Is Amway A Scam?

[icerat]

Originally Posted by jadebox

I was obviously referring to the retail markup. If it's really 30% as you say, then the per victim average income is much less than $2300. It's under $1000.

Oh I can't wait for you show the math on that. Get $2300 on volume rebates, plus another 30% on retail markup and it works out less!

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Don't change the subject. We were talking about Amway, a company that sells "business opportunities."

And it also sells nearly 500 of it's own manufactured products, and thousands of others - and it makes no money "selling the opportunity".

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You're describing a "direct buy" club.

Which is how many people, including myself, treat it.

Why is that so difficult to accept?

[Joecool]

Originally Posted by icerat

You are aware that Double X is primarily targeted as a sports supplement? That's why they have folks like Kurt Warner, Kara Goucher, AC Milan, Marta, Adam Gilchrist etc etc as spokespersons.

There is an $11.30 multi supplement, with plant extracts, called Daily as well

So why do IBOs get pitched on taking double X? In case you didn't realize this, Kurt Warner is retired from football and going to work as an NFL analyst.

And who says a person cannot simply eat a good diet and not need double x?

Why don't former IBOs take these supplements religiously if they are so good and necessary? Seems the vitamins have importance only on the quest towards going diamond.

P.S. Amway is still a lousy business opportunity regardless of whether or not double x is worth its weight in gold.

[xjx388]

Originally Posted by icerat

Amway was cheaper than costco and drugstore, but (apparently) more expensive than walmart.

They don't. The toilet paper isn't even in the catalogue targeted to customers.

Really? So IBOs don't sell the toilet paper? Why is it even on the site? Who the heck is buying it? Very interesting . . .

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So you're saying fruit and vegetables are important, but if I dry them they are not? Even when monitored for nutritional content?

Evidence?

Fruits and veggies are important. Supplements containing extracts of certain compounds have not been shown to be effective. The dried herbs and veggies they put in Double X have not been proven to have nutritional benefits. The burden of proof is on the one making a claim. I'm not making a claim. Amway (and by your defense of them, you) is making the claim that Double X provides certain benefits. There is no research to back this claim up. Therefore, we can dismiss it as unsupported. You are the one who said that there was something special about Amway's products that needed an agent to explain it. You have not shown evidence for this claim either.

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Evidence?

You don't get how this works do you? If I say that there's no evidence for psychic powers and you say there is, it's up to you to provide such evidence.

Similarly, if I say that there is no evidence that Double X is special and you say there is, it's up to you to provide the evidence.

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You are aware that almost no proprietary commercial product has openly published research to support it? There are sensible commercial reasons for that.

Pharmaceutical companies MUST provide openly published research that proves their proprietary commercial products are effective before they can be approved for medical use. Patents are what protect the profits of the company despite the fact that everyone knows what's in a particular drug.

So if the product is patented, why wouldn't they publish favorable results in a peer-reviewed journal? I can think of several reasons . . .

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So you're an expert on cardiolipin and skin treatments? There are product claims on the site. If you have evidence they are fraudulent, I encourage you to report them to the appropriate authorities.

I'm not an expert; I'm a skeptic. Supplement/face cream/toilet paper makers are free to make whatever claims they want to about their products as long as they don't claim to cure or treat a disease. This does not imply that the claims are true. As a skeptic, I insist on proof of effectiveness before I accept a particular claim. I view selling a product based on unsubstantiated claims to be a form of fraud. Unfortunately, there isn't much the authorities can do about this particular form of fraud. They can't shut down psychics either . . .

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wow. Someone says something you have no knowledge about, so therefore it's a lie? Sorry - I'm an atheist, I don't believe in an omniscient being.

No. If someone says something I have no knowledge about, I get some knowledge about it. I never dismiss something out of hand. I also don't accept claims without proof; i.e. on faith. You may be an atheist, but you do seem to have a propensity to believe unsubstantiated claims on a par with the existence of god. You have nothing to back up Amway's claims about Creme LuXury/Double X/toilet paper -but you believe, seemingly on nothing but faith, that their claims about them are true. You haven't seen the research, you can't come up with any on your own but you are unshakable in your faith. I can't argue with that . . .

[xjx388]

Originally Posted by icerat

So if I'm low on say, vitamin C, supplementing my diet with an additional apple wouldn't help?

I don't know. Do you have a problem absorbing vitamin C? Then no, eating more won't help. But if you are "low" because you don't get enough in your diet then sure, an apple will help you get more. But if you eat a balanced diet including plenty of fruits and veggies, there is very little chance you will be low.

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So are you suggesting supplements are of no use in people with undocumented deficiencies?

Such as? Supplements are not shown to be of any use in people that eat a balanced diet; they get plenty through actual food.

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Why don't you consider kale, alfalfa, apples, asparagus, blueberry, grapes , oregano, rosemary, broccoli, cranberry, horseradish, pomegranate, prune, rosemary, parsely, sage, pomegranate etc food?

I do consider them to be food. I don't consider tiny nibbles of these foods which have been dried up, processed and pressed into pill form to be food. There's a reason we don't get all our nutrition in pill form. Why not just eat more of these things in our actual diet in actual food form?

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Yup, which is why I like nutrilite, which includes food high in specific nutrients rather than isolated nutrients.

You haven't shown that the amount of dried, processed "food" in Nutrilite actually contains much nutrients.

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You are aware that Double X is primarily targeted as a sports supplement? That's why they have folks like Kurt Warner, Kara Goucher, AC Milan, Marta, Adam Gilchrist etc etc as spokespersons.

No. They have spokespeople to lend an aura of credibility. These people are getting paid to say nice things about the product. Not exactly unbiased expert opinion. . .

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So whoever pitched the NSF certification to you in that manner is an idiot. So what? NSF sports certification is about it's safety re drug tests.

I agree. How does Amway control what people say about their products? Answer: They don't. They benefit from the lies. They lie themselves about the benefits. It's all a big ball of lies.

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You've yet to actual mention a ridiculous claim?

Saying that Double X has any benefit to healthy people is a ridiculous claim. Saying that cardiolipin is "a rare lipid that helps generate skin renewal." is a ridiculous claim. Saying that Amway's products are special and need an agent to explain them is a ridiculous claim. Need I go on?

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No, a business opportunity which you claim to be terrible by doing a bogus analysis based on false assumptions.

