What is Wrong with Amway? [A Review] | Bob Margroff Enterprises

Amway

Product Name: Amway Global

Website URL: www.amwayglobal.com

Founders: Richard DeVos, Jay VanAndel (11/9/1959)

Price: Initial: less than $200, yearly renewal: approximately $65

Worth It Rating (1-10): 5.0

This review is different from my other reviews. I have actually been involved with Amway “back in the day”. I was sponsored by my dad in 1994 (I think) and stayed involved almost until about 2016 (maybe). My memory isn’t the best and I don’t really remember, but it happened to dawn on me that I was no longer having $65 withdrawn from my checking account.

Yeah, I know… how did I let that happen. It used to be a chore to try to leave them because you actually had to write a letter and both my wife and I had to sign it. I had my debit card on file with them, so it just came out every year in the month of December. Well, guess what… my old card expired and I never changed it on file with them. As a result, I lost my “Independent Business Owner” membership.

I am not upset by that in the least and in all actuality, I am ecstatic about it now that I think about it. I didn’t do anything with it and was just losing money on it anyway. Now, I have a website, which you are on now, and I can write about good and not-so-good money-making systems. Amway is one of them… so, I have to ask one thing: What is wrong with Amway? I hope to give an answer to this and with my experience with them to be able to help you make a decision whether to join or not.

I am assuming that is why you are here in the first place… so I’ll go ahead and get on with it and here we go…

Who Are They?

Well for starters, I can start by saying they reported $8.8 billion in annual revenue in 2018. And I believe they’re at that level, I haven’t seen any reports from them on their most recent reporting. Obviously, in the beginning, they couldn’t stake that claim. But, they are no different from any other business starting out.

Anyway was founded by Rich DeVos and Jay VanAndel in 1959. But, before that, Rich and Jay originally were Nutrilite distributors and eventually built their distributorship up to 5000 distributors under them by 1958. The distributorship was called Ja-Ri Corporation. (Wikipedia)

In April 1959, Jay and Rich, and some of their distributors formed what was originally American Way Association, then eventually Amway. Nutrilite was not as stable as they liked, so they looked for other products to market. The first of which was Frisk – organic concentrated cleaner. After purchasing the rights for it they eventually renamed it L.O.C. or Liquid Organic Concentrate. Now they have over 400 different products to choose from. Amway - LOC

After a lot of international expansion, Amway Corporation became Amway Global. The following list is their expansion:

Australia, 1971
Parts of Europe, 1973
Parts of Asia, 1974
Japan, 1979
Latin America, 1985
Thailand, 1987
China, 1995
Africa, 1997
India & Scandinavia, 1998
Ukraine, 2003
Russia, 2005
Vietnam, 2008

Expansion around the world isn’t the only form of change they had. In 1999, Rich and Jay established Alticor as a new holding company and launched 3 new companies under Alticor: Quixtar, Access Business Group, and Pyxis Innovations. Quixtar was the same Amway, but an online version where Independent Business owners could order directly, instead of ordering from their upline IBO.

This expanded version also introduced the drop-shipping model for Amway. Ditto delivery was a monthly auto-replenishment of their products to customers to fill their needs. The customer predetermines what they need for the month based on Amway’s recommended usage guidelines. Ditto delivery accounted for 30% of Quixtar’s North American sales.

Amway is still the #1 MLM around. They have an A+ rating with the Better Business Bureau and to restate what I mentioned earlier their revenue is approximately $8.8 Billion a year… that’s a big chunk of change… ka-ching for them.

What Makes Their Success/Failure?

Their success is unprecedented in all MLMs. I touched a piece of it in the last paragraph. $8.8 billion in yearly revenue isn’t just a drop in the bucket. There are a number of things that make them so successful.

Stability – Amway is the largest and most successful MLM around. They have been doing it for 60+ years.

amwayproducts

Product Quality – They manufacture over 400 products that are very high quality with a 180-day guarantee on everything they sell.

Quality of their system – Top-notch training system; professional brochures; high-quality info packs for IBOs; hold multiple Official training conferences for their IBOs. I am not talking about the additional seminars hosted by some upline Diamond IBOs either.

Now, those were all the pros of Amway as you may have noticed. Let’s get into a few of the cons… not that it causes failure for them… just a little of why the name Amway leaves a bad taste in peoples’ mouths for mentioning it or hearing their name.

Is it a pyramid scheme… no, it isn’t. But, people think it is because there are IBOs that are making tons of money. The biggest reason is they worked hard to get there. Dave Ramsey says in one of his videos on YouTube… “you become a sales manager”. What he means is that you have to sell, then train, then promote. You are constantly doing this because not all IBOs that get into Amway stay in it. I’m a good example of that.

Most IBOs don’t mention that they are presenting you with Amway until they get into the sales and marketing plan. Obviously, in the beginning, they introduce themselves, and the first thing they may do is ask you if you’re happy in your J-O-B. Usually, they mean Just Over Broke with that statement. They then tell you there is a plan B to make money.

