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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.
"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."
From: "Tony Zurzolo"
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.)
That URL doesn't work because Amway haven't configured their server correctly. It needs the "www".
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 could originally only get Eric's book from his web site, but that site is now closed. You can download the book here. 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.
[Eric eventually gave up and closed his web site. You can download and read his book here.]
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.
The last thing about MLM (for this week, at least) (5/2/2005)
I have often compared the process of multi-level marketing to the heroin trade, where people sell to pay for their own consumption and nobody makes any money except the crooks at the top. It seems that experts in organised crime see even stronger connections.
In 1998, Professor G. Robert Blakey was retained as an expert witness in a court case between Amway and Proctor & Gamble. Professor Blakey is not just any old professor of law, he is the person who helped construct the anti-racketeering laws in many US states, and was also influential in drafting federal legislation which has been used to put some very big Mafia pins behind bars. This is a man who knows criminality when he sees it, and this is his opinion of Amway:
It is my opinion that the Amway business is run in a manner that is parallel to that of major organised crime groups, in particular the Mafia. The structure and function of major organised 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.
Apparently, Amway don't like Professor Blakey's opinion being made public and have tried to have it removed from several web sites. Now they have another one from which to have it removed. Read Professor Blakey's report here.
Amway and tax (5/3/2005)
One of the lies that used to be told to potential recruits into multi-level marketing schemes was that as they would be running a business they would be able to claim all sorts of tax deductions against income from other sources. In 1996, the Australian Taxation Office put a stop to this nonsense by defining a business and stating quite clearly why being an IBO was not one. Of course, you could and still can claim deductions up to the total amount of income from that source, but this wasn't what the uplines were saying. I particularly liked the case of one person who was trying to claim about $12,000 per year in lease payments on a BMW because he was selling about $250 worth of Nu Skin products. What was really impressive was his tremendous optimism, because at the same time he was claiming even more deductions for the car because he said he needed it to transport his tool box to his job as an aircraft mechanic. The judge did not reward his optimism.
Two multi-level marketing organisations, Amway and Omegatrend, have reached agreements with the ATO about the tax positions of distributors. I have no doubt that the existence of these agreements is used in the sales pitch to prospects, but I also have no doubt that the actual wording of these agreements is never provided, nor is any idea of where anyone could go to read them. Yes, there are such agreements, but all they talk about is how high you have to get in the matrix before you can convince the tax office that what you are doing looks something like a business, and all they talk about is losses. Losses - those things you get when it costs you more to run the business than the business brings in. If 10% of the lies told by MLM spruikers were true, who would be worrying about the tax accounting for losses after the first few weeks?
I am gathering some information about what it really means to be at certain rebate levels in Amway and Omegatrend, and I will have an analysis of how impossible it is to make money (or to be able to deduct losses against other income) here one day. If anyone has any current or recent information about the compensation plans of either organisation, please contact me.
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.
Date: Sun, 24 Apr 2005 15:28:28 -0700
From: Swati Fernando
Subject: check your facts
Your web site is an interesting one. And for the most part, I agree wih many of the things that you say. But you need to be informed that Alticor does not only sell products that Access Business Group manufactures, but they are partnered up with over 110 companies to provide the consumer choices when purchasing for their needs and wants. So, when you say that they only sell Amway products, I do not know about the system of Network 21 or the others out there, I do know that Quixtar is the portal where I can get any brand name product of my choice. And in return for loyalty of buying through their site, I am rewraded a number of ways. Either through points, through volume discounts, or through commission cheques. Costco charges a yearly membership to be ablel to buy through them. So do many tother companies. This is a useful way to "entangle" customers witht he company and the company rewards them with benefits. In this case, with Quixtar, it is money.
On one more note, the fellow at the bottom is able to make more money than the sponsor or even higher up. It all depends on volume and produciton. If the sponsor is unable to meet certain growth targets, and his down line are exeeding his/her performance, then the downline will make greater sums of money. There is even a point where if the down line acheive a certain growth target, they are removed from their sponsor and operate directly with Quixtar. This is what fundamentally violates the very structure of a pyramid.