I provided ample evidence for my claims. You continue with unfounded assertions. Present proof please, not more assertions.

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There's another one of those godwin-like statements that shows you are ignorant of how the model works. For crying out loud its (a) not even pyramid shaped (b) false to claim those "at the top" (whatever that is) make the most money.

It is a pyramid. If I have 5 people under me who each have 5 people, etc. it's a pyramid and I'm at the top. I benefit from all those people under me. I make more than the ones at the bottom. There are people above me who make even more. There are one or two people at the top who make all the money by effectively being the sponsor of everyone else. This is the reason why Amway products are so expensive; they have to chop that dollar so many times.

[Joecool]

Originally Posted by icerat

Amway was cheaper than costco and drugstore, but (apparently) more expensive than walmart.

They don't. The toilet paper isn't even in the catalogue targeted to customers.

Costco.com

http://www.costco.com/Common/Search....rch&lang=en-US

Charmin
Ultra Soft Big Roll Bath Tissue 176 shts 4pk
$4.49

[Chupacabras]

Originally Posted by icerat

Not true at all. That figure is bonuses, ...

I'd reply with a giant, bright, red, flashing question mark if I'd knew how. Its their ad, their figures. I assumed a simple mathematical point of view, but now its not true?

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Don't forget that more than half of Amway's business is in China...

Don't forget that this ad aired in America. Also by this logic, should the audience aspire to the Chinese level of life?

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Not to mention that Amway's definition of "business owner" is broad to say the least.

Well, that definitely defeats any and all arguments!

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Seriously, why do so many people think "success" is based on chance?

I don't know, maybe because if I have to choose a path in life, I'd like to "calculate" where will I end?

[icerat]

Originally Posted by Chupacabras

I'd reply with a giant, bright, red, flashing question mark if I'd knew how. Its their ad, their figures. I assumed a simple mathematical point of view, but now its not true?

So if I had 100 oranges, and I told you I had 100 oranges, and you said I had 50 apples, that would make what I said false?

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Don't forget that this ad aired in America. Also by this logic, should the audience aspire to the Chinese level of life?

So you are saying it's bad marketing to include the non-americans?

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Well, that definitely defeats any and all arguments!

The fact that them simply changing the words they use would completely negate your argument should tell you something about the strength of it.

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I don't know, maybe because if I have to choose a path in life, I'd like to "calculate" where will I end?

Yet when there's something where you can do that, like Amway or other "sales" type businesses, you instead insist it's all about "chance".

[icerat]

Originally Posted by xjx388

I don't know. Do you have a problem absorbing vitamin C? Then no, eating more won't help. But if you are "low" because you don't get enough in your diet then sure, an apple will help you get more. But if you eat a balanced diet including plenty of fruits and veggies, there is very little chance you will be low.

Sure, if.

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Such as? Supplements are not shown to be of any use in people that eat a balanced diet; they get plenty through actual food.

What percentage of people get a balanced diet?

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I do consider them to be food. I don't consider tiny nibbles of these foods which have been dried up, processed and pressed into pill form to be food.

At which point does it stop being food? When it's harvested? When it's dried? When the fibre is removed? Or just when they make it in to the shape of a tablet?

Is it the shape that stops it being food?

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There's a reason we don't get all our nutrition in pill form. Why not just eat more of these things in our actual diet in actual food form?

In general you should. It's certainly what Nutrilite recommends.

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You haven't shown that the amount of dried, processed "food" in Nutrilite actually contains much nutrients.

You haven't shown that food contains much micronutrients either.

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No. They have spokespeople to lend an aura of credibility. These people are getting paid to say nice things about the product. Not exactly unbiased expert opinion.

I never said they were "unbiased expert opinion". I said they were spokespeople to aid in marketing to sports people.

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I agree. How does Amway control what people say about their products? Answer: They don't. They benefit from the lies. They lie themselves about the benefits. It's all a big ball of lies.

The only "lie" you've mentioned is claiming someone told you NSF sport certification says something about efficacy.

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Saying that Double X has any benefit to healthy people is a ridiculous claim.

Saying that everyone is eating well and getting all their nutrient needs from their diet is a ridiculous claim

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Saying that cardiolipin is "a rare lipid that helps generate skin renewal." is a ridiculous claim.

Are you an expert on skin renewal?

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I provided ample evidence for my claims. You continue with unfounded assertions. Present proof please, not more assertions.

You've provided not a single piece of evidence for any of your claims.

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It is a pyramid. If I have 5 people under me who each have 5 people, etc. it's a pyramid and I'm at the top.

In business terms that's not a pyramid. That might be a pyramid shaped organizational structure. They are common in the business world.

It also isn't remotely what an Amway business like.

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I benefit from all those people under me.

No you don't.

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I make more than the ones at the bottom.

Not necessarily

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There are people above me who make even more.

You just said you were "at the top". Now there's people "above" you?

In any case, in Amway there may be people "above" you that make more money than you, there may be people "above" you that make less than you

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There are one or two people at the top who make all the money by effectively being the sponsor of everyone else.

Not even remotely close to reality

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This is the reason why Amway products are so expensive; they have to chop that dollar so many times.

Not even remotely close to reality, as has already been pointed out, with independent references, multiple times on this thread.

[oggiesnr]

The UK earnings figures are here UK Disclosure as required by the Courts.

The terms of the UK court case specifically means that tools cannot be sold. I must say that these figures don't encourage me to believe that Amway in the UK is a viable business opportunity.

Steve

[icerat]

Originally Posted by oggiesnr

The UK earnings figures are here UK Disclosure as required by the Courts.

The terms of the UK court case specifically means that tools cannot be sold.

No, they just have to be approved and distributed by Amway. Note that the Amway model is a bit different in the UK to the US.

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I must say that these figures don't encourage me to believe that Amway in the UK is a viable business opportunity.

Why? €2664/mth is pretty handy income for a part-time business. Indeed a lot of people would find an extra €132 pretty handy as well, not to mention whoever earned €4,865 and hadn't even reached "business consultant".

Note of course that averages are dragged down by new qualifiers at a particular level, who obviously with a new business will usually have lower than average incomes. In none of these statistics is the time factor incorporated.

[NewtonTrino]

Originally Posted by icerat

Why? €2664/mth is pretty handy income for a part-time business. Indeed a lot of people would find an extra €132 pretty handy as well, not to mention whoever earned €4,865 and hadn't even reached "business consultant".