Popular “Worldwide Dream Builders” are a big success and the only way to join them is to be an Amway IBO first. Oh, I can talk about them in another article altogether. Stay tuned for that.

Multiple Federal Trade Commission (FTC) investigations… usually come out in favor of Amway, unless an IBO gets overzealous in their income claims… this is a no-no for most MLMs. The FTC ruled out an “illegal pyramid scheme” in 1979 because Amway isn’t paying IBOs to recruit more IBOs. The compensation plan is based on the sales of merchandise. products are expensive

Their products are expensive. In order to make the 100 personal volume, you are trying to maintain. You will end up spending roughly about $300 a month. That can be a lot when starting out as a new IBO and the payback is only about $18 return on investment for that month. Of course, that is if you don’t sponsor any other IBOs into your group.

See how it works… mostly you end up buying a product to represent your sales and in order to earn more, you almost have to promote the sponsorship of more IBO’s for you to benefit. But, Amway isn’t pushing that… you’re up line IBO’s will push that aspect of being an IBO.

The Details…

Their business model is direct-selling combined with the typical MLM strategy of sponsoring. IBO’s really market to customers, but there has been a strong push to sponsor and create more IBOs back when I was involved with them.

25% markup

An IBO may earn in different ways. One way is the markup of the product to customers this usually provides them with about a minimum 25% profit from the sale of a product… I must say it depends on the product as there may also be a 30% markup from cost (IBO or wholesale) on some products. They also earn based on a performance-based bonus system as most MLMs use. This performance is based on what I call drawing circles to present the Amway marketing system when I was an IBO.

Whatever an IBO produces themselves is part of their performance, then it passes up to their sponsor as well and counts as part of their up line’s performance. The “circles” are the diagram that you show every prospect as a method to make money as an IBO. It’s part of your recruiting tools. You have to be certain to show them that they do not have to become an IBO as well. Otherwise, you are borderline to being a pyramid scheme.

As long as an IBO shows how to be a customer and is also buying products themselves then they are not a promoter of the so-called pyramid scheme. This part is where people get confused as to what Amway is to them. That tells me it is not a pyramid scheme or a scam. Because there can be money to be made with Amway, just how much is dependent on what the IBO does for their business.

There is also a better way to earn a passive income, but I will get to that later. Personally, I didn’t do a lot with the Amway Marketing Plan. I couldn’t get anyone that was willing to sit with me to hear what I had to say about it. Most of the time, if I mentioned it. I would get the dreaded question that was more like a statement anyway. “Oh, I knew someone (aunt, uncle, cousin, brother, you get my point) that did that…isn’t it a pyramid scheme?!” Then they would tell me they weren’t interested.

I have a video of one of Amway’s IBOs showing “the plan” and it’s about 8 minutes long. Remember, I am not currently selling this… just that it’s an example of what I used to do… but in person or on an easel in front of a living room or dining room full of people.

I got this one from YouTube:

This Amway Business Plan is about 8 minutes long.

So, that’s the plan as it exists… of course, it may have been updated recently, but I could not find one that was supercurrent. Especially since I am no longer involved with Amway.

Now, along with the plan is the multiple pin levels and I found the following information from AmwayWiki. This is the most current information I can find on this topic. I have each pin level and the qualifications for each. You can take the time to read the whole thing or just glance at what you think is important to you. The choice is yours. Enjoy!?

Pin Levels (as reported from AmwayWiki.com):

Silver Producer – There are three different ways to qualify as long as you hold it for a month:

-Award Volume of at least 7,500 PV.

-One North American Group qualified at the 25% Performance Bonus Level is registered and what Amway calls foster-register, and 2500 PV Award Volume is generated in the same month.

-At least two North American groups registered or foster-registered and qualify at the Performance Bonus level of 25% in the same month.

Gold Producer – any 3 qualified Silver Producer/Platinum months within the same fiscal year. (Amway’s fiscal year runs from September through August)

Platinum – If you achieve any of the three below for any 6 months within the fiscal year

-At least 7,500 PV (Award Volume) in each of the 6 months must be generated.

-One North American group to be registered or foster-registered, that qualifies at the 25% Performance Bonus level, and Award Volume of at least 2,500 PV generated in the same 6 months.

-at least 2 North American groups registered or foster-registered, each qualified at the 25% Performance Bonus level for at least 6 months of the fiscal year.

Note: If this is for first-time Platinum qualification, at least 3 of the 6 months must be consecutive.

Founders Platinum – Qualifying as a Founders Platinum you have attained Platinum qualification for all 12 months of the fiscal year. Achieving 10 Platinum Months and 108,000 TOTAL volume qualifies you.

Ruby – To qualify as a Ruby at least 15,000 Ruby PV should be generated in a single month. Personal group and pass-up PV from non-qualified 25% Silver Producer legs count for Ruby PV. Pass-up from any Platinums regardless of their qualification level doesn’t count.

