor ie by getting a pyramid under them.

If you read up from the links in this thread you will see that hardly anyone makes any money out of Amway and certainly not by selling product. Those that do, do so by recruiting people using the lie that they will make money, just like any other common or garden pyramid scheme. And further, making money in this way gets harder and harder in any given community, as word gets round that you can't make money out of it, and downlines become harder and harder to recruit. Saturation is reached. Just like any other pyramid scheme.





Which is
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  #42  
Old 03-02-2006, 09:42 PM
Green Bean Green Bean is offline
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Originally Posted by CookingWithGas
I have had several brushes with Amway folks...over the years. There is one thing that distinctly stands out in my mind. Every single time I have been approached by one of these people, they try to get me to become a rep but nobody has ever not even once tried to sell me an actual product. Today I do not know where I could buy an Amway product if my life depended on it.
This has been my experience as well.

In contrast, when I have been approached by sellers for Avon or Pampered Chef, they are trying to sell the product. They've shown me products and/or given me samples and/or given me a catalog--pretty much like any salesperson would do. I've occasionally received a mild pitch to become a rep, but nothing like the weird and deceptive Amway pitch. And unlike Amway, they don't try and hide what exactly it is that they're pitching to me.


Quote:
Originally Posted by Agonist
Does anyone know of a successful door-to-door or MLM company that went to standard store retail and still survived? I can't think of any, and that suggests that it's not just product quality that determines retail success.
I have seen Tupperware sold in kiosks in the mall. They also make a line of commercial-grade food storage containers, available only through commercial suppliers. Also, I think I saw a line from them at Target recently. It was a special line, apparently produced specifically for sale at big-box discounters. Tupperware used to be a really unusual product. Now that there are lots of similar competitors, they seem to have found ways to survive and (hopefully) thrive in regular retail markets. The thing is that they can compete because their products are genuinely high quality. (There's only a few items from them that I'm willing to pay the high prices for, but I'll gladly pony up for these things, as they're unique and awesome. )

I've never seen Avon sold in stores, but I'll bet it could survive the switch. I've never used it, but I hear uniformly positive reviews. Lots of folks prefer other brands, but as far as I've heard, Avon is good stuff at a good price. I have seen Avon stuff sold at small local street fairs. A rep will get a table and put out a bunch of product--usually stuff like bath gel and Skin so Soft. They seem to do pretty well with it.


Ultimately, the difference between Amway and other MLM and direct-sales organization is that Amway is just plain creepy.
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  #43  
Old 03-03-2006, 08:13 AM
Avarie537 Avarie537 is offline
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Originally Posted by postcards
Right, I was getting markup and discount confused. But I did say the commission checks come from MK. I also didn't directly call MK an MLM, just something of an MLM. Sorry for the confusion.

Does Avon really work the way you describe it, Avarie537? My mother was an Avon rep in the 1970's; all her stock was ordered direct from Avon, not her district manager. (And back then I believe the split was 60/40, with the rep getting the 60%. Of course, it's been over thirty years; I could have that backward.)
I've never been personally involved with Avon, but that's how it's been described to me. I guess I should have put that caveat in my post. Honestly, Avon might not work that way - but I know that other MLMs do. (I was once part of a "group interview" that was nothing more than a big pitch for a natural products MLM.)
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  #44  
Old 03-03-2006, 08:30 AM
SentientMeat SentientMeat is offline
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Anecdotal though this is, I have lost a friend to Scamways. My sketicism and critical thinking, apparently, made me 'backwards looking', and he literally didn't speak to me again.

Last I heard, he was living in a council house in Merthyr Tydfil.
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  #45  
Old 03-03-2006, 10:02 AM
jali jali is offline
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I have ex-friends who sell or sold Amway. "Ex" because of the constant recruiting pressure - calls on a regular basis to talk me into becoming a distributor. I was once tricked into going to a party that turned out to be an Amway meeting. The people I know that are involved with Amway act like cult members and I won't have anything to do with anyone who's involved with that religion.
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  #46  
Old 03-03-2006, 11:03 AM
What Exit? What Exit? is offline
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Originally Posted by SentientMeat
Anecdotal though this is, I have lost a friend to Scamways. My sketicism and critical thinking, apparently, made me 'backwards looking', and he literally didn't speak to me again.

Last I heard, he was living in a council house in Merthyr Tydfil.
I'm sorry can you translate "council house" to American English?
I don't know if you mean a jail, a mental institution or a poor house or something else.

Jim
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  #47  
Old 03-03-2006, 11:19 AM
Antinor01 Antinor01 is online now
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Originally Posted by Princhester
Well read this: http://www.cs.cmu.edu/~dst/Amway/AUS/cr.htm. I'm curious as to why you would regard talking "to an Amway person" as being relevant to the truth about their products.
The crystal bright info (2nd in the test)and the SA8 at 4th out of 35 line up with the articles I recall. As to your question, because they tend to know more about articles and such than I do because I really don't care. It's not their word that I would trust, just the knowledge that they have more of an interest in keeping up on amway related news than I.
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  #48  
Old 03-03-2006, 11:43 AM
DarrenS DarrenS is offline
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Originally Posted by What Exit?
I'm sorry can you translate "council house" to American English?
I don't know if you mean a jail, a mental institution or a poor house or something else.

Jim
I believe it's roughly equivalent to "Section 8" housing.

http://en.wikipedia.org/wiki/Council_house
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  #49  
Old 03-03-2006, 01:52 PM
Drum God Drum God is offline
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My wife has been an Avon rep for a couple of years now. It's something she really enjoys. There is very little in the way of carrying an inventory. The catalogs and promotional materials are reasonably priced and she can buy however much (or little) that she wants. The only money risked is the amount of each order. There is a lag time between the time she places the order (and is charged for it), and the time the customers actually pay. If something goes wrong, she could get left holding the bag for the unpaid part of the order. However, she can return the product for 100% credit, so if someone doesn't pay, it gets returned. It's not really much of a risk.

The profit is nowhere near a 60/40 split, however. The markup depends on the item. Some items only get a 20% profit. Some are higher. My wife's margin is usally around 35%, with some 20% items mixed in. If she had more volume, her profit could rise as high as 60%. The retail prices for the items are printed in the customer's catalog, so she isn't free to sell them at whatever price she wants.

She enjoys it. She and my teenage daughter get to go through a bunch of girlie things. It gives her some girl-talk with her friends. She makes about $1000 a year doing it, which pays for little things like having her nails done. She even has me distributing catalogs and products to staff members here at school. (I NEVER sell to students.)
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  #50  
Old 03-03-2006, 02:40 PM
Green Cymbeline Green Cymbeline is offline
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What I don't get is, why would people choose to buy household cleaning products through Amway as opposed to their local supermarket, Wal-Mart, Target, dollar store, etc? Quality doesn't really vary that widely amongst products such as laundry detergent, dish soap, etc. So why pay more for Amway and have to go through the hassle of ordering it and waiting for it to be delivered?

And, who manufactures Amway's products? Do they have their own exclusive formulas and factories? Or are they like some store brands that are manufactured in the same factories as national brands, but just with different labels and packaging (and prices)?
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