Of course calling it part time is silly because you have no stats on how many hours these people work.

And €2664/mth is a pretty crap income. If I'm starting a business it better be generating way more than I can make working a lower middle class job. Otherwise whats the point.

[xjx388]

Originally Posted by icerat

Sure, if.

What percentage of people get a balanced diet?

I would say that most people get enough nutrients in the food they eat. Vegetarians, people on certain diets, people with certain malabsorption conditions -not so much. But the incidence of vitamin and mineral deficiency in modern society is pretty low. In any case, people that need supplements can take a generic multi and it will be just as effective as Double X.

But you said that there was something special about Double X that needed to be explained to people and that was the phytonutrients. First of all, these are available much cheaper in your local supermarket or Wal-Mart. Additionally, there is no evidence that taking them in supplement form will provide any nutritional benefit. So again, I ask, what is so special about Double X that requires an agent to explain?

Another question: Who is training these agents; i.e., what makes them expert enough to tell me the benefits of phytonutrients? It seems to me they are just regurgitating Amway's marketing fluff regardless of whether it's true or not. This is not far removed from lying.

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At which point does it stop being food? When it's harvested? When it's dried? When the fibre is removed? Or just when they make it in to the shape of a tablet?

Is it the shape that stops it being food?

Yes. It's the shape.

Let's assume it's always food. Let's further assume that nothing essential was lost during the drying, processing and packaging process. For example, what good is 35mg of any food going to do? That's not even a good nibble! It certainly isn't enough to give any of the benefits that you would get from eating, say, a whole actual serving of kale. And, all combined, I'm not even getting a full gram of food from that pill. So the nutritional benefits of that food are going to be pretty close to nil, if not actually nil. So including them in the Double X formulation is nothing but a marketing ploy to make it look like it's including all these wonderful fruits and veggies that are beneficial while in actuality including absolutely nothing.

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Are you an expert on skin renewal?

Is the agent who is selling it to me an expert? You said that Creme LuXury was so special that an agent had to explain the benefits. If that agent isn't a dermatologist (or has similar credentials) then why should I believe anything they say? Again, the agent is just regurgitating the standard marketing fluff from Amway. But you asked about me personally. I'm informed about skin care in general, but certainly not an expert. I do know, for instance, you can get tretinoin (Retin-A) from your doctor. Tretinoin has a documented mechanism for causing "skin renewal," and you can easily find the research with some quick Google-Fu. Cardiolipin, not so much. OTC retinol is similar to tretinoin (in that all retinoids are chemically related to Vitamin A), but much less effective and I'm sure that even it has more "skin renewal" benefits than cardiolipin.

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You've provided not a singleI've ignored or dismissed every piece of evidence for any of your claims.

FTFY. You can't just ignore or dismiss basic math.

You want to make a semantic distinction between an Amway "business" and someone who just joins Amway to get a discount. Fair enough -IF you can provide some hard evidence that most people join only to get a discount. Your insistence that most people don't try to make money is not evidence. I have presented evidence that Amway 1)Pitches an IBO as a legitimate business opportunity, 2)Specifically prohibits pitching IBOs as a buyers club. Therefore, I think it's reasonable to conclude that most people who start an IBO have some expectation of making money. The fact that most people DO NOT make money is evidence that Amway is a poor business opportunity.

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No you don't.
Not necessarily

I sponsor 10 people and their sales volume is added to mine to increase my bonus. See page A-2 of the Business Reference Guide. Therefore, it would be very difficult, but not impossible, for someone in my downline to make more than me.

Of course, all of this assumes that I have a downline and they have a downline. In reality, most IBOs don't have a downline nor do they sell any products so the point is really moot.

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You just said you were "at the top". Now there's people "above" you?

In any case, in Amway there may be people "above" you that make more money than you, there may be people "above" you that make less than you

Unless I started the pyramid, there are people above me. Everyone in Amway is sponsored by someone except for the person(s) who started it. Those who sponsor more people generate more income; it's the way the model is set-up. Do you disagree?

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Not even remotely close to reality.

The Amway Corporation and its private owners are at the top of the pyramid. They make the real profits.

Directly under Amway, there are the Founders Crown Ambassadors, the top IBO level. Only .01% of "active" IBOs qualified as Founders Diamond or above so we can make a reasonable guess that FCAs are a much smaller percentage of this number -a handful throughout the world at most.

Since everyone in Amway is sponsored by someone else, the sponsorship chain runs down from Amway to the FCAs to the guy who just signed up today. The FCAs make the multi-millions the guy who just signed up today makes zero.

So what do the people in-between the FCAs and the guy who signed up today make? Since only .5% of "active" IBOs qualify as Gold or above we can be sure that 99.5% of "active" IBOs make significantly less than $12,303/yr (by definition, inactive IBOs make $0). By simple math, which has been demonstrated earlier, we can make a reasonable guess that the average income for those 99.5% of "active" IBOs below gold must be very close to zero.

Now, if you can look at those numbers and find a real business opportunity there, then good luck to you. But I can predict with reasonable certainty, based on the evidence we have, that anyone who starts an Amway business today will make $0 in profit.

My reference is Amway's own material. Please tell me exactly how I'm wrong using these or your own references.

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Not even remotely close to reality, as has already been pointed out, with independent references, multiple times on this thread.

You have given your opinion many times, but you have failed to back it up except with other opinion pieces and assertions that I'm wrong. We need real data. Find some and present it.

[Joecool]

Originally Posted by NewtonTrino

Of course calling it part time is silly because you have no stats on how many hours these people work.

And €2664/mth is a pretty crap income. If I'm starting a business it better be generating way more than I can make working a lower middle class job. Otherwise whats the point.

I recall many times, our upline would tell us that in order to succeed, you had to eat sleep and crap Amway. In other words, you needed to be doing Amway all the time, save for when you are working your job. Even on a day off, your radar should be on, looking for potental business partners. So the part time deal is bunk. How many diamonds go on stage and talk about the 8 hours a week they spent on their quest. All the diamonds I heard of spoke about the extra time and devotion needed to make it to the next level.

Amway is a poor business opportunity by design. The unfair pyramidal compensation plan. The tool system that doesn't work, but systematically drains IBOs of their resources one function or one standing order at a time.

