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The O.G. MLM
If there was ever a such thing as an O.G. MLM, Amway would be it.
This infamous network marketing company is the grandfather of all MLMs and is the undisputed Goliath of the direct selling world.
In terms of yearly revenue, no other multi-level marketing company even comes close.
Amway Global is the number-one direct selling business on the planet, raking in almost $9 billion in 2016 alone.
That’s a full $3 billion more than Avon, its closest competitor.
If you’re a budding entrepreneur who’s been alive longer than 15 minutes, you’ve probably heard of ’em by now.
While things have calmed down a little in recent years, there was a time when it seemed like there were Amway distributors lurking around every corner.
Possibly even in random storm drains, like Pennywise from the movie “It”.
So what gives?
What is it about Amway that has drawn untold millions of people into its vortex for going on 60 years now?
Let’s dig into the company a little bit to find out more.
Headquartered in Ada, Michigan, Amway sells health, wellness, beauty, nutrition, and home care products to the masses.
They are one of only a few companies that can claim to have basically pioneered the method of growing an organization through what we’ve all come to know and love (or hate) as multi-level marketing.
Amway now has 17,000+ employees and operates in over 100 countries and territories throughout the world with offices on every continent.
The only exception being Antarctica.
But at this point, I really wouldn’t be surprised if they even had a few penguins on board.
Although the company doesn’t officially publish how many registered distributors it has, a commonly quoted figure is somewhere between 3 and 4 million people worldwide.
As of this writing, Forbes Magazine ranks Amway as the 35th largest privately held company in the United States by revenue.
The company consistently finds its way to the top of the Direct Selling News “Top 100” list.
Their headquarters complex in Ada, Michigan is also quite impressive.
Stretching a full mile from east to west, and boasting 80 total buildings with some 3.5 million square feet of manufacturing and office space.
Needless to say, they’re a far cry from a humble “mom-and-pop” operation.
And let’s not forget the name of the basketball arena that the Orlando Magic call home.
Officially known as the Amway Center, so named because Rich DeVos (co-founder of Amway) OWNS the freakin’ team.
The company has initiated numerous other commercial sponsorships, including being the official jersey sponsor of the San Jose Earthquakes (a Major League Soccer team).
Simply put, Amway is a beast.
Amway was founded back in 1959 (yes, you read that right) by long-time friends and business partners Rich DeVos and Jay Van Andel.
To put things in perspective, that was the same year that Mattel came out with the first Barbie doll.
The duo started out by marketing a line of nutritional products from a company known as Nutrilite, which boasted the first-ever multivitamin sold in the United States.
Impressed by the groundbreaking direct sales model used by Nutrilite, DeVos and Van Andel became top selling distributors.
They later launched a fledgling company known as The American Way (later shortened to Amway) so that they could expand the product line to include regular household items.
DeVos and Van Andel later bought the rights to a highly concentrated organic household cleaner known as Frisk.
They later changed the name of the product to L.O.C. (“Liquid Organic Cleaner” now known as “Legacy of Clean”).
This cleaner, along with their Nutrilite supplements (which the company later acquired), became the core of their product offerings.
Distributors were also given a means to earn residual income through repeat purchases of consumable items.
Fast-forward to today, and the direct sales behemoth has added all kinds of products to their repertoire.
Including several product divisions doing billions of dollars in annual sales by themselves.
The company’s Nutrilite brand of supplements raked in $4.7 billion in 2011 alone.
Nutrilite was also named by Euromonitor International as the world’s number-one selling nutritional supplement brand in 2016.
Amway enjoyed a brief stint of being thought of as an “internet business” back in the late 1990s through the early 2000s, when it launched the now-defunct web-based branch known as Quixtar in North America.
The biggest difference between Amway and Quixtar was that distributors (known as “Independent Business Owners” or “IBOs” for short) could order their products directly online.
This saved them from having to manually fill out order slips and submit them to their upline.
Quixtar was quietly phased out in 2007 and now all IBOs worldwide are one big happy family under the Amway Global brand.
Mostly thanks to their business model, I think it’s fair to say that Amway doesn’t have the best reputation among many folks these days.
But the quality of their products is definitely not to blame.
If there’s one thing I can say about Amway, it’s that their products are LEGIT.
I know several people that have used their Nutrilite multivitamin supplements and have nothing but good things to say about them.
Nutrilite claims to be one of the only vitamin/mineral brands on the planet that grows, harvests, and processes the plants for their supplements on their own certified organic farms.
Apparently they even use special Egyptian earthworms just to fertilize the soil for their organic plants.
Now THAT is hardcore lol.
But it’s not just about vitamins and minerals.
Their household cleaners are every bit as high-quality, with L.O.C. being a groundbreaking cleaner in terms of being fully biodegradable and comprised of organic ingredients.
If you think about it, Amway was doing organic before organic was cool.
And we can’t forget about the company’s Artistry line of cosmetic products which is a juggernaut in and of itself, generating billions of dollars per year in revenue.
Amway also has a popular “eSpring” water filter that has earned mad respect in water purifying circles, garnering high marks from Consumer Reports among many other accolades.
