Comment and Opinion

Amway (and Alticor, and Quixtar, and whatever other names they hide under)

I received a telephone call at work one day from someone (whose name I did not recognise) who said that he had met me at a computer exhibition (I run a computer consulting business). He said that he wanted to talk to me about a new e-commerce application which would allow online, secure sales and product distribution. As some of my clients were just getting into selling from their web sites this had a certain attraction for me. I asked him to send me some information before we arranged a formal meeting and he said he would drop it in personally. When he turned up at my office red lights flashed, red flags went up and signal rockets lit up the sky. Figuratively speaking, of course. I might not be able to remember people's names but I rarely forget a face, and I had never seen him before in my life. The other screaming clues were that he wanted to give me a tape and he wanted our meeting to be in the evening at my home with my wife present. I told him that I talk business in the office only, and my wife would not be coming. He reluctantly agreed to this, we made the appointment and he left.

I listened to the tape and, as I suspected, it was a multi-level marketing promotion telling me how rich I was going to be and how this was the new paradigm of marketing and ... There was a mention of Amway in a list of companies which were considering online sales, and the way it was included indicated that this was just the obligatory statement of the promoter's name which was needed to pass through a loophole in the law prohibiting pyramid selling. I was pretty steamed up at this point, but I really became outraged when I saw that the cover of the tape said that it had come from a company named "Internet (Aust) Pty Ltd", complete with company registration number. This looked to me like a clear case of what the lawyers call "passing off" and I wondered how anyone had been able to register "Internet" as a business name. The clear implication was that this was an Internet business, perhaps even having some official recognition, but the reality was that it was just the same old dross in a new package.

At that time, I was on a sub-committee of the local Chamber of Commerce which was liasing with local and state governments about the establishment of a facility to support start-up businesses in the area. Amway was a member of the Chamber, had a representative on the committee and provided a room with coffee and cake for our meetings. At our next meeting, I mentioned to the Amway person on the committee that I wanted to lodge a complaint about the deceptive behaviour of one of their distributors, so he arranged for me to meet the senior Amway executives responsible for relationships with distributors. At the time I had no reason to believe that Amway was anything other than what it claimed to be - a company which was itself ethical but which received bad publicity because of the actions of rogue distributors who did not stick to the rules and procedures that Amway required for all its sales force.

At the meeting with the Amway people I expressed my concerns about how the person who had approached me had denied that he was anything to do with Amway, had misrepresented his non-existent prior relationship with me, and had generally acted in an underhand manner. By this time I had had the meeting with the distributor and his upline (who was a professional salesman for the motivational organisation running this particular pyramid). That meeting had gone as expected, with me asking about Amway and them half-denying it with weasel expressions, and the usual flummery about independent business operators sailing around the Bahamas. The Amway executives expressed outrage at this clear violation of the requirements that all distributors be totally frank about their Amway connection and make no promises of immediate, immense wealth. Special criticism was reserved for the deceptive use of the business name "Internet", and I was assured that immediate action would be taken against this rebel distributor who was acting in a way which violated all of Amway's principles and brought the company into disrepute. I asked the obvious question (why were these executives working 9-to-5 for wages when they had an unrivalled opportunity to participate in the Amway dream?), received a suitably vague answer, and we parted on good terms with a final promise of rapid and ruthless action against the sinners.

A few weeks later I discovered that "Internet" was the corporate name of the business belonging to Dexter Yager, who runs the oldest and biggest of the Amway motivational organisation pyramids. His company had been using this name for more than ten years, and the company named on the tape wrapper was the Australian subsidiary of his US organisation. (As a nice aside, the people in Yager's outfit are so ashamed of what they do for a living that they won't let strangers look at their web site.) Yager was the person who invented the idea of the training tapes which make so much money for senior distributors. It was beyond belief that senior executives in Amway, especially ones involved in distributor relationships, could not have known of the connection between Yager and the business name "Internet". These people sat across a table from me, smiled, looked me straight in the eye, and lied to me. That told me all I needed to know about the company and its ethics and business practices.

Read what an expert in organised crime thinks about Amway.

"It is my opinion that the Amway business is run in a manner that is parallel to that of major organized crime groups, in particular the Mafia. The structure and function of major organized crime groups, generally consisting of associated enterprises engaging in patterns of legal and illegal activity, was the prototype forming the basis for federal and state racketeering legislation that I have been involved in drafting. The same structure and function, with associated enterprises engaging in patterns of legal and illegal activity, is found in the Amway business."

