Amway

Factual Questions
21

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.

22

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.

23

And Russia is hopping on the bandwagon too!!

24

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 …

25

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.

26

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.

27

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.

28

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

29

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.

30

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.

31

Avon, Tupperware, Mary Kay, etc, may do direct door-to-door sales, but do they do multi-level sales?

32

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.

33

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.

34

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).

35

[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.

36

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.)

37

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

38

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.

39

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.

40

Well read this: Amway: The Untold Story: Amway/Consumer Reports. I’m curious as to why you would regard talking “to an Amway person” as being relevant to the truth about their products.