We all had that realization that we spend a lot of idle time online, and we regret it. This question might have crossed your mind before: Could I make money online?
Yes, you can. However, some ways to make money online masquerade themselves as legit. One particular example is a pyramid scheme. Pyramid schemes are illegal.
Today, we will look at a company called Amway. They offer a way to make money online. Is Amway a Pyramid Scheme? Let's find out.
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What is Amway?
Amway is a multi-level marketing company founded by Jay Van Andel and Richard DeVos in 1959.
In 1949, Andel and DeVos were introduced to Nutrilite Products Corporation, a company that sells food supplements. However, they lost interest after two weeks.
A few weeks later, they attended a Nutrilite seminar in Chicago due to the urging of their sponsor. After listening to talks of company representatives and successful members, they then decided to pursue the business.
Amway sells healthy, beauty, and home care products. The selection includes:
- vitamins and supplements
- weight management products
- sports nutrition products
- energy drinks
- bath and body care products
- hair care products
- oral care products
- air treatment products
- disinfectant cleaners
- laundry supplies
- surface cleaners
- water treatment products
Amway is currently based in Ada, Michigan, United States.
How to become an Amway business owner
These are the steps you have to follow to become an Amway member:
- To become an Amway Independent Business Owner (IBO), you need to fill up this form. However, registering requires you to get a Sponsor IBO Number. You can get one from an existing IBO, but if you do not know any, you can call their Customer Service Hotline for assistance.
- Wait for your Starter Kit to arrive.
- After it arrives, arrange a meeting with you IBO to discuss your future plans in the company.
Amway Enrollment Kits
Amway has these starter kits to choose from:
- Amway Inauguration Bundle - $383
- Nutrilite Double X Messenger Kit - $119
What are Amway distributor levels?
There are 23 total rankings in Amway. Each rank requires members to reach a certain sales quota on a monthly basis.
- Silver Producer
- Gold Producer
- Founders Platinum
- Founders Ruby
- Founders Sapphire
- Founders Emerald
- Founders Diamond
- Executive Diamond
- Founders Executive Diamond
- Double Diamond
- Founders Double Diamond
- Triple Diamond
- Founders Triple Diamond
- Founders Crown
- Crown Ambassador
- Founders King Ambassador
Amway Compensation Plan
Amway's compensation plan can be accessed and viewed through this link.
There are three ways to make money using Amway.
- Retail Margin. You buy the products at a special IBO price, sell them to customers at your marked up price, and you keep the difference.
- Bonuses. You earn points from products you sell and from the products sold by the IBOs you sponsor.
- Incentives. You earn incentives like trips and cash awards for reaching high ranks in Amway.
I found a video on YouTube that can help you understand the compensation plan better. You can watch it below.
Amway Pros and Cons
Do Amway distributors make money?
Apparently, Amway does not disclose income statements of their US members, but I found their 2017 Earnings Disclosure Statement for UK members.
In this, I found out that on that year, 17,205 new members joined Amway. Out of those new members, only 4,735 earned commissions at least once. Their average monthly earnings was £41.82. That amount is not even enough to be considered a proper income for a part-time job.
This data alone shows us that even though the MLM has been around for quite a long time, people still struggle with making money from it. It is quite sad to think that people put their trust in this company but it ended up not living to its promise.
The problem with these companies is they tend to oversell their products and their business opportunities, which lures in people who don't know any better.
People who have no experience in marketing and sales tend to be the ones who are easily lured by MLMs. Most of the time, the people who join do not even receive proper sales and marketing training, which leaves them with no idea about what to do next.
I believe that there are much better ways to make money online than joining MLM companies like Amway and LuLaRoe, but if you find a team that knows how to properly train its members, then you'll find your way to success.
Amway had its fair share of lawsuits and controversy.
In 1982, founders Jay Van Andel and Richard DeVos along with Amway's executive VP for corporate services William J. Mr. Discher Jr., were sued in Canada for undervaluing the cost of their goods in Canada, defrauding the Canadian government in the process. The company settled the outstanding customs duties for $45 million CAD.
In 1966, the Recording Industry Association of America (RIAA) sued Amway for piracy. Allegedly, copyrighted music was used by Amway on their training videotapes. The case was settled out of court for $9 million.
In 2007, Amway's operations in the UK and Ireland were halted due to an investigation launched by the UK Department of Trade and Industry over the company's deceptive marketing, inflating earnings estimates, and luring members into buying bogus "motivation and training" tools.
A number of Amway distributor groups were accused of using "cult-like" tactics to recruit new members and keep them committed and involved to the group.
Is Amway legit?
Yes, Amway is legit and has been in business for many years now.
However, MLMs are often viewed negatively for the following reasons:
- Leaders do not give proper training to their members
- Leaders push members to recruit more than sell products
- Members have no idea how to find their target market
This does not necessarily mean that the company is legit or a scam, however.
Finding the right team will guide you to success, and you wouldn't have to worry about losing your money. You should bear in mind that finding the proper leader to put your trust in should be one of your priorities before joining an MLM.
Is Amway a Pyramid Scheme?
First of all, let's look at what a Pyramid Scheme is:
"A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products." - Wikipedia
As Amway distributors make money both by recruiting other team members AND by selling products to customers, it is safe to say that Amway is not a Pyramid Scheme!
How to succeed with Amway and any other online business
MLMs often get a bad reputation because people struggle with understanding how to properly make sales.
This is because of leaders who also have no idea how to properly train their members in sales, but instead, push them to recruit so they themselves can earn commissions. This is not the proper way to go.
Here is the thing... You cannot force your family and friends to like your products, since they are not your proper market. Selling products to family and friends could only go so far, but you cannot properly earn from them alone.
You need to find a way to reach those people who are actually on board with buying your products.
There are two popular ways to do this:
- Set up paid adverts that target a specific audience within your niche
- Find a way to generate free organic traffic that can be turned into sales
The first option is very expensive and if you are just starting out, then I recommend you scrap that for now.
The second one is completely doable and inexpensive, in fact, you can even get the right tools and information for FREE.
In my FREE 7-day Make Money Online Course, I teach a number of things that can help you succeed with Amway and any other similar businesses.
By the end of the course, you will have the following knowledge:
- How to find your purpose and combine it with your goals for the ultimate winning mindset
- How to choose your niche or better leverage your existing one
- How to build a website in just a few clicks and have your own branding
- How to write content that can attract thousands of visitors who ACTUALLY want to buy your products
Grab my FREE course by clicking on the red button below 🙂
I hope you enjoyed reading my "Is Amway a Pyramid Scheme?" review!
Feel free to let me know your thoughts by leaving a comment below 🙂