Amway is short for American Way, and the Amway MLM system was founded in 1959 by Rich DeVos and Jay Van Andel.
The business sells a wide range of products, including home care item,s as well as a health and beauty range.
Amway is based in Ada, Michigan, and it relies on affiliates to sell its products. The range of items that are available under the Amway banner today includes personal care products, jewelry, electronics, water purifiers, diet supplements, cosmetics, and more.
The Growth of Amway MLM
Amway’s initial launch was limited to the United States only. The company launched with just one core product – an organic cleaner called Frisk. They later expanded to offer the supplement Nutrilite under the Amway banner.
In the 1970s, Amway MLM began an aggressive expansion plan, offering their services first in Australia, then Europe, Asia, and Japan. Over the next 30 years, they continued to expand to Latin America, China, Africa, and even India, Scandinavia, Ukraine, Russia, and Vietnam, becoming a truly global enterprise.
However, in spite of this aggressive expansion, most people still think of Amway as a purely American company. Certainly, their brand recognition is not as strong elsewhere as it is in the United States.
How Amway Works
Amway uses a combination of direct sales and MLM. They refer to their sales people as Independent Business Owners, or IBOs. An IBO may market the products in the Amway catalogue directly, or may choose to recruit other people to become IBOs. Instead of calling this recruiting process “referring” someone to be an IBO, it is called sponsorship. Each IBO earns income via the retail markup on the products that they manage to sell, and they also earn a bonus based on their performance and the performance of the people in their downlines. Some people choose to register as an IBO with no intent of actually selling to other people, and simply take advantage of the chance to buy Amway products at discounted prices.
Is Amway MLM a Scam?
Amway’s business model is based on a tiered distribution and renumeration system. The more people sell, the more money they stand to earn. Recruiting new IBOs is heavily incentivised, if you will, and this has led to some people accusing the company of running a pyramid scheme. However, Amway is one of the most profitable direct selling businesses in the United States (possibly the most profitable in the world), and the way that the business operates is not illegal.
In 1979, the US Federal Trade Commission investigated Amway and ruled that their business model was not a pyramid scheme because payments were not made simply for recruiting people. For a person to get a bonus check, they have to sell real products.
In addition, Amway is committed to buying back any leftover inventory, so IBOs should not end up out-of pocket.
Making Money With Amway
If someone were to join Amway MLM as an IBO today, they may struggle to establish themselves as a distributor. Working as a distributor is not a guaranteed source of income, and just as with any other MLM scheme, there is no guarantee that you will earn a living through Amway. However, there are some ways that a tech savvy and motivated marketer can increase their chances of succeeding as an IBO in the long-term.
Instead of relying purely on the traditional door-to-door sales model that IBOs have used for so many years, why not try advertising your products on local forums and listings sites? Get to know local clubs and organizations, and distribute flyers so that customers come to you.
Promote Amway’s cleaning products and supplements to health clubs, sports groups, and other associations that are likely to want to buy a lot of those items. Doing this will give you a reliable stream of income on top of the one-off orders you get from individual consumers.
It is this steady income that will help you to pay the bills even if you have a poor month when it comes to day-to-day sales.