Wednesday, September 7, 2016

You Can Be Legal But Still Be A Crappy Business?

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.

10 comments:

Anonymous said...

Joe, you are being much too kind to Amway. The Amway bigshots in Ada know very well what's going on in the various AMO subsystems. They don't really care, and they don't really want to hear about it.

Try complaining to Amway about some abuse by your immediate up-line. What will their main office say? "Talk about it with your up-line." It's basically an "I Don't Give A Shit About Your Problems" attitude.

If Amway were to crack down on this abuse, the various subsystems would tell Amway to fuck off, and they'd switch to some other MLM racket along with most of their down-line. Amway's ultimate concern is income, so they back off from any kind of discipline of vicious AMO systems. That may be "legal." But it's also a sign of irresponsibility, greed, and sheer cynical indifference.

Yeah, Amway is "legal." The same way that selling swampland in Florida is legal.

Joecool said...

Yes I agree. Try googling "Amway DeVos Directly Speaking". In 1983, the Amway owner acknowledged that the tools were basically a scam but when Amway tried to rein in abuse, the big pins boycotted Amway and the sales took a big hit. After that they just looked the other way regarding the tools scam.

John Doe said...

Dexter Yager is possibly the biggest cancer to ever hit the MLM "business". I am a firm believer that Amway came out as a genuine door-to-door sales company in 1959, and then in 1964 when Dexter joined in, he found a loophole which allowed him to not have to work hard and make an extremely large amount of money.

Amway was designed to reward people for their sales, and give an incentive to grow by having successful sales people bring in and teach others how to also be successful at selling the products to retail customers. This was before the internet, price comparisons, and quality became an issue. When Dexter came into the fold, he found a way to masterfully manipulate people's psychological attitude toward the business and focused on growing the team with motivation, rather than continue to focus on retail sales. This was a much bigger payday because distributors will continuously purchase (rather than a one-time sale to a retail customer), and they will also be able to bring in more people...it was a win/win.

Obviously it has spiraled out of control, and become the modern day MLM nonsense we see today. We have groups that are completely dedicated to the art of relentless motivation, hype, and love bombing. There are 0 attempts to push sales to retail customers, because the FTC is powerless to stop these people. There are more lobbyists and politicians in these people's pockets to help ensure a stable future, and not enough people regulating or doing the jobs they were hired to do. Amway is responsible for unleashing this hydra into the community, and now it has gotten so big that nobody can stop it.

Joecool said...

When I was an IBO, our group was taught to "buy from yourselves and get others to do the same". There was no emphasis on selling products to actual customers. I believe this still happens now. And this manner of running your Amway business is an illegal pyramid, in my opinion.

John Doe said...

Joe,

I can confirm that this is the system they still use today, and it is well known as the Yager system. It is so effective at replicating itself that it has literally launched a multi-billion dollar industry and even multi-billion dollar companies, while lasting for nearly 60 years. He taught people to switch the importance of selling to consuming by claiming to give people everything they could ever want. His system tells people they will be happy, healthy, successful, rich, and many other adjectives people want to use to describe themselves. His system is designed to brainwash, corrupt, and destroy a free thinking human being by preying on their insecurities.

I equate his system to a nuclear bomb. The amount of damage and loss it has cause is staggering. The worst part is, this system seems to continually get stronger because of the new ways it can transform itself in the form of different MLMs.

Joecool said...

John,

The reason why this system works is because of human nature. Most people don't like to sell anything. So the idea of self consuming, recruiting and duplicating seems very simple and very attainable.

The problem becomes a lack of actual retail sales profits, thus IBO's make their money by recruiting enough downlines to leverage their volume. That's what makes them a product pyramid.

John Doe said...

Joe,

I actually have to correct myself. I gave Yager a bit too much credit for the system he created. His system is designed more for the manipulation and motivational deception of individuals, and is not what started the actual pyramid aspect of MLM. That was started by Nutrilite (back when it wasn't part of Amway), because they believed it would be a better sales technique to train people to think they were buying product to make money rather than selling the product. Yager's system just taught people to be happy and pay for training while continuing to buy products thinking it will create an endless amount of wealth.

Anonymous said...

Wasn't Yager in the line of Charlie Marsh? Marsh was a lunatic as well.

Anonymous said...

De Vos and Van Andel were originally involved in Nutrilite back in the 1940s, long before Amway existed. They dropped Nutrilite and founded Amway in 1959 precisely because they were afraid of impending governmental action (via the Pure Food and Drug Act) against the claims of Nutrilite. They decided that selling soap products and other cleansers was a safer bet.

Much later on, when Amway gained traction and began to grow, they figured it was safe to start hawking the Nutrilite pills again.

Dee Carter said...

When me and my husband were in amway that's what we were told to do.first Change all of our products to amways then get our friends to do the same.