Love them or hate them, Amway is a powerhouse in the network marketing industry. Depending on the year, they’re either the # 1 or # 2 MLM Company in the world. They’re always in a battle with Avon for the top spot.
They have huge market share, doing nearly $11.8 billion in sales in 2013. In fact, they are one of only a handful of network marketing companies to surpass the $1 billion annual sales mark.
What I want to do in this blog post is give you an independent review about Amway, so you can see if it is the right fit for you as a customer or distributor. As a quick disclaimer, I should tell you upfront that I am “former” distributor, however, I have no negative feelings toward the company. I’m also still a happy customer, since I’ve always enjoyed the Amway products.
The Company History
Amway is the “God Father” of network marketing. That’s how I think of them anyway. They trace their roots back to the 1950s. Jay Van Andel and Rich DeVoss were successful Nutrilite distributors at the time. They founded the American Way Company (Amway for short) in Ada, Michigan in 1959. Their first product was the L.O.C. Cleaner.
Within a few short years the company expanded into Canada (1962). In the 1970s they acquired Nutrilite and expanded into several other countries, including Australia. By the 1980s the company reached the $1 billion mark in annual sales. By the 1980s they had more than one million distributors worldwide and did business in more than 20 countries.
By the 1990s the company was in full swing and at all time high in popularity. Amway continues to grow each year and expand into new international markets. They are definitely the “big dog” in our industry.
The Amway Products
The Amway products are phenomenal. I know people who have been using the products for 30 or 40 years, and they’re just customers. I left the company more than 10 years ago and I still use the products. To me, that speaks volumes.
Amway manufactures several hundred of their own products. Some of their leading product lines include vitamins, nutrition, weight loss, skin care, personal care, energy drinks, and magnetic therapy. They have soaps, shampoos, lotions, potions, cosmetics, and so much more. They really do offer something for everyone.
Some of their most popular products include:
- Nutrilite Double X vitamins
- Artistry Makeup
- Amway SA-8 laundry detergent
- XS Energy Drinks
- E-Spring Water Filter
Since I left the Amway business in 2004, I know they have lowered the prices on a lot of their products to make them more competitive in the marketplace. They aren’t always the cheapest products around, but I do think they are priced fairly, especially if you shop around.
The Amway Compensation Plan
Within Amway, you make money by either retailing the products or by building a team of distributors. When you are just getting started with Amway I suggest you focus on getting customers. When you get customers you earn the wholesale-retail difference, and you can also get paid on the total volume. This will put immediate profits in your business.
You can also earn overrides and commissions by building a large team of distributors. That’s where the big money in Amway comes from. Some distributors have teams of hundreds, thousands, even tens of thousands of distributors that they earn a small commission off.
Amway uses a uni-level compensation plan, sometimes referred to as a breakaway compensation plan. That means that distributors can personally sponsor as many people as they want to on their front line. Anytime someone you sponsor places and order or makes a retail sale, it counts towards your total monthly sales volume.
The goal is to help someone you sponsor reach the rank of Platinum, whereupon their group “breaks away” and is no longer included in your monthly volume. Instead, you start to receive a royalty commission off that group’s total volume each month.
In Amway, they use PV and BV to determine monthly commissions. PV is the point value of a product. BV is the business volume. Your total PV determines which percentage of the BV you get paid upon. As an example, a product that sells for $100 might have a PV of 40 and a BV of 80. That is just a hypothetical example to put things in perspective.
Here’s how the commission breakdown works.
- 100-299 PV in a month earns you 3% of the BV
- 300 to 599 PV in a month earns you 6% of the BV
- 600 to 999 PV in a month earns you 9% of the BV
- 1,000 to 1,499 PV in a month earns you 12% of the BV
- 1,500 to 2,499 PV in a month earns you 15% of the BV
- 2,500 to 3,999 PV in a month earns you 18% of the BV
- 4,000 to 5,999 PV in a month earns you 21% of the BV
- 6,000 to 7,499 PV in a month earns you 23% of the BV
- 7,500 PV or more in a month earns you 25% of the BV
Keep in mind this includes your personal consumption, your personal sales and your team’s personal consumption and sales.