Someone did not like what I said:

From: "Tony Zurzolo"
Subject: Amway
Date: Sun, 28 Nov 2004 21:30:37 +0800

Saw your thing on the web.
You need to get your facts right.
What your saying is so far from the truth you should be embarrassed.

Perhaps you could point out the specific errors I made in reporting my conversations with Amway executives. By the way, are there more than 23 pictures of diamonds on the wall at Amway's Australian headquarters now, or is that still the pathetic record of how few people can achieve in over 30 years what everyone is told is possible within months?

Check out Alticor.com

I notice that Alticor is boasting about $6 billion world-wide sales. How does that compare to Coles Myer in Australia alone. Pretty sad, isn't it? (Here's a hint - Coles' gross profit for the last reported year exceeded total annual sales for Alticor.)

A2k.com.au

That URL doesn't work because Amway haven't configured their server correctly. It needs the "www".

Quixtar.com

A turd by any other name would smell as sweet.

From: "Tony Zurzolo"
Subject: RE: Amway
Date: Mon, 29 Nov 2004 23:57:23 +0800

With all due respect Peter. I stumbled across your site by accident for some reason or other. I have no intention of getting into a debate about this or arguing. I suggest you look into the organisation more carefully. Do yourself a favour and go and speak to some of these Diamonds yourself. Heart to heart with an open mind. You would be surprised at the good Amway is doing in peoples lives. How much of that $6 billion did Coles Myer pay back to it's loyal customers. Zero dollars as far as I know. Thats way less than Amway pays to it's loyal customers. Freedom of choice is a great thing. All the best.

Some other comments about Amway.

This book will change your life (29/12/2004)
Well, maybe not change your life, but it might make you think before throwing your life away. Eric Scheibeler was a big pin in Amway and this book documents the way he and his wife were drawn into the cult by false promises, lies and psychological tricks - the same tactics used by all cults to gain control over members. He saw the deceit, the hypocrisy and the obsession with money as an end in itself from within the small circle of people allowed to be exposed to the truth. When he saw the truth it revolted him and he realised that anyone with a conscience and with a sense of morality could not remain inside this corrupt environment. My own direct experience with executives of Amway showed me that the company would lie to protect criminals in its ranks.

Someone who was showing me the plan once told me that there had never been anything like the system in the history of marketing. When I pointed out that the illegal drug industry was a multi-level marketing scheme where the people at the bottom recruited others to pay for their own supplies and the people at the top got all the money, lived like kings and had absolute contempt for those below them in the network the Amway scout listened politely and then resumed his spiel. He either didn't care or didn't want to know. Probably both. The difference between Amway and the Mob is that the Mob don't pretend to be in an honest business.

You can only get Eric's book from his web site. I recommend that you go there, download it, get a bucket ready to catch the vomit, and then read about the way that the fortunes of people like Richard de Vos, Jay Van Andel, Dexter Yager and other big-time crooks were made by offering dreams which they knew could never be fulfilled.

Obituary - Jay Van Andel (15/1/2005)
One of the things which is always stressed in any showing of the Amway plan is how horrible it is to work for a boss, because you are just working to make the boss rich, not yourself. The Amway lifestyle removes this burden from you so that you are working to make yourself rich, not someone else.

Jay Van Andel died on December 7, 2004, leaving behind a fortune of $2.3 billion which was left over after a lifetime of bribing politicians and supporting crackpot political and religious causes. You can read the good news here. Van Andel made this money by being one of the founders of Amway. Remember that one of the quintessential attractions of the Amway business is that by being in the business you are going to make yourself rich, not some boss. I wonder how many Amway distributors managed to put together more than $2.3 billion. Not many, I would think, as this sort of money made Van Andel the 231st richest person in the world. The really strange thing is that he made all this money without recruiting, without showing the plan, and without working in The Business. He just sat back and skimmed off the cream that was a condensation of the destroyed dreams of countless people who had been lied to. I notice in the article that it said that his body would be available for viewing before the funeral. This was a good thing, as it would have allowed people who had had their lives destroyed by his work the opportunity to spit on his face and assure themselves that the bastard was really dead.

I mentioned that Van Andel gave money to crackpot religious causes, and nothing could have fitted the description better than The Creation Research Society. This place says of itself that "The Creation Research Society is a professional organization of trained scientists and interested laypersons who are firmly committed to scientific special creation". When I read that I could not help but think of the Grand Academy of Lagado as described by Jonathon Swift in Gulliver's Travels. This was a place where scientists worked busily on such problems as extracting sunshine from cucumbers and recovering the original food from excrement. How much is this like the sort of research being carried out at The Van Andel Creation Research Center? You can get a free copy of Gulliver's Travels from Project Gutenberg, but I have extracted the relevant chapters and you can read them here.

