There has been a lot of controversy around Amway, some people claim it’s a pyramid scheme, others claim to have found success with it.
In this article, we’ll do our best to answer the question, “Is Amway a Pyramid Scheme?” as well as the possibilities to earn cash with Amway.
Amway Review
Product Name: The American Way Association or Amway.
Product Type: MLM/Network Marketing.
Creator: Jay Van Andel and Richard DeVos
Price: Registration Kit fee: $69 – one time fee, Plus Starter Kit – $99 – one time fee.
Best For: Those who like direct sales, recruiting new members.
Rating: 60/100
Summary: Like all mlm’s, success with Amway is based on recruiting new members and building a team. Ultimately it’s important to have quality products, but the whole network marketing concept is out-dated and time consuming.
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Check Out Our Amway Video Review:
What is Amway?
The American Way Association, more affectionately known as Amway, began in 1959 and was founded by Jay Van Andel and Richard DeVos.
Amway promotes and sells products in the health, nutrition, beauty and home care niches.
Van Andel and Devos started out promoting a single line of food supplements: Nutrilite.
Once that venture took off, after a somewhat rocky start, they decided that they perhaps needed more products to market.
Aside from the Nutrilite brand, they also sell:
- Energy drinks
- Weight loss products
- Skincare
- Makeup
- Laundry and dish detergents
- Cookware.
And various other household supplies and tools.
Amway utilizes the basic multi-level marketing system where people can join to promote the program for some cash.
Amway Compensation Plan:
As with any network marketing company, starting out as an independent business owner for that company means that you’ll be promoting their products directly to the public.
The physical products that Amway has can be sold to your friends, neighbors and relatives.
How much can you make?
The answer to this question is depends on the individual, their marketing skills, how much motivation you experience as a result of small successes, as well as how much “elbow grease” you’re willing and able to muster.
So there’s no set number.
There are two basic ways in which you can earn money with Amway products.
- Selling products for commissions.
- Recruiting new members and building a “Team” to earn team bonuses.
Typically, independent business owners with Amway receive anywhere from a 20% to 30% discount on products when purchasing products for resale.
In short, the idea is to buy from Amway on wholesale, sell full market price, and pocket the small profit.
In other words, you earn a profit as soon as you sell just even one product from your Amway store.
Second Way to Earn Money from Amway:
The second way to make money with Amway is through a sponsorship marketing structure, or MLM payment structure, which has both a width and depth to it.
Unfortunately, understanding the payment and earning structure and model is where many people get confused and often associate Amway with a typical pyramid scheme.
And they good reason for that too. Like many other multi-level marketing programs, Amway encourages you to scale your business by making referrals, and sponsoring other independent business owners.
The idea is to build a team so you can profit from everyone’s commissions and earn bonuses as well.
The company also offers “Performance Bonuses” based on you and your team’s performance. To earn performance bonuses you have to earn Point Volume. The more Point Volume you earn, the higher your commission rate will be.
So the more sales you make, the more money you make.
For example, if you earn between 600 and 999 PV a month, you’ll qualify for a 9% commission rate bracket.
The highest commission rate is only 25%! And that’s after grinding with the program and reaching the minimum monthly sale count on each designated level. Each product in the Amway business model has both a Point Value and a Bonus Value, which combine together to determine your gross performance bonus.
In short, the more people you have in your team and the more your team sells, the more you’ll earn.
Does That Sound Overly Complicated? IT IS.
How Much Does it Cost to Join Amway?
Amway promotes their own business opportunity by claiming that they have a “low startup cost.”
In order to begin your own business with the company, you’ll need to invest in the $67 Amway literature kit at a minimum.
(There’s also a Starter Kit that is recommended for new IBO’s but its not required)
Both these options come with step-by-step guides as well as product and training brochures and other Amway resources to help you get started.
Kits and Prices:
- Registration fee: $69 – one time.
- Starter Kit – $99 – one time.
