Amway is a pyramid scheme, and I have lost a friend to prove it.
I’m betting it’s more likely than not that someone you know has also gotten involved with Amway. The company is ubiquitous and seems to be infiltrating even the most rational social circles. If someone has recently invited you to coffee because they’re looking for people to help them run a “business”, chances are you’re in danger of becoming an Amway target.
There’s only one big problem: Amway is a pyramid scheme.
Why Amway Is a Pyramid Scheme
Amway is a multibillion-dollar company that uses “multilevel marketing techniques” to sell cosmetics and household products. They have really aggressive recruitment techniques and cult-like practices. They’re super shady and sued on a pretty regular basis, but still, manage to trick new people into the fold!
Amway is a pyramid scheme for the same reason all pyramid schemes are pyramid schemes: the focus is on recruiting new members and selling a lifestyle, not actual products.
Amway does sell some products, of course. You can by a number of household goods and cosmetics through their store. However, the main focus of the business isn’t selling stuff: it’s on finding people to work for you so you can grow your downline.
The dictionary defines a pyramid scheme as:
“a form of investment in which each paying participant recruits further participants, with returns being given to early participants using money contributed by later ones.”
Because you have to pay fees to be part of the business, and you earn a percentage of the fees paid by your recruits, Amway is a pyramid scheme by the most traditional definition. You actually can’t describe it as anything else.
If pyramid schemes are illegal, why doesn’t Amway get shut down?
Understanding why Amway is still allowed to operate despite being an illegal pyramid scheme requires delving into the history of the company. Amway is a rich and powerful political player, and more than once in history they’ve bent the rules to suit themselves.
Amway, short for “American Way”, was founded in 1959 by Jay Van Andel and Richard DeVos. That latter name should ring a bell: Betsy Devos is the daughter of Richard DeVos and current Secretary of Education in the USA. It’s pretty easy for your family business to circumvent the law if you’re regularly rubbing shoulders with the president.
The DeVos family is a major donor to the Republican party. Before his death in September 2018, Richard DeVos was American royalty as the 60th richest person in the USA, and the 205th richest person in the world. He’s practically diety of American Capitalism, and this is the real reason Amway can operate an illegal pyramid scheme without any consequence.
One of the best investigative journalist pieces on the Amway cult is the podcast The Dream. It’s a riveting listen about both the political history and business psychology of the company from the inside out!
How Amway Works
Amway targets emotionally and financially vulnerable people and promises them security, family, and money.
People that are secure in their personal relationships aren’t easily brainwashed by Amway’s creepy “family” angle. Likewise, those with sufficient income are rarely swayed by the “exciting opportunity” to “build an asset” for themselves.
Amway uses the tried and true tactic of exploiting the weak. By aggressively pursuing friendships, establishing mentors, and building an active community, it’s easy to see why being part of Amway seems like a good time to someone who’s been feeling lonely.
Self-improvement and lifestyle changes lead to positive outcomes
Amway encourages new participants to start eating healthy and work-out. Big surprise: taking care of yourself feels good. However, those who have been in a funk for a long time might attribute their new health and self-esteem boost to Amway rather than positive diet and lifestyle changes.
Then they have recruits set goals, make vision boards, and sell them on the dream that they’ll “be retired in 2 to 5 years”. Amway is a pyramid scheme, but it’s masked under the real positive life changes subscribers make.
Once Amway has their claws in, they get their new recruit to switch everything over to Amway so they become their own customer. By ordering household and beauty products through their own online store, they pay a premium for everyday items and get a small kickback which they try to sell as this amazing perk. I don’t see why you wouldn’t just choose something else.
There’s nothing wrong with a side hustle
I’m not trying to slam Amway as a profitable hobby. I’m a big promoter of the side hustle. This is extra work or a part-time job you take on to earn extra money in order to reach your financial goals.
However, I don’t think any kind of multi-level marketing organization is the way to do it. Instead, there are plenty of amazing ways to bring in extra money without going broke and making all your friends and family hate you.
One of my favorite side hustles you can do right from the comfort of your own home?
- Sign up for Swagbucks and earn points for surveys, surfing the web, and watching videos that you can then redeem for cash or gift cards
- Sign-up for Rakuten and receive 1% to 8% cash-back for shopping online at your favorite stores, like Amazon and Sephora
- Sign-up for KOHO and get a bonus 1% cash-back on all your spending
These put more money in your pocket every day, without pissing off anyone you love.
How I lost my friend to Amway
In university, my best friend’s roommate was caught up in the snares of Amway. It started innocently enough but rapidly declined into a spiral of crazy we could not rescue her from.
She told us she was “building an asset for herself”. Her bedroom was littered with binders of Amway sales strategies and tactics. She listened to Amway’s “positive affirmations” CDs while she slept. She even attended international Amway conferences. This cost thousands of dollars out of her own pocket and have yet to return anything.
Before we even really knew what was happening, she had moved out of my friend’s home and into some kind of Amway halfway house.
Amway forces you to cut ties with anyone that voices their concern
After her departure, my friend’s now-ex-roommate promptly cut every non-Amway person out of her life. We don’t know how she’s doing anymore.
Amway actually tells recruits to do this. They say you should cut ties and end relationships with anyone that doesn’t support you. If friends or family don’t buy from you, or worse, criticize Amway, they’re labeled as dead weight.
Before my friend abandoned us, she tried to pitch us first. A senior Amway person came to my friend’s home, and presented to a dozen of us about the company. I had to sit through this really bizarre presentation where they insisted that Amway was not a pyramid scheme.
Just for future reference: anyone that has to say “it’s not a pyramid scheme!” is probably trying to sell you on a pyramid scheme
They told me I was wasting money by putting it into savings and the stock market. Which is weird, because I’m the one making money and they’re not.
You can read more about the company here. If you want to hear more creepy personal stories about other people, like my friend’s roommate, who has been tricked into Amway, there are some good ones here.
If you know Amway is a cult and still want to succeed, you might enjoy this guide: How To Be A Good Amway Cult Leader
Does anyone make any money?
Yes. It is true that some Amway participants will genuinely earn a good income from the business. Namely, whoever can exploit their dumbest friends and family to fall into step.
For every dozen critics of Amway, there’s always one fool that insists his brother’s friend’s cousin made a killing. They retired in 3 years and now live in a giant mansion in Honolulu. But everyone else is spending way more than they’re making.
You’ll notice on every page of Amway’s books they’re forced to print “the average monthly earnings in 2012 was $84”. You’re going to earn the $84, you’re not going to retire in 2-5 years.
Have you ever known anyone that’s tried Amway or have you tried it yourself? What’s your thought on it or other MLM firms?