I actually know someone who has owned and used the eSpring, which utilizes UV light along with a carbon block filter to purify tap water.
Not sure about the science but apparently the water tastes pretty damn good.
And I’ll mention one last product which is also one of the company’s most addictive: the XS Energy Drink.
This sugar-free energy elixir courses through the veins of countless IBOs worldwide, bringing in annual sales of more than $100 million.
If you couldn’t tell by now, there are literally hundreds of other products in Amway’s catalog (450+) so I’m not gonna to bore you with an exhaustive survey of their entire product line.
Needless to say, they’re well-covered in terms of product variety.
The only strike that I would count against Amway when it comes to their products, is their typical MLM-inflated prices.
It’s definitely not the worst that I’ve seen, but they’re not exactly the “low-price leader” by any means.
But from my own research and from people that I know personally, I can honestly say that this MLM seems to walk the talk in terms of high product quality.
It’s almost unfortunate that a company that produces such awesome products has been subject to so much controversy surrounding their business opportunity.
I’ll cover that in more detail in just a sec, but first let’s explore some pros and cons.
✓ You won’t have to worry too much about stability with this one.
We’re talking about one of the most well-established companies on the planet — 60 years in the making — with billions of dollars in yearly sales.
To be fair, sales have been on somewhat of a downtrend for the past three years but it’s safe to say that Amway’s here to stay.
✓ Their product quality is mostly outstanding.
If you want to become an IBO, you can be proud of what you’re selling product-wise.
That’s more than what can be said for many two-bit MLM companies out there these days.
✓ As the most well-established network marketing company, Amway offers top-notch training materials for their IBOs.
No raggedy, copy-of-a-copy, black-and-white brochures here.
And no sketchy-looking information packs that you’d be embarrassed to hand out to your friends and family members aka “prospective distributors”.
However, this is not to be confused with the loads of unofficial motivational books, videos, and other Business Support Materials (BSMs) that you’ll be encouraged to buy from your upline. More about that later.
✗ On the business opportunity side, Amway’s reputation is all but in the crapper.
Like it or not, when most people hear “Amway”, a wall goes up before you can even begin talking about the business.
To combat that fact, a lot of their IBOs have resorted to memorizing creative rebuttals so they can avoid using the company name right off the bat.
This had led to the company cranking out some of the most annoying and aggressive distributors in the MLM universe.
I’ll touch on that a little more when we get to the compensation plan.
✗ Throughout the decades, the company has been the target of numerous FTC investigations.
Anyone who’s been around this industry for more than a minute is aware that all MLM’s walk a fine line between selling the products and selling the dream.
As you might expect, one of the biggest and most long-standing accusations against Amway is that it’s an illegal pyramid scheme.
But the FTC actually ruled this out in 1979 due to the fact that Amway does not specifically pay people for recruiting new distributors.
That being said, the company has more recently been in some international hot water in its largest market: China.
✗ Being the original MLM, it’s not surprising that IBOs are heavily encouraged to buy products for personal use.
In return, distributors earn PV (point value) and BV (business volume) which determine their monthly compensation percentage.
Nothing wrong with drinking your own Kool-Aid but like most MLM’s, the products are expensive which can make it hard to convince the average person to make a full switch from cheaper, store-bought brands.
Amway Compensation Plan
Okay, let’s get down to brass tacks: Time to talk about the Benjamins, baby.
As you can expect, the top-level distributors of the world’s largest MLM make sh*tloads of money.
Those at the highest “Founders Emerald” and “Founders Diamond” levels are ballin’ out of control.
Above that, the few at the “Crown” level are making residual incomes that seriously border on the unbelievable.
But like most other MLM’s, unfortunately they represent a pathetically small percentage of the total number of distributors enrolled in the company.
To put it in perspective, Amway has paid out almost $60 billion (with a “B”) in bonuses and incentives to its distributors since its inception.
That’s a LOT of money.
But according to Amway’s own literature, only 48% of all IBOs are active and of the ones that are active, their average monthly gross income is around $200.
You read that right.
Two hundred bucks PER MONTH.
Why so low?
Like all network marketing companies, for most people it’s gonna be an uphill battle to get to any significant level of income.
And when I say “uphill”, I mean a very steep hill.
Starting face down in the mud.
With an army of renegade mercenaries strafing the hill with machine gun fire.
In other words, it might be a little tough to make this thing work.
Let’s break it down, shall we?
First you gotta learn the ropes by starting out as a rookie Independent Business Owner for around $100.
You are encouraged to sell the products to your friends and family, as long as you can convince them the hefty retail price tag is worth it.
You’re also encouraged to “be your own best customer” by switching all of your current household items to Amway products.
Spoiler alert: This will cost you more money out of pocket.
As mentioned earlier, the more you sell, the more Point Value and Business Volume numbers you earn.
Both of which are factored into the formula that calculates your commission.
The part where it gets sketchy is that the BV of the products you buy is not equal to the dollar amount it costs to buy them.
In other words, you might buy a $21.00 tube of skin cream, but the BV might only be about $10.00.
Long story short, this means you gotta buy a ton of Amway stuff to get a relatively meager commission.
