Firstly, Amway is one of the oldest MLM or network marketing companies around today. Many people get very confused about the different between pyramid schemes (Bernie Madoff always comes to mind) and legitimate MLM businesses. No pyramid scheme could have been out in the open, under heavy government scrutiny for so long, and have become so successful. Amway is not a scam.
MLM is a marketing strategy that when put down on paper only looks like a pyramid – one recruits two, two recruit four etc., the guys in the top tiers win every time as not only are other people recruiting their massive downlines, they also able to sell large volumes of product to make the big bucks.
Older, well-established and successful MLM companies such as Amway have everything we should look for in a solid network marketing home business, but when you extrapolate that pyramid of recruits down to its bottom line today, after 50 years in business, you will understand that there are slim pickings left for new recruits. The market is saturated; and that’s exactly where Amway planned to be all those years ago.
The Amway Corporation is part of the Alticor group of companies, founded in 1959. Their main products are skin care, vitamin and food supplements, a water purifying system called eSpring, and the excellent SA8 line of laundry care products.
Amway distributors don’t just earn money from selling the company’s products, they also receive bonuses for sales made by their recruits or downline, therefore the people who have been in Amway’s system for years make all the money. This is true of any successful MLM company, part of a distributor’s earnings rely not on just selling product therefore, but from promoting the company to others.
If you do decide to join Amway they do have a buy back policy, which means that any products you haven’t sold will be bought back, which is little comfort after you have spent unsuccessful months trying to sell the products to an already saturated market.
To make sure that distributors do not try to secure a performance bonus entirely on the basis of purchases, Amway requires that distributors resell at least 70% of the products they have purchased every month. It must be also be proved that you sold those products to at least ten different customers each month, to receive a performance bonus
Sixty percent of Amway’s distributors, if you look at their criteria, are not active which means that only 40% of Amway’s distribution network is making any monthly income, the rest are buying Amway’s products for their own consumption.
It’s the long-established people at the top who are making the big money, and from what I can see the bottom of the ladder is overrun with little opportunity for a home based business with Amway that can earn more than a few dollars a month.
With an annual turnover of around $7 billion worldwide, divided by 3,000,000 distributors, that makes on average distributor’s sales come out to approximately $2300 gross per year.