Friday, June 10, 2016

The Real Amway Scam

A lot of people come and go in Amway, but many of those who come and go don't even notice the scam. They get sold on what they believe is a business opportunity that they can maksome money at, or at the very least save some money on products that they would normally buy anyway. If they do it right, they can possibly make some "real" money and with some had work, you can build it right and have the option one day of walking away from Amway and living off ongoing residual income from Amway. It sounds reasonable and therein lies the scam.

For years, I have challenged people to name 2-3 people, aside from the Amway owners, who joined, built the business "right" and was able to walk away and retire with ongoing residual income, enough to be financially free forever. Not a single person has been able to name and confirm that even a single person has done this. I believe it's all a lie and part of the scam. Amway's distributor force turns over about 50% each year. How can you build a residual income empire when half of your downline quits each year? I believe Amway diamonds trade their 9-5 jobs for the night shift. They work at night and into the morning hours because they are working to replace people who quit and to support downline platinums who might struggle or fail to re-qualify for that level. If upline says they are working for the love of their downline, I call BS on that. If walking away and enjoying life was an option, why hasn't anyone chosen it?

Now you could argue that a diamond's "work" isn't that bad and they aren't reporting to a boss. And that would be true, but I imagine the pressure of churning peope in and out to keep qualifying can be stressful in itself. If you live on an island like me, you can eventually have trouble finding new people to work with. In 1997 or so, there were a bunch of diamonds in Hawaii and they all moved to the ainland. Now I"m not sure why but my upline diamond was Harimoto, who loved the ocean and the beaches. Yet he moved to Washington state. I believe they needed new grounds to mine, just like gold miners.

The next part of the scam is how IBOs will tell you about Amway's generous money back guarantee. 100% they'll tell you. What they don't tell you is that the guarantee is only on some of the products and the sign up fee. The cds, books, voicemail and functions are not sold or run by Amway. And these expenses can be very significnt over a period of time. IBOs and prospects need to know this. You can lose thousands and get back pennies on the dollar asking for a refund on the sign up fee and perhaps a few products. Another piece of the scam.

Also, IBOs and prospects are often shown only the very best case scenario (such as going diamond) but not told that your chance of being struck by lightning is much higher than your chance of going diamond, even though going diamond is not a random event. A real life and likely scenario is getting in and trying hard for a while, and then quitting with some business losses. At least if you know this and still try anyway, you will have done so with full disclosure.

Lastly, it's insidious in my opinion, for upline to tell you to trust them and to do as they say, and then turn around and tell IBOs that failure is their responsibility. That they didn't work hard enough or do thing just right. That sure isn't what they are preaching when recruiting you into the business. They are saying how sharp you are and how you're likely to tear up the business. But it's just another facet of the scam. I've outlined the parts of the opportunity that I believe are scams, but I'm sure it's not limited to my point of view.

Good luck if you read this and join anyway.

18 comments:

Mike Cleveland said...

"For years, I have challenged people to name 2-3 people, aside from the Amway owners, who joined, built the business "right" and was able to walk away and retire with ongoing residual income, enough to be financially free forever. Not a single person has been able to name and confirm that even a single person has done this. I believe it's all a lie and part of the scam."

I am the step-son of Bill Blitsch and his wife, Joy, was my mom. She died early of cancer and Bill died of alcoholism. They were sponsored by Keith Lockwood, sponsored by Jack Daughery, sponspored by Ron Puryear.

I can tell you that while Bill and Joy Blitsch worked the Amway business they did indeed make a lot of money, as Emeralds. My step-dad retired from his law practice and they were on their way to Diamond when my mom died.

I did not carry on with the Amway business because I became a believer in Jesus Christ and saw the Amway business as idolatry and greed. It is no savior, as so many claim it to be.

Just wanted to share my quick story.

Joecool said...

Mike, thanks for your comment. I hope you return so more information can be shared. Are you an heir of the business that still collects residua income from the business that your parents built?

You said you did not carry on the business. Does that mean you quit?

If you don't return, you'll be one of many who named someone who named someone who allegedly walked away from Amway but no actual confirmation of the claim.

I hope you return so more information can be shared.

Jerry D. said...

Joe, Mike says they made money (gross NOT net), but he doesn't say they stopped working Amway collecting residual income. So they're like all the other Emeralds working hard at Amway, making gross income, and spending almost all of it on tools and functions, just like everyone else in Amway. No residual income, and probably very small net income for all those years of hard work.

Mike Cleveland said...

Hi. I'm happy to return and answer any questions that you have (if I know the answer). No, I am not an heir of the Amway business, I received nothing at the death of either my mom or step-dad. As far as I know my step-dad died penniless. He lost his home and moved to Mexico where housing was less expensive. I heard that he died drunk in some hotel. I never received a dime from Amway.