More on Amway (2/4/2005)
Here are two advertisements for comic strips available from Ucomics. Both are part of the Big Top series by Rob Harrell. You can see the full series here.

Buy a print of this comic

Buy a print of this comic

From: "Angela von Tunk"
Subject: re Amway
Date: Tue, 31 May 2005 09:27:48 +1000

what a sad sack you must be. I feel sorry for you.

Amway in UK (16/6/2007)
I have sad news. Amway in the UK have been ordered to stop recruiting until they can clean up the organisation and demonstrate that the real business is selling soap powder, not recruiting more suckers and selling them tapes and meetings. Everyone knows that J.O.B. means "Just Over Broke", but with any sort of luck it will now mean "Just Out of Business" for at least one Amway pyramid. Read the good news here in Amway's own convoluted words. And notice how it mentions Network 21? Every time I have had someone from Network 21 show me the plan, he has denied any connection with Amway other than to say something like "Amway is one of our suppliers". But I always knew they were lying.

I didn't bother to reply, because I have said it all before and they either don't listen or don't hear. I love the bit about bumble bees. I bet that bit of long-refuted nonsense is offered by uplines as a guaranteed objection-stopper. It's a pity that there is nothing in physics which suggests that a bee can't fly once you know how it actually moves its wings. Still, why should facts interfere with a sales pitch.

Andrew was not happy that I didn't reply. I was right, though - replying would have been a waste of time because it has all been said before.

Subject: Amway...Ntwrk 21
Date: Tue, 17 Jul 2007 07:33:42 +0200
From: "Paola Young"

Just reading through the commentary of some sceptics really irritates me. There is no promise from Amway or Ntwrk 21 that you’ll get rich quick. In fact they emphasise HARD WORK. It is also made very clear that it is a form of passive income. How big you go or get is up to you; your vision, skills and what you put in results in what you get out. You make people aware of quality products that have a 90 day guarantee. Someone decide to purchase a product and the product speaks for itself. A one time customer will land up becoming a regular because of the results of the product. The money that would have been spent on advertising is put in research instead. Direct selling reduces the retail price as middleman etc is cut out. 30% of a sale goes into your pocket or 25, 10 etc. You decide on what % of profit you want. You are not allowed however to exceed 30%. Every product has a point value, if your sales are good and you collect many points, a commission is paid out to you. If you add to the team as a group on business volume that you move you get paid a further commission. If you get to a point that you expand & create your own team naturally your commission increases. It is not a pyramid scheme because in simple terms, you don’t ever sit back and let “your little ants” work for you. You don’t get to take their profit in any way. All that happens is a group incentive & a larger commission on a larger group. Some people run with the motivation & vision they see available to them through this opportunity and others are content with a bit of pocket money here & there. Big things can happen if you have the incentive and work for it. All the bitching & griping! Honestly what for?! Yes, we live in a paranoid world with unrealistic expectations, wanting the easy way out. Please people get your facts STRAIGHT. Work = results. Mouthing off = crap that some people might slip in. Thanks. P.S. I am not a crook, hustler or con-artist…just a herd worker who enjoys making a little extra when the payslip of my regular job doesn’t meet my needs.

A compliment (4/8/2007)
I have found myself listed with some very illustrious names. The location is a blog devoted to extolling the virtues of Amway and defending the right of people to lie to others about how much money can be made as a brick in a pyramid. Apparently my sin was to criticise multi-level marketing and the Amway motivational organisations without ever being a victim myself. (On this basis, the only crimes I can offer a credible opinion about are mugging, car theft and corporate fraud because I have experienced them personally. Anything I say about rape, murder, armed robbery or slave trafficking has no value. For some reason analogies like this don't go down too well with true believers, and even less well with those who pretend to believe in order to deceive others.)

Here is the list of evil anti-MLM campaigners:

It is interesting to note that two people in the list, Steve Hassan and Rick Ross, are actually anti-cult campaigners. I guess that the Amway Motivational Organisations feel their ears burning when anyone mentions cults. The blogger (who is of course anonymous, going by the name "IBOFightBack" on his blog and "insider" in at least one other place) has annotated some of the names, and this is what he had to say about me:

Runs the "ratbags" site in Australia. I wrote to him a year or so ago pointing out, with independent sources, where a number of his claims were flat out wrong. His only response? he'd already addressed the issues (he hadn't) and that I was obviously impervious to logic since I was writing from a domain mlmfacts.com (which I wasn't - it was mlmfacts.net)

Firstly, I am appalled at the egregious error I committed of typing "com" instead of "net". I have, of course, rushed to correct this dreadful departure from the truth, and I apologise to all my visitors for carrying such deceptive material on this site for more than a fraction of a nanosecond.