[Almo]

Originally Posted by Chupacabras

One of my pet peeves:

This ad here http://www.youtube.com/watch?v=8cNzVH9zg00 says Quixtar makes 6.8 Billion, and helps over 3 million people own their own biz. A quick divide (rounding to 3 million) yields $2,267 each owner.

Me saying that started one of the biggest threads in the whole forum:

http://www.internationalskeptics.com...d.php?t=116252

[Joecool]

Quote IceraT:
You've provided not a singleI've ignored or dismissed every piece of evidence for any of your claims.

Originally Posted by xjx388

I FTFY. You can't just ignore or dismiss basic math.

You want to make a semantic distinction between an Amway "business" and someone who just joins Amway to get a discount. Fair enough -IF you can provide some hard evidence that most people join only to get a discount. Your insistence that most people don't try to make money is not evidence. I have presented evidence that Amway 1)Pitches an IBO as a legitimate business opportunity, 2)Specifically prohibits pitching IBOs as a buyers club. Therefore, I think it's reasonable to conclude that most people who start an IBO have some expectation of making money. The fact that most people DO NOT make money is evidence that Amway is a poor business opportunity.

If "most" people sign up and do nothing, doesn't that indicate some kind of problem in itself? I have heard of people signing up just to get their friend or cousin off their back about Amway. These folks normally don't complain or ask for their money back. This is something that Icerat claims as evidence that everything is fine in Amwayland. Note: Amway doesn't count the do nothing people when figuring their average IBO income.

Since the Amway opportunity is presented as a business opportunity, the only conclusion to make is that people join to make money. Nobody opens a McDonald's to get cheaper burgers. They do it to make some income. Even out of the IBOs who make an effort to profit and sponsor others, even those IBOs have a less than 1% success rate. A REAL businessman wouldn't even consider opening a business with an opportunity with that track record.

What Icerat is trying to do is to justify business failures by claiming that the ones who don't/can't sponsor and sell Amway's products are simply part of some buyer's club. The fact is that Amway's products are priced too high (in general) and the justification for IBOs is that the products are special or rare and needs an IBO to explain the special benefits of the product. Or to justify the smaller packages by saying that Amway is concentrated. A simple walk down the aisles of WalMart would put Amway's prices to shame.

It's also a wonder why Icerat defends Amway when he himself has not accomplished much in Amway, and by his admission, hasn't really done much about it.

[jadebox]

Originally Posted by icerat

Oh I can't wait for you show the math on that. Get $2300 on volume rebates, plus another 30% on retail markup and it works out less!

No one said anything about "volume rebates." Your attempts at obfuscation just make your arguments even less convincing (which, I guess, is quite an accomplishment in itself).

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And it also sells nearly 500 of it's own manufactured products, and thousands of others - and it makes no money "selling the opportunity".

Amway makes money selling stuff for others to resell as a "business opportunity." But, as you, yourself have admitted, very few people actually make money from it. Does that make it a scam? I think so.

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Why is that so difficult to accept?

You haven't offered any evidence that it's true ... and it contradicts what Amway itself says.

-- Roger

[jadebox]

Originally Posted by Joecool

It's also a wonder why Icerat defends Amway when he himself has not accomplished much in Amway, and by his admission, hasn't really done much about it.

Has anyone written a book on the psychology of internet "trolls?" It seems that it would be an interesting subject.

-- Roger

[xjx388]

Originally Posted by icerat

Why? €2664/mth is pretty handy income for a part-time business. Indeed a lot of people would find an extra €132 pretty handy as well, not to mention whoever earned €4,865 and hadn't even reached "business consultant".

Note of course that averages are dragged down by new qualifiers at a particular level, who obviously with a new business will usually have lower than average incomes. In none of these statistics is the time factor incorporated.

From the numbers in the paper, we can see that there were a total of 20,960 ABOs in the UK and Ireland during the last fiscal year. We can also see that:

9,177 (43.78%) of those ABOs made £0.
5,522 (26.35%) made an average of £42.
6,211 (29.63%) made an average of £114
50 (.24%) made an average of £2,300

Which means that the 11733 ABOs below Business Consultant level who got a bonus earned an average of (231,924+708,054)/(11733) = £80.11. The highest earner earned £4200 and the lowest earned £5. Basic math will tell you that the more people at the £4200 end of the scale, the less that can earn the average of £80.11. For example, if the top 50 earners averaged £4000, this would reduce the overall average earnings to £63. If the top 100 earners earned £3000, the average would fall to £55. So the numbers suggest that there are a relative handful of people at the top who make money and the vast majority do not, even though they are active.

It's also pretty telling that only 12 new ABOs qualified to be Business Consultants (Platinum level or above in the US) during the last fiscal year.

So the numbers that Amway themselves gives us tells us all we need to know about how viable a business opportunity this is. I think you know where I stand . . .

[icerat]

Originally Posted by jadebox

No one said anything about "volume rebates."

Ummm, that's what the figure you reported was.

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Your attempts at obfuscation just make your arguments even less convincing (which, I guess, is quite an accomplishment in itself).

I haven't obfuscated anything. Please educate yourself about the model before making claims about it.

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Amway makes money selling stuff for others to resell as a "business opportunity." But, as you, yourself have admitted, very few people actually make money from it. Does that make it a scam? I think so.

Amway makes money selling stuff. What people do with it then is up to them. Most simply use it themselves, which I think you would agree is not "a business".

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You haven't offered any evidence that it's true ... and it contradicts what Amway itself says.

I have offered evidence it's not true, it continuously gets ignored. I did it all again in a long reply to xjx388, then my damn browser crashed and took it with it

I'd note though the extreme skepticism to all of Amway's claims except one - when it comes to their use of the term "business owner", where you prefer their marketing screed over, for example the IRS or court statements.

[icerat]

Originally Posted by xjx388

From the numbers in the paper, we can see that there were a total of 20,960 ABOs in the UK and Ireland during the last fiscal year. We can also see that:

Why do you think people like myself (I'm registered with Amway in the UK) who don't even have 5 customers and €150 in over a year (and haven't attempted to) should be making money?

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So the numbers that Amway themselves gives us tells us all we need to know about how viable a business opportunity this is. I think you know where I stand . . .

It tells us you believe success in a business opportunity should not include hard work over time. It tells us you believe that people with small goals, who achieve them, are "failures".

I think you know where I stand on that.

[xjx388]

Originally Posted by icerat

I'd note though the extreme skepticism to all of Amway's claims except one - when it comes to their use of the term "business owner", where you prefer their marketing screed over, for example the IRS or court statements.

