Friday, October 11, 2013

Amway Is Legal?

Amway is a legal company. They were investigated by the FTC back in 1979 and the FTC ruled that Amway was not an illegal pyramid because they did not pay for recruiting (headhunting fees) and they required product purchases. Also, there is no required purchases and Amway has a fairly generous refund policy. So yes, Amway is a perfectly legal MLM company. What is not true is that the better business bureau (BBB) endorses Amway and the FTC did not "praise" Amway after the 1979 ruling.

However, that being said, doesn't mean that IBOs and IBO leaders can't run their independent businesses in an illegal and unethical manner. For example, if your upline tells you not to sell anything and to simply buy your volume to qualify for bonuses, that is a very questionable practice. If your upline tells you to deceive people about the Amway opportunity, or teaches "fake it till you make it", that is also a questionable practice.

Amway the company has some standards that they uphold but at times, IBOs or IBO leaders will disregard those standards. New IBOs and prospects at times may not know when their upline or sponsor is leading them astray, which is what prompted me to write this post. If you are taught to "submit to upline", keep in mind that you are an independent business owner and will be responsible for what happens with your business. Too many times I've seen or heard of IBOs failing and accepting the responsibility all the while following the "experienced" advise given by upline. What is troubling is that many serious IBOs will be paying for advise from upline in the form of functions, seminars, cd of the week, open meetings. Yet when followed advise fails, upline will tell the IBO they are responsible for their own failure. WTF??

Some IBOs I've known stayed in Amway for many years, spent tens of thousands of dollars or more and have not made a cent in net profit. They have been programmed to think that they will succeed if they never quit or that success is right around the corner and they can't quit because they don't want to quit just before the business pays off. In the end, a business is a business and IBOs need to look at their bottom line. If you aren't making a net profit after following the plan and advice mapped out by upline, there comes a point where tough business decisions must be made. Maybe Amway is not the way. Maybe it's time to do something else? Nobody can make that decision except the business owner.

So to summarize, the Amway corporation is perfectly legal but your sponsor or your upline can be running things illegally without Amway's knowledge, which can cause you financial damages. New IBOs and people who are looking into the business need to be aware of these facts. I hope this post helps someone.


Anonymous said...

If memory serves me, one of the main reasons that Amway was not ruled a pyramid scheme was because Amway convinced the FTC that the primary focus of the IBO was product sales, and recruiting was secondary. Of course, that's never been enforced, or true, but that's the official Amway party line.

Note that Amway was not found guilty. That is not the same as being found innocent.

I'd guess most or all of the expenses of an IBO are voluntary, if you ask Amway. In reality, the pressure to buy all the books, tapes, rallies, meetings, voicemail, web site, etc. is enormous. As long as nobody's getting busted, why would Amway enforce this and bite the hand that feeds them?


Anonymous said...

Amway cant do much about it really. The big leaders are too strong as they control so many ibos. Imagine if a holly chen decided to bring group to another mlm company. Thats probably 300 thousand ibos gone.amway did clean up the uk when the government was about to shut it down. Amway terminated several high pins and the government enforced rules on who could sponsor , income potential disclosure etc. The whole business fell apart and took years to even start again

Unknown said...

Wait a minute...books, tapes, rallies, meetings, voicemail, website? Amway doesn't sell these things. They sell soap, make-up and vitamins.

You're mad at Amway because someone said, change the way you think by investing in yourself and your business? That makes little sense.

Try having this attitude in an IT job that requires Cisco or Windows certifications just to stick around. Or law school, or even undergrad for that matter, and you won't make it through the first week.

And that's a job. Try it in the Amway business, or any business, for a year and check your results.

Don't read any books, blogs or magazines that deal with your industry. Don't go to any workshops, conferences, lunches, dinner parties or training sessions and let me know how it turns out. I'll even sponsor you!

The cool thing about Amway is they pay you extra bonuses for doing these things. They realize there are habits behind success and you are rewarded accordingly. Once again, pull that at work. And if what you learn from their training system allows you to create more income and opportunity for yourself than the person that hired you, forget everything I said. The problem is it won't.

Full-time Student and Business Coach

Anonymous said...

The FTC just did not do its job. The uk dept of Fair Trading forced amway to make significant changes or else face shut down.

Joecool said...

Hi Shaun,

Amway does sell voicemail. It's called IBOCS. And while Amway doesn't sell seminars and cds, etc how many of these would be sold if not if not sold to Amway IBOs?

rocket said...

Moxious Maximus Commerce Shaun? Do you sincerely expect to be taken seriously with a fairy tale business name like that?

That frigging business name SCREAMS Amway.

What the heck is it with guys named Shaun and Amway? Good God.

Amway people expect to be taken seriously yet insist upon coming up with pie in the sky cool sounding business names instead of actually investigating what realistic P&L numbers they are looking at and comparing it to the effort expended along with value created.

Same old same old. Let us know when you quit too there Maximus. The only unknown is how soon you fizzle out/run out of money.

Because you will see the light eventually. The only thing that varies is how soon you decide to see it.

Joecool said...

Rocket, good to see you around. Thanks for the comments!