In case, you were not aware, pyramid schemes are illegal in all first world nations. The system that Quixtar has is place if neither MLM nor is it a pyramid. If I want a Sony TV I can get it! I think that you spin more baseless fear than what actually is the case. I have read the documents of the Congressional hearings to see in indeed Quixtar is violating US law and the transcripts tell us that it is a viable and acceptable business to operate in both Canada and the USA.
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.
Subject: Wondering and having a jolly good laugh at the same time
Date: Tue, 03 Jul 2007 22:37:24 +1000
Goodness me, you certainly are a ratbag aren't you?
Even with all your logic, you can't explain why the Amway Corporation continues to prosper and why people volunteer to "have a go" and why some, not all, achieve their aims and that really sticks in your craw doesn't it?
(Where's your rant against the bumble bee, then? How dare it fly and defy physics! To the laptop!!!)
Why? What is so reprehensible to you that you must embark upon such vitriolic perambulations of the mind?
What is causing you to choose to project an image of being such an unpleasant individual?
You're obviously not involved, and have no interest, so why get so hot and bothered? Why display your baseless hostility so blatantly? What's the payoff?
Do you do the same when some prospect refuses your software/hardware? That would be fun to watch, I'm sure….
If I were to say that you a lying crook for offering someone your highly suspect software/hardware products and call anyone buying them a sucker then I daresay you would do one of two things. Dismiss them as ignorant or get undone. From the tone of your writings I'm thinking the latter. I may be wrong.
As I don't know what products you're offering, I wouldn't embarrass myself by appearing ignorant.
You are choosing to remain clueless about Network 21 and unwilling to learn different. Good for you.
You obviously choose not to agree with the judgement of the authorities in the United Statesthat the business model is not an illegal pyramid, a view supported in Australiaand at least another 90 countries/territories. Bully for you.
In the end, your opinion can be summed up in two words.
Right minded individuals will investigate and judge the business on merit and on how it can help them achieve whatever it is they want.
Others will succumb to the preachings of a naysayer like you. At least you're assured of being less misguided than them.
It's a pisser of a way to get recognition though…
Relax a little. Find something useful to do…
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.
From: Andrew Curling
Subject: FW: Hello again
Date: Mon, 09 Jul 2007 15:55:16 +1000
You didn't reply to me because you had no response that could or would paint yourself in a pleasant, intelligent light. You haven't "said it all before" at all.
Re: your comments about the bumble bee. It's good that you're prepared to examine more thoroughly the physics involved.
It's a shame you have chosen not to investigate this issue objectively and thoroughly. I'm sure you did your best. It just wasn't good enough...
Your comments regarding Jay Van Andel were reprehensible but not unexpected. You must pander to your disciples, the "even-more-pitiful-than-you"… or EMPTY's, for short.
I'd pay good money to see you repeat them in front of his family but given your cowardice I'm betting my money won't be spent. You're just not good enough, after all...
People who lose money in ventures fail to properly investigate the responsibilities and risks involved. It doesn't matter if it is in business or investments, traditional or otherwise.
In the case of the Amway or indeed any other business, there is a need for an "employee" to understand the change in mindset required to run a business. Too many remain locked in the employee paradigm and are unwilling to learn different. That is why they fail.
I'm sure that even in your university days, so many, many, many years ago, fewer finished courses than started them. Was the course wrong or could the students simply not "cut it"? (It's alright, I know the answer.)
Look, you obviously believe you're educated enough. You're not,...obviously.
Your paradigm encompasses narrowness of mind and scepticism, so you do satisfy the requirements of that charter. Well done!
You can't or won't change your views because it would be too difficult for you to explain all the decisions you've already made. (Big loss of face involved upon realising the stupidity of your thoughts and actions).