The ranks advancements include
- Founders Platinum
- Founders Ruby
- Founders Sapphire
- Founder’s Emerald
- Founders Diamond
- Executive Diamond
- Founders Executive Diamond
- Double Diamond
- Founder’s Double Diamond
- Triple Diamond
- Founder’s Triple Diamond
- Founders Crown
- Crown Ambassador
- Founders Crown Ambassador
You can visit the company’s website to read more about their compensation plan and rank advancements.
Amway vs. the FTC
In 1979 Amway paved the way for the rest of the network marketing industry. They won an important lawsuit vs. the FTC helping establish the legality of the network marketing profession. The key points from the lawsuit were that distributors must have 10 customers, that 70% of the products are sold at the retail price, and that the company offers a buyback period.
The Amway Controversy
Without a doubt the major controversy with Amway is the tools and Motivational Organizations. To this day I’ve never met anyone who had a problem with the company itself. Most people love the products and have a high regard for the company.
All of the problems stem with the tools business. The major controversy with the tools business is that the Diamonds make MOST of their money from the tools and business support materials, not Amway. The tools include Standing Order Tape, Book of the Month, voicemail services, Events, and other business support materials.
Depending upon who you ask, many of the Diamonds make more than 70% of their income from the tools, not the Amway business. The biggest issue with the tools is the deceptiveness. When you are shown the plan, no one tells you that the Diamonds make a big portion of their income from the tools. And when you ask most Diamonds how much they make from the tools, they brush it off.
Many folks argue that Amway exists to support the tools business, not the other way around. And that is the problem that most people have with Amway. I personally see it as a conflict of interest.
I personally don’t think the tools are BAD and systems are totally bad. The tapes and functions helped me immensely. I know they do offer some value.
I think it’s the pressure and deception that many Diamonds use to get everyone on their team “plugged in” to the their system. They stress the importance of the system and tell people the only way they can succeed is if they use the system. In many cases, they even refuse to work with people who don’t “buy in” to the system.
Once again, it’s how they go about it that rubs people the wrong way.
I hope that one day Amway will “police” the Amway Motivational Organizations and either get rid of, or modify, how the tools business works. If they would do that, I think you would see a lot of people rejoin Amway.
I think the best thing Amway could do would be to get rid of the AMOs, tools and systems and handle everything in house. They could create and sell their own business building tools at their cost, or for a small profit. That would eliminate most of the problems with the tools business.
The Good, the Bad and the Ugly
Here is the good, the bad and the ugly about Amway as I see it.
- Great products at fair prices
- Huge product line
- Huge international presence
- Established company, 50+ years old
- Outdated compensation plan
- Crazy rules in the distributor agreement (just read it)
- Bad reputation with consumers and prospects (many folks hear the name and run)
- The tools business and AMOs
- Horrible online reputation
Keep in mind these are just my opinion. Your opinion may differ.
Amway Success Stories
I should start out by telling you that most people who join Amway QUIT. Don’t let that scare you though. Nearly 90% of all businesses fail in every industry. In addition, most realtors fail, most insurance agents fail, most marriages fail and most diets fail. It’s just important to compare oranges to oranges and put things in context.
And while there might be some Amway horror stories online, there are also lots of success stories. Some people achieve monumental success in Amway. And many others earn a very nice part-time income that adds to their lifestyle and improves their quality of life.
Within Amway, Diamond seems to be the pinnacle of success that everyone is trying to achieve. In essence, a Diamond is someone who reaches Platinum and helps minimum six other people do the same thing.
Some of the most famous Diamonds in Amway include Bill Britt, Dexter Yager, Barry Chi and Holly Chen, Tim Foley, Dave Severn, Larry and Pam Winters, Robert Crisp, Jody Victor, Ron Puryear, Mark Lei, Jim and Nancy Dornan, Mark Schwarz, Leonard and Esther Kim, Fred and Bernice Hansen, Don and Ruth Storms and many others.
I put together a huge list of the top 27 Amway Diamonds of all time. I think you might enjoy that and want to check it out.