Amway Cons:
One of the downsides to the Amway business model includes the myriad of hidden fees that you may incur along the way.
While the initial required startup costs might be low, there are certain necessities that you need to spend money on.
For example, you’ll need a functional website and also other incidental marketing materials, such as your own personal business cards. In addition, the Amway resources designed to help you learn how to grow your independent business all cost money. For instance, one of their recommended resources called Amway Inauguration Bundle, a kit that includes marketing materials, costs $338!
There are also fees associated with attending official Amway meetings and conferences that you’ll need to fit into your marketing budget.
In short, there are quite a few hidden fees that aren’t revealed until you create an account.
Another stumbling block may be the commission levels if you’re not used to running your own business and constantly generating sales of products.
According to Amway’s estimate, you’ll need to generate retail sales of about $2,000 in order to turn a profit of about $500.
That may be difficult for someone who is just getting started to achieve. Additionally, the commissions for beginners (members with low Point Volume/month) is really low!
Amway Pros:
On the other hand, some people have the talent and skills necessary to promote these businesses and move a lot of product.
The one thing I liked about Amway is there are over 450 products to promote.
There are some very niche products that don’t have a lot of competition and can be sold easily with a little online marketing campaign.
The real shift and jump in income comes from your inner circle of other Amway business owners that you’re able to effectively recruit, train and motivate to run their own businesses. This is the part of Amway’s MLM payment and bonus structure that many people mistake for a pyramid scheme. Of course, the main income will come from recruiting new people and building a team.
In the previous example, you profited about $500 on your own $2,000 of personal Amway product sales.
If you were to recruit, train and assist only four to five other independent business owners that each generated their own $2,000 in sales, your monthly profit would now double to $1,000 or more.
Conclusion: Is Amway a Pyramid Scheme?
While it is not for everyone, Amway is not a pyramid scheme, and there are many skeptics out there. There are ways to make the Amway business model work for you and there are real physical products you can sell.
Refunds are also – in most cases – offered in full within 180 days.
Interestingly, the FTC investigated Amway in 1979 amid the accusations of the organization being nothing but a pyramid scheme.
The FTC ruled that although Amway was not a pyramid scheme but actually a legitimate business opportunity, they found that the organization did tend to exaggerate the claims about how much income you can earn.
Overall, while Amway is a legitimate business opportunity, you are going to need a clear marketing plan. As well as the startup capital and assistance from other Amway business owners if you are going to succeed. The payment structure can also be quite confusing and complicated for most people.
Though Amway is Legit, Doesn’t Mean It’s the Best Choice:
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Plus, it’s free to get started and are no hidden fees or complicated compensation plans. Our training will show you how to build a profitable website from scratch.
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Got experience with Amway? Is Amway a pyramid scheme in your mind?
Leave a comment below and feel free to share!
Amway
$69 – one time fee, Plus Starter Kit – $99
Pros
- Sell a Wide Variety of Skin Care and Cosmetic Products. Over 450 Products.
- Recruit New Members for Bonuses
Cons
- Based on a Multi-Level Marketing System. Not Worth It.
- Lots of Hidden Fees. You Have to Buy Training Bundles Too.
- Exaggerate Income Claims
I was in Amway global about eight years ago and there was little or no support for the new ideas so I love the products but I quit after six months almost 2 years ago I was approached by some friends to check out LTD Amway I went to a meeting and they talked about helping people and if you help enough people it will help you with the whole emphasis was on helping people and not taking a vantage of them and you have to do a certain amount of volume is from customers so Amway having a AAA rating from Better Business Bureau +180 day return and Products convinced me that this was for me the conferences and Larry Winters set up the LTD site for mentorship of IBO’s so there is mentorship through books and through the media app where you can send audios to prospects cell phones is how much improvement over cassette tapes …. so I know Amway is not a pyramid scheme they have wonderful products and you have to have customers to qualify for your bonuses. Great point you made as there might be other ways out there but this is definitely not a scam so thank you for your fair review of why Amway is not a pyramid
Awesome Don, thanks for your feedback and sharing your perspective on Amway.
