The question for many people still remains 'Is Amway a scam'. That is one of the reasons I have decided to do this detailed Amway review.
I guess most of us know of at least one person who has been involved with Amway either as a distributor or customer.
But does it mean you should get involved with Amway and start selling their products?
Can you actually make money and how much does it cost to join Amway as a distributor?
Amway calls its distributors Independent Business Owner (IBO). I disagree with this term since I don't think it is your business at all. But more about it later.
For now, read on to find out if Amway is a scam in my Amway review.
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My Amway Review - Is It Just A Scam?
More About The Amway Company
Before deciding whether or not to get involved with one particular company, it is always a good idea, to get some background information and do your thorough research.
Even though Amway has been around since 1959 doesn't mean everything is 'Hunky Dory' so to speak.
Amway, short for American Way, is based in Ada, Michigan and was founded by two men, Rich DeVos and Jay Van Andel.
Today, the company is led by their sons Steve Van Andel and Doug DeVos as Co-Chairman and Milind Pant as CEO.
Without a doubt, Amway is a huge market player with an annual revenue of over US$ 8 billion. [source: Wikipedia]
For a short few years stint, Amway had operated under the name Quixtar in North America, and had returned back to the name Amway Global in 2007.
Under all these names, Amway, Amway Global, Quixtar, and Alticor, Amway's parent company, there have been some legal issues over the years.
The fact remains though, that Alticor and its companies such as Amway is one of the largest privately-owned companies in the States.
Amway is now available in 100 plus countries worldwide and has over one million distributors.
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The Amway Products
The first product Amway has ever sold is the well-known L.O.C. - Liquid Organic Cleaner, that has remained a best selling product in today's market.
Amway offers over 450 products in four categories:
- Nutrition - Nutrilite
- Beauty - Artistry
- Home - including air treatment, cleaners, and cookware
- Energy and Sport - Energy Drinks etc.
There is not much more to say only that the prices are higher than for similar products in retail stores.
But that is very common for most MLM companies.
Customers can sign up for the autoship program which is called 'Ditto'. I still haven't found out if they are any benefits to it like cheaper prices, and loyalty points.
Amway prides itself to offer a 100% satisfaction guarantee.
How To Join Amway
Anyone who is interested in joining Amway as IBO has to pay a $62 registration fee which needs to be paid annually.
With the registration fee, you'll get a starter kit that includes
- Training materials
- Marketing Support
- Details on the awards programs
- Catalogs and brochures
You can also order an optional starter kit for $99 which has product samples to show to potential customers.
Amway offers a 100% money-back-guarantee for the first 90 days on the joining fee.
Amway has created 80 free online courses to help newbies to get started in their new venture.
One essential role here plays BWW which stands for Britt World Wide, the educational side wing of Amway.
More about them a bit later.
Let's talk about the commission plan first.
The Amway Compensation Plan
There are basically two ways to earn money with Amway.
The first one is the retail markup which means you sell products to customers at a higher price and keep the difference between wholesale and retail price.
The second one is the Performance Bonus which you get paid on your monthly sales volume as well as your team's sales volume.
The minimum sales volume to earn a commission at all is 100 PV a month.
All you get is 3% which is really not much at all.
You have to achieve 7500 PV and more to get a 25% commission.
To be quite frank, I didn't understand the Performance Bonus calculation on the team sales at all.
The compensation plan shows an example but really I didn't want to spend hours to figure the system out.
You can read the full compensation plan here.
To qualify for the Performance bonus of your downline volume you have to be in compliance with the Rules of Conduct.
Here it says: "The Customer Volume Rule states that in order to obtain the right to earn a Performance Bonus on downline volume, an IBO must:
• Make not less than one sale to each of 10 different retail customers; or
• Have at least 50 PV of sales to any number of retail customers."
But then I read in a publication by BWW, remember that is the educational part of Amway, the following: "Every IBO should use the DITTO Phases, starting with at least 100PV monthly because this is where the bonuses start. This gives you the credibility you need to properly promote DITTO to your group, increasing the likelihood that others will duplicate your actions."
Now, isn't that against the rules of conduct? Or, are Amway IBO's required to purchase 100 PV each month to qualify for commission payments?
Can You Make Money With Amway
The question is, can you make so many sales and recruit new people into the company, that you can earn at least a decent income?
By that I mean around $500/month as a side hustle and at least $3000 as a full-time income.
Well, the numbers in the image says it all. The average gross income in 2017 was $207 a month for an active IBO.
Gross income means you still have to pay for business expenses like travel, tax, catalogs, brochures and the likes.
At the end of the day, there is hardly anything left for the IBO.
I think, only a few people will earn a substantial income but the majority will only make a little if any income at all.
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The Pros and Cons Of Amway At A Glance
Let's have a look at Amway's pros and cons.
Conclusion - Is Amway A Scam?
The answer to Is Amway a scam? is a no from my side.
There is no denial that Amway has a well-established market and a good product variety.
However, I would not recommend to join Amway as a Independent Business Owner.
The commission rate is far too low and to understand the compensation plan is a whole different story.
Also, it is not clear if you have to sign up for the autoship program to get to at least 100 PV a month.
There are much better opportunities out there to build your own business.
My Recommended Business Model
Look, I have been involved in multi-level marketing for many years, and I know how hard it is to sell but especially to recruit new people.
As I mentioned in the introduction, being an Independent Business Owner with Amway doesn't mean it is your business.
You are basically a sales person with no guaranteed income at all.
You have to recruit new people into the company to make a (passive) income but at the same time, you can't control your downline in terms of how many sales they make or how many people they are going to recruit.
People come and go and sales can be very inconsistent. Hence, your income will vary every month.
A few years back I've found a way to make truly passive income without selling or recruiting, and earn now four figures each month.
And best of all, it is my business.
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