The second thing I noticed was his claim that I hadn't previously addressed the issues to which he was responding. This raises the interesting philosophical point of how he had anything to respond to, unless he thinks that simply denying something removes all previous mention of it and therefore it is necessary to start again. He would not be alone in this opinion, as anyone who has ever tried to debate a creationist will know.

I went back and had a look at his email, and, yes, it was full of the same old rubbish that I had heard many times before, but one thing caught my eye that I hadn't noticed the first time around. I had mentioned that every time anyone from Network 21 had shown me the plan they had denied any Amway connection except for some drivel like "Amway is one of our suppliers". Here is what an "insider" had to say:

N21 does not sell *any* Amway products. Network 21 is a for-profit company that sells books, tapes, cds, and other business aids, and promotes and sells tickets to seminars and other events.

So there you have it, folks. An admission from the inside that Network 21 exists not to sell Amway products, not to support "Independent Business Owners" in their quest for wealth, not to help IBOs to build their downlines and spread the wealth creation, but to sell tools and seminars. And it does it for a profit, too (so there goes "we provide these services at cost to help you build your business" and other lies). This is probably the only occasion on which I have ever detected an iota of honesty in anyone involved with one of these organisations. Perhaps he didn't understand what he was writing. Perhaps he thought that I was the sort of person who would believe what he said because he said it in a nice voice. He was wrong.

(In 1982, Amway founder Rich de Vos described making money from tools and seminars as "illegal". Click here to hear Rich's edict, something which he said but never enforced.)

And speaking of lying ... (19/7/2008)
One of the things the spruiker had a gloat at me about was when I mentioned Amway's legal problems in the UK. He told me that the case had been settled and Amway was back in business and going at full strength. It surely was a great win for Amway. In making his ruling in the case, the judge observed:

• Among Amway's current "active" distributors in the UK, which exceeded 33,000, only about 90 of them earned enough bonus to cover the costs of actively building their business. That's a 99.7% loss rate for consumers induced to invest.
• After the commencement of the investigation Amway cut the cost of homecare products by 48% and personal care products by 29%.
• For the period 2001-2006, 95% of all bonuses were earned by just 6% of IBOs, 75% of all bonuses were earned by 1.5% of IBOs
• Over a five-year period, a near 100% turnover rate among the "distributors."
  • 2001-2002: 5,690 were recruited in but 10,149 quit
  • 2002-2003: 6,525 were recruited and 8,000 quit
  • 2004-2005: 12,561 joined and 8,756 quit
• Amway UK's operation is consistently unprofitable as a business but is sustained by cash from Amway in Korea!
• Although Amway UK never showed a profit, Amway has dropped prices as much as 48% and eliminated the registration and renewal fees!

The judge's ruling to allow Amway to continue is contingent upon:

• All "tools" business be controlled by Amway UK and it is now not permissible to profit from them.
• Amway will publish distributor earnings information
• Both the registration and renewal fees are abolished
• Amway has restructured so that a new class of representative is created that only retails.

Some win for Amway, hey! The Big Pins like to talk about losers with a JOB, which means "just over broke". Well now it looks like the Big Pins are SOL and we all know what that means.

The UK government has decided that this is not good enough and is planning to appeal on the following bases:

• Amway's product are not marketable. They are priced far higher than comparable goods. They are seldom sold to anyone other than the salespeople themselves.
• More than 99% of all Amway salespeople lose money. More than half quit the scheme within a year, after suffering financial losses
• The only way to make money in Amway is through "endless chain recruiting", a flawed and fraudulent system that guarantees only the top recruiters can be profitable and is illegal in England and most other places on the planet. (Some have termed this scheme a "closed market swindle.")
• Extreme deception is used to lure people into the scam

(Thanks to Pyramid Scheme Alert for the information above. I never mind giving them a plug, if only because the despicable clowns at the Direct Selling Association (the industry body for US scamsters) try to deceive people by using "pyramidschemealert" in domain names. See some more about this here. I met one of the DSA directors once and I felt like having a shower and a tetanus shot after shaking its hand.)