No. You have it wrong. I am extremely skeptical of Amway's claims of "business ownership." That's what I've spent most of this thread saying. It is not, in actuality, a real "business opportunity," precisely because no one makes any money at it. Therefore, Amway is selling nothing but a pipe dream. I am directly attacking their "marketing screed."

So if they are lying about the opportunity and they are lying about the products what are we left with? One big lie!

You see, Amway can't openly admit that most people start an IBO simply as a buyers club. These people don't know anything about how an actual business operates and the IRS makes it clear that they are not actual businesses when they try to claim business expenses. But if Amway openly admits this, then they are basically admitting that they are a pyramid scheme according to the definition set forth in In re Amway. If Amway is a buyers club, this means that no one is following the 10 customer rule or 70% rule. In other words, the "business opportunity" is an artifice to avoid the wrath of the FTC.

[xjx388]

Originally Posted by icerat

Why do you think people like myself (I'm registered with Amway in the UK) who don't even have 5 customers and €150 in over a year (and haven't attempted to) should be making money?

I don't. You haven't demonstrated that most people are like you. Since Amway sells itself as a business opportunity and people aren't allowed to market it as a buyer's club, I tend to think that most people expect to make a little money selling Amway and signing people up as IBOs. I suspect that most people do put some effort into selling product and sponsoring people but quickly find that they can't. I know for a fact that a large percentage of these people are told that "can't" means "won't," sold motivational tapes and seminars to "help" them and are thus sucked into the AMOs (or whatever they call them now).

How do I know this is common? I have the evidence of numerous Tax Court cases where people try to deduct "business expenses" from something that doesn't qualify as a business. I have the many testimonials online. I have personal experience with a group in Texas.

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It tells us you believe success in a business opportunity should not include hard work over time.

Wrong. I believe a business opportunity should reward the hard work of most people who enter it. If I save my money and open a McDonald's, I will be successful if I work hard at it. If I use my expertise and passion to open a doctor's office, I will be successful if I work hard at it. But if I start an IBO, the numbers prove that I will not be successful no matter how hard I work at it.

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It tells us you believe that people with small goals, who achieve them, are "failures".

Wrong again. I don't consider them failures . . . I consider them largely nonexistent. You have yet to show evidence that these people even exist. You are making an assumption based on your own motivations. I'd wager that most people who get a Microsoft Resellers certificate actually plan to sell Microsoft stuff. Just because you don't doesn't mean everyone else thinks like you do.

ETA: I have a friend who got suckered into selling Primerica. She is very earnest in this pursuit; her goal is to make $500/month to supplement her two-income family. She's been at it for about three months and hasn't seen a dime. She is strongly considering dropping it. She made that much simply waiting tables, which was her second job before she got suckered. She feels stupid, but doesn't want to admit that the "friend" that got her involved in Primerica may have led her astray. She blames herself. I wager that most people who start Amway are more like her than you.

[marplots]

The number of failures alone isn't enough to make the claim scam or "not a business opportunity." I say this because I participate in an online freelance brokered site with hundreds of thousands signed up, but barely 10% making any money at all. The failure rate is tremendous, but it's still an opportunity.

The critical difference between the site I pull about $15G a year from and Amway is that my income is not based on what others do to try and get ahead. I leach no money off anyone else's efforts. The concept of a downline is inherently one of victimization of those beneath you on the pyramid. It is not the same as a wholesale chain, it is fundamentally leveraging the false hopes of others to your advantage.

This is where the evil is and this evil is not diluted by the amount of good (if any) brought into the mix.

[marplots]

Originally Posted by xjx388

ETA: I have a friend who got suckered into selling Primerica. She is very earnest in this pursuit; her goal is to make $500/month to supplement her two-income family. She's been at it for about three months and hasn't seen a dime. She is strongly considering dropping it. She made that much simply waiting tables, which was her second job before she got suckered. She feels stupid, but doesn't want to admit that the "friend" that got her involved in Primerica may have led her astray. She blames herself. I wager that most people who start Amway are more like her than you.

Wait. Isn't Primerica a buyer's club? Cause I hear that makes it all better.

[xjx388]

Originally Posted by marplots

The number of failures alone isn't enough to make the claim scam or "not a business opportunity." I say this because I participate in an online freelance brokered site with hundreds of thousands signed up, but barely 10% making any money at all. The failure rate is tremendous, but it's still an opportunity.

The critical difference between the site I pull about $15G a year from and Amway is that my income is not based on what others do to try and get ahead. I leach no money off anyone else's efforts. The concept of a downline is inherently one of victimization of those beneath you on the pyramid. It is not the same as a wholesale chain, it is fundamentally leveraging the false hopes of others to your advantage.

This is where the evil is and this evil is not diluted by the amount of good (if any) brought into the mix.

This is a good point, I think. The stock market isn't "evil" because a lot of people lose their shirts when the market tanks. But Ponzi schemes like Bernie Madoff's are evil because they depend on gaining people's confidence despite the fact that there is nothing but fluff underlying the scheme. That's why these things are called "confidence tricks" or "cons." Amway is not far removed from this.

[icerat]

Originally Posted by xjx388

No. You have it wrong. I am extremely skeptical of Amway's claims of "business ownership."

And yet you insist on analysing statistics with the assumption that all IBOs are operating businesses, contrary to the findings of BERR, FTC, and common sense

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That's what I've spent most of this thread saying. It is not, in actuality, a real "business opportunity," precisely because no one makes any money at it.

And here you claim "no one makes any money at it" despite yourself citing sources which shows some people make millions.

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But if Amway openly admits this, then they are basically admitting that they are a pyramid scheme according to the definition set forth in In re Amway.

Utter BS. Here is the definition from FTC vs Amway -

The Commission had described the essential features of an illegal pyramid scheme:
Such schemes are characterized by the payment by participants of money to the company in return for which they receive (1) the right to sell a product and (2) the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of the product to ultimate users.

The FTC went on to conclude this does not apply to Amway.