Yes, I quit Amway. I believe I explained why in my first post. I became a believer in Jesus Christ and began to see people's "dreams" as simple idolatry, false worship, loving money and treating it as their "god." I was never really involved, had no downline, though I did travel with my parents and listen to them speak. It seemed to me to be drudgery, practically slavery as they worked so hard to motivate people to get out and "show the plan."

I know some people have attempted to combine their faith with their Amway business, and I am in no way stating that one cannot be a Christian while building an Amway business. I am only saying that for me the two were incompatible. When one finds Jesus Christ to be their treasure, their dream and their life, then it's an obvious next step to rid the life of false treasures and dreams. I'm 54 years old and have a very full and fun life, and do not regret one moment that I did not carry on in my parent's business, and would love to invite each and every person in Amway to come and find what I have found in Jesus.

Anyway, I did want to verify that I saw my parents indeed make lots of money when they were working the business, and I personally do not believe that Amway is a scam. It seems to be a legimate, albeit very difficult business whose success is tied into hard work.

I still remember being at the Portland International Airport when Ron Puryear flew in on his private Citation jet. My parents had invited me to go with them and meet the Puryears. My mom said, "wow that's the biggest jet I've ever seen". Anyone who knows what a Citation jet is knows that statement had to come from a dreamy, wild-eyed person caught up in a fantasy. A Citation jet is a very small business jet. Yet clearly there was some money there. Being in aviation myself (I'm a Boeing 787 captain now) I knew the Puryears had to be either millionaires or deeply in debt to afford such an airplane.

Anyway, if you have any other questions please ask, I don't mind sharing.

Joecool said...

Mike, thanks for your answers. I believe you to be sincere. What you appear to be saying is that your parent made money while they were working Amway. I believe that because any pyramid like operation rewards those who are on the top. The problem is that the "success" comes at the expense of the downline. Most likely in the form of tools purchases and not as much from Amway, because tools have a higher markup with less people getting a cut from the profits.

It looks however, that your parents did not receive any ongoing large amounts of residual income from Amway if they apparently passed away "penniless".

I agree that Amway sells too many false hopes and dreams.

I'm happy that you found salvation in Jesus. I once asked my church pastor what he thought about Amway and he said Amway and MLM in general offer too many false hopes and promises, and for that reason, he did not support MLM.

Mike Cleveland said...

I certainly agree with some of what you said here. I saw my parents who were "at the top" making good money, but those underneath working awfully hard for hardly anything. In fact, they spent more on "training" than they ever made. But this is much like an organization. For instance, the CEO of the airline I work for makes as much in a week as I make in a year. He's at the top of the pyramid and all of us "worker bees" work very hard for not nearly as much money.

I'm not justifying any pyramid scheme, I'm just stating that corporations often times are structured much the same way.

In that sense, I believe Amway offers a legitimate business and rewards those who put in the time and effort to make it work.

As far as "success coming at the expense of the downline", this can be true. But yet again, a corporation can only be successful through the hard work of the employees.

What I'm really railing out against is not Amway, per se, but rather the organizations (WWDB, IDB, etc.) who are instrumental in fixating people on having "dreams", so as to motivate them to work hard and possibly get rich. This is sinister, demonic even.

I agree with your pastor entirely. In fact you might compare Abraham and Lot in order to see the same mentality of Amway and "normal" businesses. Lot saw Sodom, that it was rich and green and fertile, not to mention highly enticing in its offer of pleasure. But Abraham chose the plains, open spaces, and time alone with God. Lot lost it all, his entire life, and ended up in a cave, whereas Abraham died "old and full."

Mike Cleveland said...

Jerry said, "So they're like all the other Emeralds working hard at Amway, making gross income, and spending almost all of it on tools and functions, just like everyone else in Amway. No residual income, and probably very small net income for all those years of hard work."

I believe this is true.

Joecool said...

Mike, thanks for your candid responses but I disagree strongly with one point. In a corporation, a CEO certainly might make a lot of money, but even the lowest guy in the organization still gets paid and has a net gain at the end of each month. That isn't true in Amway where many of the downline are taking losses that the upline profit from.

So can I ask what your parents retired on since the Amway income likely dried up quickly once they stopped working it?

Joecool said...

I thought that emerald was where the tool income from WWDB, etc began to become significant. Are you saying it wasn't?

Mike Cleveland said...

Right, the difference between an employee and a business owner. In a corporation there is the CEO and there are employees. Every employee makes an income. But when you own your own business it's different obviously.

In answer to your question as to what my parents retired on, my mom died while they were still building the business, my step-dad most likely retired on social security income.

Joecool said...

Sorry about your mom but I thank you for the insight you've shared on this blog and I find it informative and helpful. Good luck to you and I hope your walk with Christ continues to grow.

Anonymous said...

This conversation with Mike pretty much sealed it. His step-father retired on SSI. If anyone reads this exchange and still think Amway is a good "business" then I will leave them to chase their desires.