Achieving Success in Amway
If you look at most of the successful people in Amway, most of them joined prior to 1990, and most of those folks joined prior to 1980. There are a few exceptions to this rule, but not many! You could still join Amway today and achieve big success (Diamond and above), but it would be very hard to do.
During my time with World Wide Dream Builders, they taught that Amway was a two to five year plan to financial freedom. During my 2.5 years with the company, we only had one or two new Diamonds in WWDB, so I questioned how good the plan really was. Hands down the biggest challenge was attrition. Keeping people “plugged in” to the system and ordering the products each month was hard to do.
While it might be difficult to join Amway today and become a Diamond, I think anyone could join the company and make $500 to $1000 per month by building a little retail business. One of my best tips would be to avoid the systems and tools at all costs. The major problems with the systems are the expense. For most folks participating in the system will eat up any of the profits that you do have!
I would also tell anyone joining Amway today to build up a customer base first. Five 10-20 personal customers so you can make $200 to $1000 per month in retail commissions. Do that BEFORE you go out and promote the business opportunity. If you just go out and just try to RECRUIT-RECRUIT-RECRUIT, you will spin your wheels, get bad results and get burnt out! Trust me. I’ve been there and done that.
Another tip would be to study marketing, sales, and lead generation. Learn how to sell and learn how to generate leads online and offline. This will really help you out in your Amway business. Treat it like a business and it will pay you like a business. Treat it like a hobby and it will pay you like a hobby. Does that make sense?
My Experience in Amway
I joined Amway in 2002. At the time it was called Quixtar. I was 24 years old and was a First Lieutenant in the Army at Fort Carson, Colorado. One of my peers invited me over to her house about a money making idea. I had no idea what it was about, so I showed up out of curiosity. I didn’t really want to go, but my best friend dragged me a long.
When I got to her house, the presenter (another Army Officer) was spinning the circles on a dry erase board and talking about “finding six people who find six people.” I was mesmerized to say the least. Up until that point in my life I had never heard of Amway, residual income or network marketing. I was so excited that I didn’t sleep for a few days. In fact, I went home and signed up as a distributor that night.
I spent about 2.5 years in Amway. Overall, my experience in Amway was very positive. I didn’t get rich or ever make it to Diamond, but I did achieve moderate success. I was profitable and had a lot of fun. I learned a lot about life, business, and goal setting. I reached the rank of Eagle with 2500 PV and was very close to 4000 PV. I decided to leave the business for personal reasons (mainly the tools business), but have been involved with network marketing ever since.
I have nothing negative to say about my Amway experience. I learned so many helpful lessons that continue to guide me today and have helped me become the person I am. I know it’s not for everyone, but I consider Amway (and network marketing) the greatest business school you can attend!
Books About Amway
There are several great books in the marketplace that talk about the good, and the bad, of Amway. Here are a few titles that I suggest you check out.
- The Cult of Free Enterprise by Stephen Butterfield
- Amway Motivational Organizations: Behind the Smoke and Mirrors by Ruth Carter
- Amway Forever: The Amazing Story of a Global Business Phenomenon by Kathryn Jones
- Empire of Freedom: The Amway Story and What it Means to You by James Robinson
- Compassionate Capitalism by Rich DeVoss
- Amway: The True Story of the Company That Changed the Lives of Millions by Wilbur Cross
- The Possible Dream by Charles Paul Conn
In conclusion, I am a big fan of Amway, even though I don’t like the Amway Motivational Organizations, tools, and systems. The company is a powerhouse in the network marketing industry and has paved the way for so many other network marketing companies.
In addition, I believe the company has great products and still offers a good business opportunity. No, it’s not for everyone. But, if you’re looking to partner with an established MLM Company with a global presence it might be the right fit for you! Like any other business venture, make sure you do your due diligence first so you can be an informed decision maker.
What are your thoughts? Do you have experience in Amway? If so, please leave a comment below to share your thoughts and personal story. I look forward to hearing from you.
Disclaimer: Amway is a registered trademark. I am in no way affiliated with the company. You can learn more about the company by visiting their official website.