Cheers
What happens if current and future college students voluntarily join Amway each and every year?
Amway is not a pyramid scheme if IBO operates property. Actually, i think it is a good business if you want to make some extra money.
However, most Amway lines of sponsorship are in fact pyramid schemes. Back in the 1970s the FTC examined the business. In short the FTC ruled that Amway was not a pyramid if the IBO had a certain number of retail clients and/or a certain percentage of sales through retail clients (i don’t remember what those numbers are). I was involved in the business in the late 1990s and i didn’t know of anyone in my group that had any retail customers. We were taught to “buy from yourself” and get other to do the same. There was no mention of how to get retail clients – in fact i was told you don’t need retail clients. This would mean that the primary goal is to get people to join rather than sell product. Selling product was just a secondary goal. That is strong evidence of a pyramid scheme.
To provide further support, the upline constantly promotes “the system” which are weekly cassette tapes and other so called motivational materials (during my time) from people who were successful in the “business” and the constant plugging of various meeting and conferences. Several years into the business i found out that the significant percentage of a diamond’s income was from the sales of system materials and a cut from the admission prices from the seminars. All the talk was on the “system” on the the products (some of them are not bad but too expensive to develop a retail base even if you wanted to).
I’m not at all bitter that i didn’t succeed in the business and i met some great people who are still friends to this day. I do believe that Amway, Mary Kay, etc. are great businesses if done correctly.
However, the way Amway (Quixtar or whatever its call now) business is promoted and taught, it is clearly a pyramid scheme.
Thanks for your feedback. If you are into network marketing, just combine this with Content Marketing and you’ll have a great advantage over your competition.
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Best,
Todd
As an Amway business owner reading comments and for people to think it doesn’t work is simply not true. In a few months i have been involved I have made over $1,000 in my spare time and it is growing every month.
Yes, it doesn’t work for everyone just like anything you try. People always put the blame on someone or something but never on themselves. If you start an Amway business you are a BUSINESS OWNER.
What business owner literally does nothing with their business and after 3 months quits and says it is a scam. All the “investments” made are money back guaranteed for 6 months.
All events and functions are less than $200 and are also available for refund. Many people have made millions of dollars in this business.
To say its a “scam” is the farthest thing from the truth. You truly do not know what Amway is and that is what is unfortunate.
Core values in honesty, integrity and putting people before profits is something I want to be a part of. When presented correctly its just an opportunity for you to take or not.
Just like nearly no one ever completes a workout program and then blame the program or they are “big boned.” I am far from attacking anyone that hasn’t been successful in the opportunity but just think, because you had a bad experience at a mechanic is every mechanic a hustler? There are bad people everywhere you go. Those bad people in our business do not last and they usually speak bad about it.
Thanks for weighing pros and cons Todd.
Thanks for your feedback Ryan with working with Amyway, much appreciated.
My husband and I looked into Amway a few months ago as something to get into together and we decided it was not the best for us. The guy that recruited us seemed pretty hard up for recruits and he was not making the kind of money the program suggested could be made, and we knew he was busting his butt. We knew that we would probably put in the same effort, and that we’d probably the same outcome–which was mediocre at best. Thanks for this review! I’m sure it can help someone who comes across Amway in the future.
Thanks for your feedback Wendi, I like to have more control than a franchise like Amway provides. I like to control my own business, set my own hours, and market based on content that I rank in Google.
Seems more logical than throwing Amway parties and things like that. Plus, once you publish content that takes the top spot in Google, you’re good to go for ages.
Search What is an affiliate marketing website.. Google it and you’ll see I’m the definition for this topic in Google, this is what I’m talking about. Put in hard work to create the best content and rank for years to come.
If you don’t have a set path for online success, we’ve created a really awesome guide for fellow internet marketers that I think you’ll love.
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Best,
Todd
Todd, Excellent review of Amway. Back in the 70’s I was involved in Amway and didn’t make a heck of a lot. I just wasn’t into having the Amway parties, which is how you can make some money with them.