The commission in FTC vs Amway was very clear that it understood a lot of volume was from personal consumption, and it's not hidden. Quixtar (and many other MLMs) even pointed it out to the FTC in their response to their proposed business opportunity rule a few years ago -

Many customers become distributors in order to purchase products at wholesale prices. These distributors typically do not sponsor other distributors or engage in other business building activities. These distributors may receive ovenides on their personal purchases but are, in reality, consumers rather than business-builders

FTC vs Amway, findings -

In fiscal 1973/*74 the average BV for each distributor was about $33 a month. (CX 517*F, Z*95) Much of this amount is consumed by the distributors themselves rather than resold. The distributors obtain Amway products with about a 30% discount off the retail price. Many of them consume large amounts of the products every month
...
The average Amway distributor sells far less than $200 a month. (Finding 137) The vast majority of Amway distributors are in the business part*-time. Only one in four sponsors other distributors, and many apparently are distributors in order to buy Amway products** at about a 30% discount **which they consume.

In the FTC report on it's proposed business opportunity rule -

many commenters point out that MLM participants use their membership to purchase products at a discount for their own personal consumption.
(one of the sources they reference was Quixtar)

In a 2004 official FTC advisory -

Much has been made of the personal, or internal, consumption issue in recent years. In fact, the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme

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If Amway is a buyers club, this means that no one is following the 10 customer rule or 70% rule.

Your insistence in maintaining this false dichotomy of buyers club or business opportunity is past irritating and evidence of the bankruptcy of your argument.

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In other words, the "business opportunity" is an artifice to avoid the wrath of the FTC.

Oh yeah, poor old FTC has had the wall pulled over their eyes.

[icerat]

Originally Posted by marplots

The concept of a downline is inherently one of victimization of those beneath you on the pyramid.

how?

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It is not the same as a wholesale chain, it is fundamentally leveraging the false hopes of others to your advantage.

how?

(I note that your conclusion includes an assumption of "false hope".)

I note (again) FTC vs Amway, findings of the commissioner -

The Amway system does not create the potential for massive deception present in a pyramid distribution scheme which relies primarily on the profits to be made from recruiting new distributors rather than from ultimate sales to consumers. Unlike the pyramid companies, Amway and its distributors do not make money unless products are sold to consumers. The inherent potential for deception is not present in the Amway plan. In the full context of the plan, it does not have an unlawful capacity to deceive.

[Joecool]

Originally Posted by icerat

how?



how?

(I note that your conclusion includes an assumption of "false hope".)

I note (again) FTC vs Amway, findings of the commissioner -

The Amway system does not create the potential for massive deception present in a pyramid distribution scheme which relies primarily on the profits to be made from recruiting new distributors rather than from ultimate sales to consumers. Unlike the pyramid companies, Amway and its distributors do not make money unless products are sold to consumers. The inherent potential for deception is not present in the Amway plan. In the full context of the plan, it does not have an unlawful capacity to deceive.

From Wikipedia:

In a 1979 ruling,[15][77] the Federal Trade Commission found that Amway does not qualify as a pyramid scheme because distributors were not paid to recruit people and had to sell products to get bonus checks, and the company was committed to buying back its distributors' excess inventory.[78]

The FTC did, however, find Amway "guilty of price-fixing and making exaggerated income claims";[79] the company was ordered to stop retail price fixing and allocating customers among distributors and was prohibited from misrepresenting the amount of profit, earnings or sales its distributors are likely to achieve with the business. Amway was ordered to accompany any such statements with the actual averages per distributor, pointing out that more than half of the distributors do not make any money, with the average distributor making less than $100 per month. The order was violated with a 1986 ad campaign, resulting in a $100,000 fine.[80][

[Chupacabras]

Originally Posted by icerat

So if I had 100 oranges, and I told you I had 100 oranges, and you said I had 50 apples, that would make what I said false?

But that's not what happened. Amway said "we have this much money and this many people" and then you said it wasn't true at all.

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... you instead insist it's all about "chance".

But I didn't say "all". Just this business model against a paid job. Just that and no more.

Evasion noted, responding with questions, not answers.

Almo made my day by pointing to that thread he started in 2008. Its fun to "see" me! BTW, Icerat's take on the very same arguments is different.

Oh well.

[icerat]

Originally Posted by Chupacabras

But that's not what happened. Amway said "we have this much money and this many people" and then you said it wasn't true at all.

I said no such thing. What I said was it's wrong to assume all of those people are working hard trying to generate significant incomes

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But I didn't say "all". Just this business model against a paid job. Just that and no more.

Here's a hint - if I use "it's all" in the context of this discussion, "it" refers to the business model.

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Almo made my day by pointing to that thread he started in 2008. Its fun to "see" me! BTW, Icerat's take on the very same arguments is different

I doubt it's changed much, but I've learned stuff in the last 3 years, have you?

[jadebox]

Deleted ....

This game is getting tedious. It's no fun any more. :-)

-- Roger

[xjx388]

Originally Posted by icerat

And yet you insist on analysing statistics with the assumption that all IBOs are operating businesses, contrary to the findings of BERR, FTC, and common sense

I'm going on the only assumption I can logically make, since Amway forbids marketing it as a Buyers Club and because Amway requires people to run it as a business. Again, just because YOU run it as a discount club doesn't mean that this is the way most people who start an IBO run it.

The facts show (all those tax court cases) that a great deal of people think of it as a business and try to run it as such based on their limited knowledge and get busted by the IRS for trying to deduct business expenses. This is evidence that Amway is not ACTUALLY selling a business opportunity and it knows this.

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And here you claim "no one makes any money at it" despite yourself citing sources which shows some people make millions.

OK, fine, I will correct myself: A select few people at the top of the pyramid are making millions, another few are making thousands under them and the vast majority are making nothing.

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Utter BS. Here is the definition from FTC vs Amway -

The Commission had described the essential features of an illegal pyramid scheme:
Such schemes are characterized by the payment by participants of money to the company in return for which they receive (1) the right to sell a product and (2) the right to receive in return for recruiting other participants into the program rewards which are unrelated to sale of the product to ultimate users.

The FTC went on to conclude this does not apply to Amway.

So Amway is not an illegal pyramid scheme. I never said it was. I do say that it is a legal pyramid scheme. An example of what I mean: Loan sharks are illegal lenders. Payday loan companies are legal lenders. But I wouldn't recommend that any one ever actually go to a payday loan company no matter how much they needed money. Payday loans take advantage of people by charging them extremely high interest rates -but not illegal interest rates. They stay just under the legal limit. In short, payday loans are legalized scams. So are title loans. So are pawn shops.

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The commission in FTC vs Amway was very clear that it understood a lot of volume was from personal consumption, and it's not hidden...

