Is Amway a Pyramid Scheme or MLM? (2024)

January 8, 2024 |

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This article will shed light on Amway’s marketing and compensation plan and will help you figure out whether Amway is a legit MLM or just another fraudulent pyramid scheme.

Amway sells beauty, homecare, health, and wellness products.

Over the years, it has delivered decent experiences and built a remarkably well customer base.

However, people’s curiosity over its legitimacy as an MLM and business opportunities remains the same.

Amway’s business model allows people to work as mediators and sell the company’s products.

Many people think there are inadequate chances to build a substantial income stream with this sales structure.

But do I think so? And what do the facts state?

I’ll give you a detailed opinion about Amway’s credibility and your chances to grow as the company’s distributor.

So, without any further delay, let’s get into it.

What Is Amway?

amway logo

Formed in 1959, Amway is an MLM company that produces a wide range of products in categories including nutrition, health, beauty, and household.

Headquartered in Michigan, their products are sold in up to a hundred countries through independent distributors.

The company has performed exceptionally well in various categories, selling 11 billion nutrition tablets globally.

So, it gives us an idea that it is a legitimate direct selling organization.

Now, the question is whether it provides an equally beneficial opportunity to budding entrepreneurs or not? Let’s discover your answers in the following section.

Is Amway Just Another Pyramid Scheme?

I must say, one of the most frequently asked queries I found during my research was whether Amway is a legitimate business or a pyramid scheme?

Let me break it to you; it is more complicated than this or that.

The thing with multi-level marketing companies is that they encourage their distributors to bring more recruits on board and make money from their investments.

As an Amway distributor, you have to pay a fee to join the platform and buy their products in stock.

You get a small commission percentage on the products you sell.

You can make real money and get promoted to a higher level when you hire a team to work under you to sell products.

Then, your team members can hire more recruits to work under them, and a hierarchy is formed.

Like all the MLM companies, Amway promises that being a business owner will give you financial freedom.

But why would a company ask its “business owners” to hire more members instead of selling its products?

This business structure is painfully close to a pyramid business scheme, making MLM companies seem controversial and fraudulent.

Given that it has been operating since 1959, we may agree that Amway is a legitimate company and can make you money. Otherwise, it would not have been possible for its founders to create a literal fortune.

However, there is a lot you have to be mindful about to work with Amway, apart from startup cost and fee.

Firstly, you will have to buy their products in bulk to sell forward. At this stage, you are more like a customer than a distributor.

The second stage will be a test of your patience, optimism, networking skills, and ability to find greatness in adversity.

Typically, it is not easy to convince people to buy dietary and personal care products.

Firstly, these products are costly, and not many grown adults prioritize luxuries over basic necessities.

However, if you have a circle of wealthy friends or you have a big following on social media, you can convince a large chunk of people to buy Amway’s articles. At this stage, your work is similar to a sales manager.

After successfully converting your peers into buyers and recruiting them later, you can call yourself a “business owner.”

Undoubtedly, the road will be non-linear and bumpy, but you may get successful.

Let me tell you that your communication skills, social circle, and luck are highly influential in this business format.

To conclude it all, Amway is a legitimate direct selling company, but its business structure resembles a pyramid scheme.

If you have the funds, power to convince people, a large and well-off group of acquaintances, and a heart to bear nos several times in a week, go for it.

FAQs – Everything About Amway Pyramid Scheme

What is Amway’s net worth?

According to 2019 stats, Amway’s annual sales made revenue of 8.4 billion USD.

Due to the worldwide economic crisis amidst Covid, the company did not experience a skyrocketing increase in its sales in 2020. The 2020 revenue reached 8.5 billion USD through global sales.

Is Amway Legit?

Yes, Amway is a legitimate MLM.

However, you have to spend money before actually making it. For some people, it becomes tricky to make the amount they invested. I have given a detailed overview of this company in the section above. So, kindly give it a read to see the complete picture.

Why is Amway banned in the US?

This question is a total myth, my people. American Way, AKA Amway, is an American company that operates in over 100 countries, including the UK, India, and the US.

Since the company has been involved in some controversies, I won’t completely blame people for asking this question.

Amway had accusations of breaching the Prize Chits and Money Circulation Schemes (Banning) Act of 1979.

So, the company offices were closed for a week.

Later on, the company came clean over the allegations and re-opened its offices. It has been operating ever since.

Why do people think Amway is a pyramid scheme?

Amway is a multi-level marketing company, and it is pretty complicated to differentiate between an MLM and pyramid scheme business.

To make money, you have to hire people and train them to sell products, which is suspicious and not a lucrative business format.

Plus, the money you get over your sales is not adequate. Therefore, people think that Amway is a pyramid scheme.

How much does it cost to join Amway?

It depends on the product category you are opting for as some of them are expensive than others. You can get started within $100 or less to buy your stock.

On the brighter side, the company will refund you if you change your mind. This offer is only valid after three months of your joining date.

How much money does the average Amway distributor make?

The company has claimed to make several millionaire business owners attached to its network.

However, there is no precise answer to this question. The amount of money you will make is neither salary-based nor hourly-based.

It depends on an array of factors that I have mentioned in this article in detail.

Is it illegal to sell Amway on Amazon?

No, it is not illegal to buy Amway products on Amazon.

The company suggests refraining from reselling its products through online platforms, such as eBay and Amazon. Yet, no law declares it an illegal practice.

How do I authenticate Amway products?

Whether you are a potential customer or an inspiring entrepreneur, it is understandable that you want to confirm a product’s authenticity before buying.

However, it is not possible to get an accurate answer online. All you can do is ask a friend whether or not they used an Amway product.

You can also check Youtube reviews and online customer stories to find the real scoop.

It also depends on the type of product you are buying.

For instance, if it is a nutritional article, check out its ingredients and make sure you are not intolerant of any of them.

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Final Thoughts

Amway is like an online job post enticing you to make money while working part-time remotely and then requiring a registration fee.

Yes, you can make money if you get lucky.

However, it is definitely not a suitable business path for people who don’t have a stable lifestyle. The chances to build a passive income stream and steady cash flow are lower.

Hence, I won’t recommend you to spend your money on it. Multiple other ways can help you earn money with little to no investment.

However, if you have enough funds and an optimistic approach, best of luck with this venture.

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