What is Amway?
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Amway is a business that operates on the basis of pyramid selling. It is described as a multi-level marketing scheme in which there are different levels of sellers. The company originated in Michigan, and sales of its products hit six billion US dollars (USD) in 2005.
Products sold by Amway agents range from jewelry to cosmetics and health care. Amway also has product lines including dietary supplements and home care goods. Amway's sellers are called Independent Business Owners (IBO), and they are a link in a long chain that makes up the company.
Amway works by assigning a Points Value (PV) to each of its products. The PV amount of each product determines how much commission the seller makes from the sale. The PV of a given good is the same regardless of the country it is sold in. The PV can be thought of as a common Amway currency used around the world.
The amount of a product that is sold is known as the Business Volume. This figure is used to determine the value of a product in local currency to the individual country. The commission level for each seller can then be determined and paid monthly.
The multi-level marketing system is very important in Amway's business plan. The company does not market itself as a pyramid scheme, but the multi-platform plan is the same as a pyramid. There are many different levels within Amway. Any person who wishes to join must be sponsored by an existent member. The new member must purchase an introductory pack and pay a yearly fee to stay within the Amway company.
The different levels within the company are known as pin levels. The higher the pin level a person belongs to, the more IBOs he will have working for him. Each pin is named after a precious gem or metal. Among these levels are the Platinum level and the higher Diamond level. A person who has reached the Platinum level should be earning enough money from her sellers or IBOs to have a full time wage. If a person reaches the Diamond level, he will earn a six figure income from the work of his IBOs.
Within Amway, there are levels upon levels. The higher one's level, the higher her income and financial freedom. The higher pin levels distribute the material to be sold to the lower levels and earn large amounts from the sales.
Amway is a huge corporation, and like many corporations, they have been targeted often as a pyramid selling scam. A large amount of Amway's profits come from business tapes, books and compact discs rather than from direct selling. Other controversies surrounding Amway include tax evasion and customs fraud. In 1983, Amway was fined 25 million Canadian dollars (CAD) after being found guilty of both. Amway is also very vocal regarding reports of deception and has tried to shut down Internet sites that have run reports on their practices.
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14
Life is about a pyramid but Amway is not a pyramid scheme. why are people getting back in amway? (A) because the future is moving so fast in technology in five to ten years' time the money just won't be there and(B) because if you get in now you have a good chance on being up there. - anon50774
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I love the fact that everyone gets touchy about the word pyramid. Truth be known most direct selling programs operate on a pyramid basis. Basically meaning that the only way to make large amounts of money is not to simply sell the product yourself but have the people below you in the pyramid or pipeline (as Amway likes to call it) also selling. A pyramid scam is a bad thing, in these the only money being distributed is the recruitment fees, and making money is dependant on more and more people joining below you. A direct selling company that used a pyramid basis isn’t a bad thing (necessarily) as the money being distributed is devised from selling a product – whether it be Herbalife, Nutrimetics or Amway products. So long as there is a demand for the product there is a chance to make money. - anon47018
12
Amway is a business that operates on the basis of pyramid selling" is the wrong statement.
The truth is that it is a direct selling company. Direct selling is the industry which was worth more than $114 billion in 2007. By saying that it is pyramid selling this is telling indirectly that the whole direct selling industry is pyramid selling. - anon41871
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how come i've seen friends who are in their 20s earn six-figure incomes in a year? how come all i've gotten from amway is real friendships with real people? amway works, the only thing that doesn't work is *you* if you work amway. if you want to get informed, don't get informed by quitters and negative people who would go onto the internet and waste time posting bad stuff. - anon38655
9
Amway is the biggest lie i have ever heard! All this crap about earning money and so on... i tried doing it for several years but i ended up paying, and not being paied!!! Stay away from amway! *Big lie*! they only want to get you, your time, your money, your life... being dependent on them fully!!! Go, go, go and find yourself a decent job and live your life to the full as an honest man. This is my advice. God bless you and may help you to find real peace and joy in a *real life*! - anon35843
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In a pyramid business the person below you can make more money than you will. W/Amway's business model. If you're a slacker and the person below you isn't he or she will eventually surpass you and you will no longer accumulate points form them.Second, new distributors are *not* required to purchase an intro kit. There are benefits associated with doing so, but it's definitely not required. (Some "groups, or lines of affiliation as they are called, try to promote them but *Amway* itself does *not*.) Third, Amway does not sell books or motivational tools. Again, those things are provided by a distributor's line of affiliation. Amway does not make a dime off of those items. Some LOAs are a bit on the shady side and try to lead new members to believe that they're necessary or required, but they are not. If the new members actually read the registration agreement they sign they would know that they are not required to do any such thing. Amway provides *free* training on their website for their distributors along with a well trained Customer Support staff that's open six days a week to assist them w/building their business. - anon32572
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"Amway is a business that operates on the basis of pyramid selling" is the wrong statement.The truth is that it is a direct selling company. Direct selling is the industry which was worth more than $114 billion in 2007. By saying that it is pyramid selling this is telling indirectly that the whole direct selling industry is pyramid selling. - triadi24
6
Hey anon, I work for the Department of Defense and it's set up like a pyramid. Using your logic, the defense of our country is a scheme! And dumb me, I work for the government for a salary and my cousin started with Quixtar and works for herself. We started the same year. She's making triple my income and is home with her kids and I'm the one with a business degree! - LifeisGood
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ibofightback obviously doesn't understand how Amway works.
Yes you don't get a fee for recruiting but that's a technicality. Nearly all active IBO's are constantly recruiting, not to get a fee, but in hopes that their new recruits will move some product and RECRUIT OTHERS! - anon7727
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I had read many articles regarding Ponzi schemes and pyramid schemes long before I encountered "Scamway" and their "interactive distribution" or, as I like to call it, "interruptive distribution." At the first "Scamway" meeting I was invited to I recognized the pyramid scheme and wondered how many idiots there were in the world to not recognize the same. Obviously there are many. I last thwarted an attempt by "Scamway" to bilk my friends and illustrated to them how "Scamway" was a pyramid scheme and they were amazed. They immediately cancelled their follow up meeting with the scammers and saved their hard earned money and, probably, a great deal of grief. - anon4320
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A few points -
1. Amway has actually shut down far more sites *in support* of it's business model than against it - basically anything they considered a rule violation. They now admit this was a mistake as it meant all that was left on the internet was "critics" sites.
2. Amway makes virtually NO income from business tapes, books etc, as you claim. Some Amway Independent Business Owners have, on their own, set up independent companies for the purpose of offering these kind of services and materials to Amway IBOs. As you would expect, they do profit from that venture.
3. Amway is in no way a "pyramid scheme". In pyramid schemes you make money through recruiting other people. In Amway you make no money at all through recruiting others. Payments are entirely based on sales volume. Of course, just like if you owned any other business, if you have more sales people then your sales volume is likely to be greater.
Get the Facts - The Truth About Amway and Quixtar - ibofightback
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Written by
Garry Crystal
Last Modified: 31 October 2009
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