Joe I thank you for writing these blogs and keep on doing so. This will be a warning for those who choose to listen.

Joe your blog is like these ancient stones that dot the island of Japan that says, don't build your house below the level of this stone or else a tsunami might destroy everything you have and then there are people who don't heed the warnings and get what's coming to them.

Here is an article: http://www.nytimes.com/2011/04/21/world/asia/21stones.html?_r=0

Joe you keep on leaving a trail for those who are wise enough to listen. I think it would be awesome to translate this blog into different languages.

Joecool said...

Thanks for your comments. I believe that Mikes' story confirms that there is no real residual income, if true. We didn't actually confirm anything, just as I would have wanted to for someone making a claim of wealth.

But really, with a big attrition rate, how can anyone expect their business to remain viable for long once they quit?

My blog can be translated for foreigners. I know this because I occasionally get forein language comments!

Ben Dover said...

Mike Cleveland said, "Right, the difference between an employee and a business owner. In a corporation there is the CEO and there are employees. Every employee makes an income. But when you own your own business it's different obviously."

This, along with your other statement about Corporations being pyramids is a very common fallacy taught to members and aspiring participants of MLM. This is called the corporate hierarchical fallacy. A corporation's success is based on the sales of a good or service, whereas an MLM's success is based on the gathering of more participants in the "business". The MLM uses their product to disguise this necessity, and lures people in with a "dream like opportunity", that leaves most people penniless as the pyramid grows exponentially. A corporation does not hire members to go around trying to train other members to train other members to train other members (That is where the pyramid comes into play, and why it isn't sustainable). Amway in particular is more concerned about your monthly consumption of 100 PV and teaching you how to get more people to do the same, rather than sell the products to those people. Eventually there will be nobody left to teach how to consume the 100 PV worth of goods, and the pyramid will collapse leaving those at the bottom to never make a dime. Hopefully this helps to explain the error in the logic you brought up Mike Cleveland.

Mike Cleveland said, "In answer to your question as to what my parents retired on, my mom died while they were still building the business, my step-dad most likely retired on social security income."

Your step father (another Emerald gone bust like Schiebeler) is another story that needs to be shared. Too many people worship those in the high ranking positions, and little do they know, those people aren't seeing any real piece of the pie. It makes me very frustrated when I saw the people on stage claiming to be "retired" as platinum's, ruby's, sapphire's, and emerald's, but really they weren't making anything. It is a reality check that the Amway sheeple need to hear, because they have no idea who the real winners are, and they don't know that they are not welcome to dine at their table.

Mike Cleveland said, "What I'm really railing out against is not Amway, per se, but rather the organizations (WWDB, IDB, etc.) who are instrumental in fixating people on having "dreams", so as to motivate them to work hard and possibly get rich. This is sinister, demonic even. "

I agree that these organizations are sinister, and they were born out of necessity. As the Amway game had to evolve because people were catching on quickly, new tactics were installed to make sure people were continuously brought in. However, to suggest that they are solely responsible without Amway being held accountable is ridiculous. These business have a symbiotic relationship to Amway, and could not exist without them. Also, Amway could not exist without the businesses making them one and the same. They both hide behind one another creating a vagueness/blurred line of where one begins and the other ends. It's truly nauseating to see how they continue to find legal loopholes to destroy American's lives.

Joecool said...

Great comment Ben! I'll add in one more thing. MLM defenders will ask if Amway is a pyramid, why hasn't it collapsed after all these years?

And the answer is very simple, it hasn't collapsed because Amway has expanded to new territory and because new people are born and turn 18 every day.

But the last 2 years shows Amway with sharp declines in sales. That will be interesting to follow.

Mike Cleveland said...

Hi Ben,

I certainly agree with some of your comments and hope that people will wake up to the reality of the false idols that Amway and WWDB, etc. promote.

Jerry D. said...

I think another reason that the pyramid doesn't collapse, Joe, is because the system is designed to take a very long time to recruit each new person. In most pyramid schemes it's a very simple pitch that is done one time in less than half an hour to new prospects, and they either join or not and pretty soon within a few weeks you deplete all your potential family members and friends and contacts. Not to mention that saturation happens very quickly, and everybody comes to know about the pyramid scheme and they either join or not, and then it pretty much either collapses or reaches saturation in a given population. With Amway and wwdb, prospecting is not a one-time pitch of 30 minutes, but rather a very lengthy process that takes multiple encounters that take a couple of hours each, with a lot of phone calls and conversations in between for each potential prospect. I think the system is intentionally designed that way to keep draining IBOs of their money as they are continuing to pay monthly charges and maybe prospecting only a few people,if any, every month in the best-case scenario.

Joecool said...

Jerry, it's very common for people to stay in for at least a little while before they snap out of it and quit. It's this churn that keeps the money flowing.

I believe that the internet and easily available information that is slowing Amway's sales.