Anybody could use a little extra money. That’s what this friend said when he came up to me with a proposal regarding Amway. I’d heard a lot about it (mostly just allegations of it being a cult, blah blah) and I had assumed it to be just a glorified pyramid scheme. So I sat and listened to whatever he had to say about it for over an hour. Apparently, they don’t call it a pyramid scheme anymore; it’s called Multi Level Marketing (sic) ! Anyway, I was skeptical from the start and ended up asking a lot of questions and at the end of it all, I was still left unconvinced. Is it that easy to make so much money by doing nothing? Do people really make money off it? How come so many (really) educated people buy into this?
I began digging (it’s not THAT hard with Google).
Amway, set up in 1959 made over $6.5 Billion in 2005 from selling it’s various products (detergents, utensils etc…) and over the years have made the founders; Devos and Van Andel clans billionaires. They use something called a Distributed Marketing System which is nothing more than a pyramid scheme really where people at the top actually earn money and the ones at the bottom mostly dream of getting to the top.
Historically, many Amway distributors in the United States have lost money or barely made minimum wage for their time.
Source: International Business Times
You’re really NOT expected to do anything; you just buy the starter kit which does cost a good amount of money and incidentally, Amway makes most of it’s profits from the sale of these starter kits rather than their so called “100% Reliable Products”. Then you hawk around these products with the hope that you add enough members/sell enough products to join the elite few (Diamonds, Emeralds etc…) who make money.
But it looks like the “little fish” “downline” in Amway have little hope of joining the elite and “miniscule…percentage” that make it really big.
One former Amway distributor recently said, “I lost all I had, great job, my financial future, my wife, children, and soul.”
Source: International Business Times
What is striking of course is that through their various ‘meetings’, Amway has convinced it’s investors that they are actually doing a good thing; financially and morally. These so called meeting have also been accused of functioning like a cult of sorts.
When I told the friend that I needed to do a little reading before I committed to anything, he asked me to NOT go by whatever I find on the net but to simply look up the Forbes List. I do agree that somebody makes money off of all this, but it’s certainly not the ones so down in the chain.
Moreover, Amway’s business model has been declared ‘illegal’ in India and I have a feeling that the 80,000 investors with dollar dreams are in for a bumpy ride!
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