<snipperoni>

Much has been made of the personal, or internal, consumption issue in recent years. In fact, the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme

Your insistence in maintaining this false dichotomy of buyers club or business opportunity is past irritating and evidence of the bankruptcy of your argument.

If Amway was solely a way to get Amway products at a discount (you join, you get 30% off; i.e., a buyer's club) that would be just fine. But one of the papers you quoted says this:

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The purchase of goods and services within such a system [a buyers club] can, therefore, be distinguished from a pyramid scheme on two grounds. First, purchases by the club's members can actually reduce costs for everyone (the goal of the club in the first place). Second, the purchase of goods and services is not merely incidental to the right to participate in a money-making venture, but rather the very reason participants join the program. Therefore, the plan does not simply transfer money from winners to losers, having the majority of participants with financial losses.

Amway sells itself as a business opportunity, which explicitly makes it a money-making venture. Purchasing Amway products for personal use is therefore merely incidental to the right to participate in a money-making venture. Most people join to make money but they don't want to sell, they are told to just buy for themselves and recruit others to do the same. That is the actual model for the vast majority of people, which is why the vast majority don't make money. So if Amway allowed people to run it this way, it would be found to be an illegal pyramid. As it stands, Amway has all the right words and policies to make it legal, but it is still run as if it was an illegal pyramid scheme. Which is why I say it's a legal pyramid scheme.

[Joecool]

Originally Posted by xjx388

Amway sells itself as a business opportunity, which explicitly makes it a money-making venture. Purchasing Amway products for personal use is therefore merely incidental to the right to participate in a money-making venture. Most people join to make money but they don't want to sell, they are told to just buy for themselves and recruit others to do the same. That is the actual model for the vast majority of people, which is why the vast majority don't make money. So if Amway allowed people to run it this way, it would be found to be an illegal pyramid. As it stands, Amway has all the right words and policies to make it legal, but it is still run as if it was an illegal pyramid scheme. Which is why I say it's a legal pyramid scheme.

Amway (or their representatives) does sell itself as a business opportunity. Icerat can claim all he wants that "most" IBOs are actually duscount buyers, but how do we distinguish the two? For one, there are meetings going on all over the US, along with one on one person to person meetings, for the purpose of recruiting others into the Amway business. In the various meetings I witnessed and have heard about from others, it was pitched as a big business opportunity. Just change your buying habits and you can make it big.

There was NO MENTION of joining Amway to make a hundred bucks a month or joining just to get a discount on products. Now I am not saying these people don't exist, but it is very evident that Amway is not pitched that way.

In fact, the folks who join just to buy Amway stuff are benign. The REAL SCAM is getting the hopes and dreams of young and/or aspiring people up, and then telling them that "tools are optional, but so is success", and then selling them these tools that produce insignificant results. It's basically a bait and switch scam. You sell hopes and dreams via the Amway business, but the real money is made selling tools to build the Amway business. Since the tools have a higher margin that Amway products, anyone can conclude that there is more profit in tools than in laundry detergent.

The fact that Icerat doesn't see this makes me believe that he doesn't want to see this or he is somehow getting benefits to deflect the facts.

[icerat]

Originally Posted by xjx388

I'm going on the only assumption I can logically make, since Amway forbids marketing it as a Buyers Club and because Amway requires people to run it as a business.

Amway does not require people to run it as a business. Your error there has already been pointed out to you.

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Again, just because YOU run it as a discount club doesn't mean that this is the way most people who start an IBO run it.

No, it doesn't. But the FTC case, BERR case, Quixtar's own statements, Amway Japan's distributor survey, DSA surveys, Quixtar statistics presented in TEAM vs Quixtar etc etc all suggest it is.

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The facts show (all those tax court cases)

There are very few tax court cases. Certainly not enough to extrapolate to millions. In any case they support the assertion of people not treating it as a business.

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OK, fine, I will correct myself: A select few people at the top of the pyramid are making millions, another few are making thousands under them and the vast majority are making nothing.

Again you just demonstrate ignorance. If you drew out the worldwide line of sponsorship, none of the top 10 (probably none of the top 100), are anywhere near "the top".

What you are describing is a pyramid scheme. Amway is not a pyramid scheme. You can join tomorrow and make more than anyone "above" you. This isn't even difficult to work out yourself if you bothered to study the compensation plan.

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So Amway is not an illegal pyramid scheme. I never said it was. I do say that it is a legal pyramid scheme.

There is no such thing. Pyramid schemes are, by definition, illegal.

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If Amway was solely a way to get Amway products at a discount (you join, you get 30% off; i.e., a buyer's club) that would be just fine. But one of the papers you quoted says this:

No idea what your point is. What's the "but"? Why does it have to be *solely* a way to get a discount? You do realise I can join CostCo, a buyers club, and recruit people to resell the products at a markup? Does that mean CostCo is no longer a buyer's club?

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Amway sells itself as a business opportunity, which explicitly makes it a money-making venture. Purchasing Amway products for personal use is therefore merely incidental to the right to participate in a money-making venture.

Rubbish. CostCo advertises itself as a members club, doesn't stop me reselling their stuff. What matter with regard Amway is motive for purchase, as the FTC staff advisory made clear.

I'd note that Amway also does an awful lot of product marketing, way way more than it does promoting itself as a business opportunity.

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Most people join to make money but they don't want to sell, they are told to just buy for themselves and recruit others to do the same.

False. The organisation I affliated with is the largest in the world and explicitly teaches the need for retail sales. In the UK you can't even sponsor without having established at least 5 customers and €150 in retail customer sales, and you won't get paid a bonus unless you maintain this. In the US you need to have a minimum of 50PV of registered volume from customers in order to earn a bonus. Similar rules and requirements exist around the world. In the past in the US (and still in some countries) it was the job of the direct/platinum to enforce this, which made for easy abuse, and some did. An entire group got kicked out of Amway US partially due to this problem a few years ago. With the advent of internet tracking IBOs have to go out of their way to provide false information and defraud Amway if they do this. I have an IBOship in the US. It regularly generates enough volume to qualify for bonuses if I had enough qualifying customer volume there. I dont', so I don't get any bonuses.

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That is the actual model for the vast majority of people, which is why the vast majority don't make money.

More assertions backed by no sources and contradicted by sources provided.