I can see that if you do have the time and enjoy the parties, it can be a good passive income. I also see with the internet, that you could build an online business with Amway, if you have the right marketing plan.
Thanks for all the good information, but for now it will have to be put on the “back burner” as a maybe.
All my best to your success,
Doug
Awesome Doug,
I think you hit on something that any mlm business can take advantage of.. and that’s marketing.
When I think of online marketing, I think of traffic. How to get more traffic.
Traffic is expensive if you pay for it, but totally free if you know how to tap into your niche market.
By ranking content that is of value to a specific niche market, you can easily dominate that marketing.
There’s a strategic process to do this and we offer this in our Free Targeted Traffic eBook.
Check it out and regardless if you promote a mlm or whatever product, you can benefit from targeted traffic.
Thanks for this review. However, I was not too sure when you said that Amway does not pay much for sales. As you mentioned, generating $2000 of sales will give you $500, which is actually a 25% commission! That is a lot, compared to most affiliate programs that pay 10% or even less. And $67 is actually a low startup cost, wondered why you did this “…”.
What do you think is the best way of building wealth online? If its affiliate marketing, then you cannot say that Amway pays ‘really low’.
Hey thanks for your comment. For a big company that promises the “Dream” lifestyle, Amway doesn’t offer much.
The 25% commission is the maximum, and it takes a long time to reach that level. With that said, 25% commission rate is actually quite low when compared to other programs. For example, there are products on Click-Bank that offer 50 – 75% commissions.
I would prefer to promote a product that doesn’t require me to go out and network with people and host “Parties” to recruit new members. Its a lot of work and not really worth it.
I cant really say what is the best way to build wealth online. Affiliate marketing, email marketing, and advertising works for me, other people like making courses or email marketing campaigns.
The thing with affiliate marketing is every affiliate program is different. Some programs offer excellent commission rates while others offer peanuts.
Wouldn’t it be more fair to say that the business support teams promote the “dream life” more than Amway itself does? I was part of it back in the Quixtar days. Aside from a few basic marketing tools and the products themselves, all of the promotion of opportunity and riches came from the Britt World Wide organization that put on the meetings, seminars and conferences, and sold the books and CDs. BWW and Amway, while affiliated, were two totally different organizations. So much of what I read online about Amway doesn’t make much, if any, distinction between it and these support systems. Anybody I knew at the time who said they felt like they were joining a cult were saying that because of the way BWW operated, not Amway. But Amway was guilty by association.
Great review! I joined Amway two years ago and still buy the products. I don’t try to sell the products or build a team anymore because I got to the point where that’s all I was doing. I ruined some relationships and felt that Amway and my dreams of financial freedom weren’t worth destroying anymore relationships.
I did learn a lot from the education system within my team (sold by my upline, not Amway) which led me to look at other opportunities to earn a residual income. My team stressed buying all the business books and audios, going to all the seminars and conferences, and staying in contact with your upline on a daily basis. These are not required, but, if you get involved with your upline, your team will highly recommend them. For me, this became more stressful than my 9 to 5 job. I was constantly doing everything to please my team and never felt like I was getting closer to my goals or dreams. I could’ve talked to more people about Amway each day, but I didn’t enjoy it.
I do believe the majority of people in Amway care for people enough to promote good quality products and a great opportunity to earn extra money. They aren’t just after people’s money. They want to help people with their health and finances. And I know you can be successful with Amway, but, like you said, it’s definitely not for everyone.
Thank you for your review!
Weston
Great feedback Weston and that sounds like similar experiences I had when I was in my 20’s and worked with similar MLM’s.
I’m just not into network marketing and don’t find it valuable. I prefer to contact my target audience directly through Google, Yahoo, Bing, Social Networks.
That way I never have to rely on an up-line or down-line, etc.
I just write content that helps people, rank in the top spots in Google, drive traffic to my site, convert sales, and repeat the process.