Your contempt for everything, apart from your own delusional ilk, and your lack of humility ensure your place as a member of the vanguard for insignificance and obscurity. ("Follow me, EMPTY's!", "Where to?", " Nowhere! Let's go! I know a shortcut!")
You are a fine example for people, especially your children, of what not to be. Again, I'm sure you did your best. It's just that you're not good enough...
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.
Date: Wed, 29 Aug 2007 19:02:04 +1000
i thought i'd say a few words on AMWAY..
This company has operated since 1959,
It was once primarily a soap company, but now it works in association with Nutrilite (the worlds largest viatmin and seupplement company) as the Wellness revolution is going to be the next huge trend (it already is),
Amway sales increase every year,
More IBO's in the business than ever before,
Amway opens in new markets and new contries every year - making it available in over 90 countries,
There is no salesman from Network 21 doing the presentations.
Every Network Marketing company tries to copy Amway - but none can.
I feel sorry for you unintelligent and petty minded individuals for being so misinformed and believing the first thing you're told.
I'm in Amway and i have the freedom to work when it's convenient for me, earn more money than all you wowsers put together and will continue to live my dreams, all because i bought a few products and found that the products were awesome then just told a few people..
You poor cynics:
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.)
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.
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:
The judge's ruling to allow Amway to continue is contingent upon:
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:
(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.)
Amway needs help (3/7/2010)
I'm reading my local national newspaper the other day and there it was - a full page advertisement for the Amway opportunity. Not the products, or information about where you can buy them, but an advertisement to attract more people to join the scheme and become wealthy and fulfil their dreams. There were the usual testimonials from people who claimed to have had enormous success from participation in Amway, and again their success was measured in possessions and flamboyant lifestyles. I particularly liked the woman who said that "a ring from Tiffany's New York reminds her daily that they are on the right track". As shallow as a carpark puddle. (Oh, and the company refers to itself as "Tiffany", not "Tiffany's", but what is a little ignorance of a jewellery supplier's real name when you are trying to impress people?)
It isn't the testimonials from people who might or might not even exist claiming successes that might or might not have been achieved (have you ever met anyone who was able to retire on their Amway income?) that bothers me. This is all just standard operating procedure for all multi-level marketing scams, where a large amount of sizzle is promised but the steak is very hard, if not impossible, to find. It is the use of celebrity endorsements, where the celebrities are not mathematicians or psychologists who might be able to actually analyse the opportunity and why it might be attractive. In this case Amway have coopted two sporting heroes, swimmer Libby Trickett and cricketer Adam Gilchrist. (Amway donated $35,000 to charity following some impressive scoring by Gilchrist in the Indian Premier League. I wonder how far $35,000 would go shopping at "Tiffany's New York", but I digress ...) Both of these are very fine people who have reached the very top of their sports, and nobody would suggest that this doesn't take a lot of hard work and dedication. It irks me that this work and dedication is being used to lend a veneer of respectability to a scheme which rewards hard work and dedication with failure for all except the very few with the lack of ethics needed to reach the top of any MLM scheme.
The Scamway business opportunity (18/12/2010)
A few years ago Amway felt the displeasure of the UK regulatory authorities, and there was for a time the wonderful hope that they might even have to close up and run away. Unfortunately, they reached an agreement which allowed them to keep the doors open, and part of that agreement was that they had to introduce a class of dealers who only sold product, with no need to go out recruiting, and that they had to publish a report each year showing where the money went. The October 2010 report has fallen into my hands, so let's see how successful all the hive members were during the twelve months to September 3.
These are the people who just sold product. Remember that anyone showing the plan will tell you that it's all about selling products which everyone will clamour to buy because MLM will be replacing 50% of the supermarket trade any day now. Out of 13,270 Retail Consultants, only 5,522 received any income at all during the year. Any income at all. That means that the other 7,748 couldn't even sell enough to their families plus buy enough themselves to meet the minimum for payment of commission. I imagine, however, that those 7,748 people are very impressed with this amazing business opportunity and are already planning their extensive holidays on the Côte d'Azur on the income.