As the stats I've already provided show, only around 1 in 8 ever sponsor anyone and you really need to sponsor two to make any money this way. If you do not sponsor (wholesale sales) and do not retail (retail sales) there is no way to make money.

Only 9% actively retail (BERR vs Amway UK). Only 12.9% sponsor (TEAM vs Quixtar).

60% of volume comes from people not actively retailing (BERR vs Amway UK).

Yet you insist all these people, like myself, that are ordering products for themselves, renewing their membership, but neither sponsoring nor retailing are running businesses. Uhuh.

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So if Amway allowed people to run it this way, it would be found to be an illegal pyramid.

Your head is going to explode if you keep this up. The FTC letter you yourself quoted above explicitly says otherwise, something you choose to ignore. IMO (and Amway's) it's not a smart way to run a business, but it doesn't make it a pyramid.

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As it stands, Amway has all the right words and policies to make it legal, but it is still run as if it was an illegal pyramid scheme. Which is why I say it's a legal pyramid scheme.

So it's a legal illegal scheme. Yeah, that makes sense.

The sine qua non of a pyramid scheme is being paid for recruiting (Webster v Omnitrition). For you to establish Amway is a pyramid scheme (which means it's illegal) you need to establish that product sales are merely a cover for payment for recruiting. Good luck with that.

[marplots]

To be fair, I'd like to point out that tools (at least the inspirational tapes) have a kind of value beyond their ability to generate income. I went through dozens and found them entertaining and motivating. I didn't pay for them, so there's that, but they were at least as interesting as some talk radio stations or good old fashioned fire-and-brimstone preaching.

I remember reading somewhere that the best predictor of whether someone would buy a self-help book was if they had purchased a self-help book in the last six months. This makes me think there's an odd kind of value beyond any real world results.

As soon as I could no longer listen for free, I quit listening. For me, there wasn't enough value.

Then there's probably some kick people get by feeling they are part of a highly motivated, hard-charging entrepreneurial team... some social value. I didn't get this because I wasn't attracted to the most successful I saw -- in fact, they repelled me.

I just wanted to point out that while I've been using money as the sole measurement, there are other things to consider.

[Joecool]

Originally Posted by icerat

False. The organisation I affliated with is the largest in the world and explicitly teaches the need for retail sales. In the UK you can't even sponsor without having established at least 5 customers and €150 in retail customer sales, and you won't get paid a bonus unless you maintain this. In the US you need to have a minimum of 50PV of registered volume from customers in order to earn a bonus. Similar rules and requirements exist around the world. In the past in the US (and still in some countries) it was the job of the direct/platinum to enforce this, which made for easy abuse, and some did. An entire group got kicked out of Amway US partially due to this problem a few years ago. With the advent of internet tracking IBOs have to go out of their way to provide false information and defraud Amway if they do this. I have an IBOship in the US. It regularly generates enough volume to qualify for bonuses if I had enough qualifying customer volume there. I dont', so I don't get any bonuses.

In the US you need 50 PV to earn a bonus.

Amway: Did you have 50 PV
IBO: Yes
Amway: Okay you get a bonus

Amway doesn't enforce the 50 PV rule. An IBO as far as I know, just clicks a box to say they met the 50 PV rule. That's really difficult. In fact, when they had the ten customer, my sponsor told me to ignore it.

Is there any evidence to suggest that Network 21 IBOs have more sales to non IBOs? *crickets chirping*

[Joecool]

Originally Posted by icerat

What you are describing is a pyramid scheme. Amway is not a pyramid scheme. You can join tomorrow and make more than anyone "above" you. This isn't even difficult to work out yourself if you bothered to study the compensation plan.

I call BULL on this one. While you can make more than your sponsor, it's because most people, by Icerat's own admission, do nothing or very little. Can Icerat name a single person who's joined and outearned one of the Crown Ambassador Kingpins like Britt, Dornan, or Yager? *crickets chirping*

The reason why diamonds seperate from their beloved "mentors" is because their beloved mentors don't give them a big enough cut from the tools profits. There are lawsuits over these issues and many instances of a diamond breaking away from their former groups.

[icerat]

Originally Posted by marplots

To be fair, I'd like to point out that tools (at least the inspirational tapes) have a kind of value beyond their ability to generate income. I went through dozens and found them entertaining and motivating. I didn't pay for them, so there's that, but they were at least as interesting as some talk radio stations or good old fashioned fire-and-brimstone preaching.

Probably first worth pointing out that the vast majority of people who register with Amway don't buy any of this stuff, so anyone doing so is already in a minority.

Having said that, I entirely agree. There's also the social aspects - haven't time to dig it up now but there was an academic paper on this aspect of multilevel marketing. It concluded the social/group aspects provide non-monetary value. Over the past decade I've occasionally gone to a seminar purely because I felt I needed the "lift" from the positive atmosphere.

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Then there's probably some kick people get by feeling they are part of a highly motivated, hard-charging entrepreneurial team... some social value. I didn't get this because I wasn't attracted to the most successful I saw -- in fact, they repelled me.

The first time I joined Amway was through my brother, and he was part of a group whose "leadership" I find "repellent" in many ways. Indeed if you analyse critical comments on the 'net and elsewhere (for example Stephen Butterfield's book) things like a lot of the religious, political, and over-materialistic proselytizing of some groups is off-putting for [i]many/I] people.

The second time I joined was with a different group. Some leaders I admire greatly, others not so much. None repellent fortunately.

[xjx388]

Payday loan companies are legalized loansharks.

Amway is a legalized pyramid scheme.

Just because it's legal, doesnt mean it's good for you. The FTCs blessing does not make it a great idea. It has been well documented that Amway is a terrible business opportunity, is rife with upper-levels who take advantage of their downlines and has quite ordinary products. If this kind of stuff is for you, then go for it. But I submit that if it was as great as you maintain it is, you would be pursuing it instead of just buying a product here and there.

[kowalskil]

Originally Posted by Joecool

Amway the corporation by itself is not a scam. But the Amway opportunity, tied in with Amway Motivational Organizations (AMOs) are run like a scam.

People are often recruited by being told if they work hard for a short period of time (usually 2-5 years), they can become wealthy beyond their dreams, own mansions, yachts, sports cars - all paid ofr in cash!

How can one take such a promise seriously? Earning $100,000 per year, which is already fantastic for someone looking for a job, would not be sufficient for mansions, yachts, etc.

======================================

Breach of rule 6 removed.

Posted By:Cuddles