Founders Ruby – Attaining and remaining Ruby qualification for all 12 months of a fiscal year qualifies you for this pin level.

Sapphire – Either of these two will qualify you for the Sapphire pin level.

-2 North American groups registered or foster-registered at the 25% bonus level for at least 6 months of the fiscal year, plus an additional Award Volume of at least 2500 PV each of those months.

-3 North American groups registered or foster-registered by you that qualify at the 25% bonus level for 6 months of the fiscal year minimum.

Founders Sapphire – If you attain Sapphire qualification for all 12 months of the fiscal year, or achieve 10 months at Sapphire and 252,000 total PV. (As you may know, total PV is your personal group and all your downlines)

Emerald – Attaining Platinum qualification and you personally, internationally registered, or foster-registered 3 or more groups. Each of those should qualify at the 25% bonus level for at least 6 months of the fiscal year.

Founders Emerald – LOL! This is a quick one… attaining Emerald qualification for all 12 months of the fiscal year will qualify you for this one.

Diamond – If you registered personally, internationally, or foster-registered 6 or more groups (and 3 of them must be in North America). And they all must qualify as a 25% bonus level for a minimum of 6 months of the fiscal year.

Okay, you get the point to the whole pin level thing…if you want to see more you can go here. There is a list for the following pin levels: Founders Diamond, Executive Diamond, Founders Executive Diamond, Double Diamond, Founders Double Diamond, Triple Diamond, Founders Triple Diamond, Crown, Founders Crown, Crown Ambassador, and finally Founders Crown Ambassador. Check it out to see what the top earners or the top pin levels require to qualify.

How Long Will It Take to be Profitable?

how much time?

If you have read my other articles, you are going to think about what I am about to say is my standard answer for everything I write about. But, in the long run, it holds true in a lot of MLMs out there.

It depends on how much time you devote to it. Much like what I am doing now. If you put in the time, you will be successful.

In my case, now it will depend on the number of articles I put out there for you to read. The key to what I do know is that no one else makes money from my website. Any affiliate links you put on a website make the website owner money only from the affiliate commissions.

If you are considering Amway, you have to really ask yourself how much time do you want to put into it? How much money do you want to put out and what is your return on investment? Is anyone else making money on my commissions? Those are the key questions you need to ask yourself. Now, I know you are here to try to get an answer to some other questions you may have. I hope that I was successful in fulfilling that for you.

I hinted at what I do, and I may be biased, but it’s my number 1 option for making money. If you click the blue box above you can try it out for free. The best part is there is training to get you started. With that and the free website, you can start making a little money without any cost to you.

Who Can Do It?

Anyone can join Amway, but can anyone be a salesman or sales manager as Dave Ramsey puts it?

Are you willing to be a sales manager?

I tried it and no it wasn’t for me.

I am not cut out to do it. I had a hard time figuring out exactly what to say and was a little uncomfortable with the tactics used to recruit someone into Amway.

I feel like a broken record, but the questions I put to you in the previous section above, still hold… I didn’t have the drive to do that. I am more comfortable doing what I do now. I didn’t think I would enjoy writing. I used to hate to write back in the day. I actually enjoy it now. You may be asking why?

The short answer is I get more of a feeling that I am helping people. If I answered any questions you may have about Amway, then I was successful and I accomplished what I set out to do. Can you get that from Amway? I can say yes, provided they follow the proven steps that are outlined in the mentorship program they use. It also depends on how well your upline takes care to help you out.

If they do what they should, then you should be successful, but in the long run… they are doing it mostly to help with their own bottom line. Remember, your success with your personal volume actually helps with theirs as well. That gives them a percentage in return for ensuring your success.

Worth the Time and Money?

Now the big one… is it worth the time and money? I touched on it a little earlier. It could be, it wasn’t for me.

Is it worth the time? I could say if you don’t mind cold contacting or hounding your friends or family… or you spend a couple of hours a day talking to people and no one takes you up on your offer or purchases any products… then probably not. I have to give the time factor a rating of about 6.

Is it worth the money? That one, I can say probably not. You can go for years without making any more than $18 a month. Or you may make a little more than that based on your sales of the product… but still considering how much you spend each month on the product… the return on investment may only be $18. Not really worth it to me. So, my money rating is 4.

That puts my overall rating as a 5 for the Amway system or program to get into.

I do hope I answered any questions you may have. I also hope that I was informative about the general system of Amway as an MLM and helped you make a decision. If I did, I was successful. That isn’t a monetary value either. I am okay if I don’t make any money on this…as long as I helped you to save money in the long run.

However, if you do want to explore another option-click the blue box above or below or click here to learn more about Wealthy Affiliates.

If you decided not to join Amway, check out this option from the blue box. If you choose not to do that, that’s cool too. I do hope you find something successful.

I wish you the best,

Bob