But how much did the people who made money make? Amway say that the "Average monthly CVR for Retail Consultants earning a CVR" is £42, but this is the average payment, not the average per month per participant. As it could reasonably be assumed that not everyone received commission every month, the actual monthly average is less than that. The maximum anybody got in any month was £976 and the minimum was £14, but it is quite possible that the people earning these only received one payment during the year. Whatever the case, it puts the maximum income for anyone in the category at something less than £11,712 per year, which I doubt is enough to fund a three-bedroom apartment at Canary Wharf with a Bentley in the garage. Actually, the maximum income is £6,999, because above this the member rockets to Platinum!
Certified Retail Consultants
Now we are getting into the real business opportunity, where participants get to build their businesses by creating a downline of people who will do the hard work of selling and then funnel the profits upwards. Members of this group are on the way to walking the beaches of the world while residual income just gushes into their bank accounts. There are 7,640 of these, of which 6,211 actually received at least one monthly commission payment during the year. The total number is interesting, as it is more than 50% of the number of "Retail Consultants". This must mean that there are people who have nobody or at most one in their downlines at all, made worse by the fact that many of the "Certified Retail Consultants" must be in the downlines of their peers.
Average monthly income for this group was £114, which seems hardly enough above the pay for just selling to justify the management hours that have to be put into recruiting and supporting the workers. Maximum monthly income of £4,200 sounds good when you multiply it by 12, but as getting that much would mean earning at Diamond level (see below) it is highly unlikely that anyone got it. In fact, getting the maximum for just two months would see the person promoted out of "Certified Retail Consultant" and into the rarefied air of "Business Consultant". And you would have to feel sorry for the "Certified Retail Consultant" who only got £5 one month, although he is luckier than the 1,429 people who got nothing at all for their efforts.
Here is where the big money is. These are The Big Pins, the people to be looked up to, idolised and fawned over at functions. The people who have made it. The people whose pictures are in the recruiting manuals, showing their boats, their cars and their fancy houses. And just look at how much money they make, Why, one of them, count that again, one of them gets more than £50,000 per year! Have I mentioned that every time I have been shown the plan I have been told that anyone can reach Diamond in two years? There must be a lot of losers doing stinkin' thinkin' among Amway UK's 20,959 participants if they can only turn up one Diamond to worship. Perhaps the three people getting more than £15,000 a year are approaching Diamondhood. And there's always the 0.21% of participants earning more than £7,000 at Emerald level who are on the ladder to success.
Wait a minute. 20,959 participants, with 1 getting more than £50,000, 4 getting more than £15,000 and 49 getting more than £7,000. It doesn't sound like a very good business to be in, especially for the 9,069 who get nothing at all. One person gets heaps at the top, a few get some crumbs at the next couple of levels down, and 43% getting nothing at all. I wonder if these figures are pointed out to new recruits. No, I don't wonder at all. The spiel will be the same as it has been for years - get in now and retire rich. It was a lie when the first pyramid scheme operator said it. It is a lie now.
Perhaps they could use this pyramidical graph as a training aid.
Did I upset someone? (3/9/2011)
Every month I run a check for broken links in The Millenium Project, and for the last couple of months I haven't been able to access Amway's US web site. At first I thought it might be geoblocking - Australians being restricted to the local site only.
I tested today and I can get to the site using the browser on my smartphone and by using my mobile broadband account, but I get a "12029 Cannot access server" when I try using my ADSL connection. A friend of mine in Sydney was able to connect without any problem, as were a couple of friends in the UK.
My phone, mobile connection and ADSL are all through the same ISP, so it isn't just a block on a specific provider. The difference is that the phone and mobile service get a different IP address every time they connect but my home office has a fixed IP.
It would make my day to find that Amway have specifically blocked me from looking at their site. It would be almost as good as the day I found myself outed as a member of the Illuminati on David Icke's site (a page now sadly removed).
Who could have imagined that what I said here could be so powerful?