For example, buying 100 PV worth of product should net you roughly $200 BV, which will cost you much more in actual dollars and cents.
At 100 PV, your commission will be 3% of BV according to Amway’s Compensation Plan.
Which means that you’ll receive around $6 for your trouble.
And keep in mind that you probably spent well over $200 in real dollars to buy those products.
So basically you spent over $200 to get back $6 in commission.
Don’t feel bad if you have absolutely no idea what the hell I just tried to explain.
After countless hours of looking at their compensation plan, I’m still not even sure if I understand it correctly.
But all you need to know is why there’s such strong emphasis placed on sponsoring OTHER people into the business.
Simply because you can benefit from their BV as well, since their volume becomes part of your group volume (GV), boosting your PV bracket, and therefore your commission percentage.
Translation: If your downline makes more money, YOU make more money.
Do this enough times and you’re a dancin’ millionaire, right?
Not so fast Twinkle Toes.
First, you have to overcome the immense hurdle of Amway’s not-so-good reputation.
That means persuading your friends, family members, total strangers, and possibly a few household pets that your business opportunity is worth a look.
Then you have to invite them to hotel ballroom meetings.
Or perhaps one-on-one sit-downs at a local Starbucks where you sketch out the compensation plan using neat little circles on a piece of paper.
Or maybe a home meeting, where someone with a whiteboard draws out the plan Pictionary-style.
While all of this is going on, your upline is steadily encouraging you to invest in a small library of motivational material aka the aforementioned Business Support Materials (BSMs).
Supposedly to give you the knowledge and inspiration you need to succeed in the business.
This is one of the biggest points of contention between Amway critics and supporters.
Basically you’re told that the more BSMs you and your group buy, the more likely you are to succeed in the business since you’ll be developing the proper “mentality” for success.
It’s important to mention that distributors who choose to sell or distribute BSMs must emphasize that the purchase of these materials is optional.
But it’s common for new recruits to hear such phrases as “tools are optional, but so is success!” or “I’ve never seen anyone be successful in this business without these tools.”
Now to be fair, I completely agree that without the proper mindset, you don’t stand a chance of being successful in this or any other business.
However, the costs for these “optional” BSMs start to add up pretty damn quick.
To the tune of hundreds of dollars per month, on top of the money you’re shelling out to buy products for personal use.
And who is all this extra BSM cash going to?
The top-level distributors who are selling it to you, of course.
You’re also encouraged to attend weekend seminars, “attitude sessions” (more motivation), “night owl” sessions (still more motivation), and especially major functions and conferences.
You might even hear that “not attending the next major function will set your business back six months!”
The point of all this stuff is to cram as much Amway knowledge and motivational meth down your throat until you become a walking spokeszombie for the company.
The only problem is that you still have to convince a whole lot of other people to do the exact same thing.
Easier said than done.
But if you do this enough times for enough years, you just might end up with a massive network of IBOs, as well as some impressive monthly residual checks.
Unfortunately, the chances of that happening are slim.
Amway: Bottom Line
|Amway is the most successful network marketing company on the planet, with billions of dollars in yearly sales and a track record spanning six decades.||Thanks mostly to their business model, Amway’s reputation among many folks who recognize their name, is poor to say the least.|
|For the most part, their products have a reputation for being very high quality which can lead to long-term customers.||It costs about $100 to become an Independent Business Owner (IBO), and you are expected to buy a lot of products for personal use which tend to be pricey.|
|Amway offers more than 450 products ranging from skin care to health supplements, so it's safe to say you won't run out of things to sell as an IBO.||Like all MLM's, there is a strong emphasis placed on sponsoring other people into the business so you can make commissions from their sales as well.|
|As the most well-established network marketing company, Amway offers top-notch training materials for their IBOs.||Distributors are frequently encouraged to buy costly motivational books & videos from their upline to help them succeed.|
|The company runs first-class conferences for their distributors to keep morale high and emphasize the importance of having the right mindset for success.||The rah-rah culture of the company has created some of the most annoying and aggressive distributors in the MLM universe.|
|The top-level distributors in Amway can earn some of the highest commissions in the MLM industry, with yearly incomes in the high six and seven-figure ranges.||The company admits that only 48% of all IBOs are active and of the ones that are active, their average monthly gross income is only around $200.|
So is Amway a scam?
Short answer? Nope.
They do have an outdated business model in my opinion, but it’s not a scam.
C’mon, they’ve been around for 60 frickin’ years.
Gotta respect their longevity and success as the largest MLM in the world.
Not to mention their product quality is better than most.
The money is definitely out there… remember the $60 billion in bonuses and incentives I told you about?
The catch is that you will need to build and maintain an absolutely MASSIVE organization to get anywhere near the six-figure income level or above.
To put it simply, it’s a long shot.
Numbers don’t lie and history has shown as much.
But maybe you should try switching it up.
Y’know, stop chasing old multi-level dreams and start learning a new skill set.
One where you can still be your own boss and rake in a lotta dead presidents.
But it’s your call Neo.
Take the blue pill and keep pestering those closest to you about your amazing home biz opp.
Or take the red pill and giddy-up on over to this link.