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Amway was actually the first network marketing business I joined. Some people from Chicago drove all the way to Cleveland to present it to me. I liked it, joined that day.
I didn’t last that long but the company and the people were great. Honestly, the company has been around for so long I think you would have a difficult time making money with it these days. Most marketers that I know have already been in Amway at least once or twice.
Some of the products are awesome though. If anything, I’d buy the products without promoting it.
Thanks for your feedback LaShaun regarding Amway. Not a scheme like many think, but not the best money making opportunity out there.
If you’re into making money online and want a successful long term online business, check out our Free eCourse Training Series.
This is the exact same info I use and 1,000’s of others are using to create their own online business and break free of the rat race.
Best,
Todd
Hey Todd!
What an awesome review. I used to be an Amway distributor in the 1980’s so I am very familiar with their products. They are of good quality if not a little more expensive than those you can buy at the store.
I have to say their oven cleaner is the best I have ever tried.
I found it interesting how the company is now operating, and your review was enlightening, especially as many people believe Amway is a scam, which it isn’t.
Its been a trip down memory lane for me!
Thanks Marcie,
I think there’s a handful of MLM’s out there that have developed quality products.
If they have value, great, sell them like anything else.
But the marketing that we use, on this site mostly seo/keyword based content, is free and could so easily be used with any product.
Any niche for that matter. It’s just a matter of education.
I’ve heard about Amway from my friends who were trying to promote it and my first impression was that it was definitely a scam!
Their products do seem ridiculously overpriced, but if it works for some people that’s good.
Thank you for clearing the air with your post. I thought it was an actual MLM scheme, but it seems that it isn’t classified as one.
I don’t think that Amway is the right choice for me, but it may be for others.
Thanks for the feedback on Amway Derek.
Thanks for the interesting article about Amway. I met with the Amway business model long time ago and actually I have some friends who became quite profitable selling Amway products and finding people who joined under them.
My biggest problem was with some of them so obsessed with it, that they tried to get all their friends and family to join Amway under them. So, it was kind of burning the relationships way. What do you think about that? How to avoid it?
Hey Sandy,
Thanks for your input on Amway. I’ve tried similar systems when I was in my 20’s and it’s like beating a dead horse.
I personally love the location independence and the lack of sales that come with niche based sites.
The focus is on ranking content that helps people in Google, YouTube, etc..
With this mindset, you’re no longer selling, just helping people come to an educated decision.
What’s best is that once you start ranking on the first page of Google, you’re done with that aspect of the online business. This is where you reap the reward of top rankings and every day that post sees targeted traffic.
This is like getting paid over and over again vs. always working your ass off for referrals and bothering friends/family.
Check out our 100% Free Training Course if you’re ready for this type of business.
Best,
Todd
Hi Todd,
As soon as I saw
“IS AMWAY A PYRAMID SCHEME?”
I knew I had to Stop, Look and Read.
I am an older guy and I recall Amway from the 60’s. My dad had heard about them through work.
Dad never did much with them and I remember moving out of that house in 1978, still seeing some old Amway product lying in the corner of our basement.
Though the FTC did not label Amway as a pyramid in the 70’s, I will say the incredible wealth generated by the DeVos family in that part of MI had a very negative effect on the last US Presidential election.
Amway in my mind is the Father of MLM, where statistically very few ever really prosper.
Structured a lot like the rest of America with a very wealthy 1-3%.
Thanks for the great read, no apologies for picking on the DeVos family.
My best,
CannaGary
No worries CannaGary, thanks for your feedback and stopping by the site.
Much appreciated!
My mother in law has been promoting Amway for about 10 years. But she didn’t actually start that because of profit. She liked their products and still likes. She only meets the monthly minimum to retain her status there and mostly purchases the products for herself and family. Their cleaning stuff is good – I have used these products, as well, and can recommend.
Thanks for the feedback Arta, more good evidence that Amway is not a pyramid scheme.
Just not the best business model out there.