Is Amway a Ponzi Scheme? My Honest Review Answers That Exact Question!

Amway Website ScreenshotAmway is yet another product selling platform based upon a MLM recruitment structure. Today, I am interested in reviewing this promising website because many of my followers have requested my thoughts. First of all, we need to know ask the important question – is Amway a Ponzi scheme or does it truly feature a legitimate MLM model?

I’ve gone through a number of websites like Amway and the main difference I’ve seen is the use of new terms in an attempt to attract more and more potential members. Does Amway offer a legitimate money making platform? Is Amway focused on product sales? How much can you earn through this platform? I’ll answer all of these questions in this here honest Amway review.

These days, most of the companies operating on a MLM model are becoming increasingly popular. As a recruiter/agent/member, you need to know what it takes and whether or not you possess the skills to make things work. Before going into the details, I’d like to begin with the introduction of the company’s operations.

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What Exactly Is Amway?

Amway has been doing business for almost 60 years and has successfully managed to reach more than 100 countries across the globe. As far as the direct sales are concerned, Amway stands out. Since its establishment in 1959, Amway has been dealing in beauty and health related products. The interesting thing is that the company doesn’t operate through stores but it basically sells products solely through direct sellers.

Amway Products

The Amway Business Model

Amway operates a MLM based model in which it encourages the Independent Business Owners (IBOs) to recruit more IBOs in an attempt to earn commissions. You can earn commissions from your own efforts as well as from the IBOs under your umbrella.

What about product sales? This is the real question because if the company doesn’t encourage sales through IBOs then it could bear the stigma of being a Ponzi scheme. There are a number of reviewers who criticize Amway claiming that business model relies heavily on recruitments. To me, criticizing a company which has been selling its products since 1959 is unfair. We need concrete evidence and solid arguments before calling Amway a Ponzi scheme.

However, it’s fair to say that there is only a very fine line between a legitimate MLM company & a Ponzi scheme – especially when you consider the visualisation of the MLM structure shown below:

Multi Level Marketing Pyramid Scheme

How Does Amway Work?

First of all, we need to have a look at the compensation plan in an attempt to determine whether Amway is Ponzi scheme or not. I must admit that the compensation is a bit complex and at first, it really confused me. Once you join Amway as an Independent Business Owner, you come to know that you there are three major plans which allow you to generate income.

Sign Up

If somebody wants to buy Amway products, you can encourage them to sign up with the platform. You’ll earn commission by doing this which is simple and fair. But please don’t forget that you’ll earn commission when you bring in genuine customers. Once they sign up, you’ll earn commissions from each of their purchases.

Sales

An IBO can purchase Amway products at wholesale/discounted price and then resell them at retail prices. This is the legitimate way of earning money through sales so it is encouraging to see this compensation plan with Amway. It really contributes to its legitimacy and this is what most of the reviewers look for when reviewing an MLM model.

Recruitment

This is what makes people doubt the legitimacy of any MLM model. Amway’s compensation plan also includes commissions against recruitments. The plan involves the pyramid structure (which I showed earlier) through which you earn commissions, climb higher rankings and achieve higher levels to increase your chance for making big money.

The Focal Point

You might have heard the terms Group Volume (GV) and Point Value (PV). These terms have been associated to the MLM models and they reflect the sales volume of an IBO and IBOs under his/her umbrella. This is the real focal point. As GV and PV rises, the percentage commission you can earn also climbs up. This is what forces you to admit that the model is actually encouraging product sales to real customers. Remember that a legitimate MLM model is the one which generates more income through product sales rather than recruitments.

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Is Amway a Ponzi Scheme?

A big NO! Amway is NOT a Ponzi scheme for a basic reason that the company’s model features GV and PV which means that the company is actually focusing on sales and offering real value and genuine products. This is a recommended platform for the skilled sellers who want to lift their income level or properly utilize their free time in a profitable activity.

Do be warned though that there is of course no guarantee that you will make money with Amway, or other MLM’s like it for that matter. The truth is that most people who join these types of companies fail to make any money at all… And often many of them actually just end up spending more than they ever manage to make back.

The image below is a snippet of an FTC publication which highlights the shockingly low success rate within MLM companies:

MLM Failure Rate

So like I say if you’re already an experienced network marketer then it could be seen a good opportunity, but if you’re just a newbie looking for ways to make money then it’s probably not the best place for you to start.

There are actually several other risk-free ways that you can start making money online. One of which is something called affiliate marketing & that’s the same way I personally make most of my own money online so it’s safe to say I highly recommend that… And regardless as to whether you’re new or experienced at network marketing I’d suggest you check it out because in my opinion it’s much, much better.

A good place you can learn more about it is a place called Wealthy Affiliate. There you’ll get all of the tools & training you need to get started with affiliate marketing & it’s a platform that’s been proven to help many people find success.

My Verdict – Is Amway a Scam?

Thumbs DownAmway is NOT a scam and even after spending over a week researching into it I could not manage to find the slightest of hints in this regard. The company has spent more than half a century in the market and its products have really won the hearts of the consumers.

The best part is that the company has grown so much that it is now operational in more than 100 countries. For such a promising brand, it is definitely impossible to indulge in any unlawful or malicious activity.

However despite my positive criticism towards it I still won’t be recommending it & I appreciate that might come as a bit of a shock to you. The simple reason I won’t be recommending it is because I am personally not a very big of MLM companies due to their drastically low success rates.

As I mentioned earlier in this review few people who join MLM companies like Amway manage to find success & most just end up spending more than ever actually manage to make back which is not good at all.

Yes, you can make money with them but it’s much more difficult than it seems on the forefront. For that reason I would recommend you look into something different such as affiliate marketing which carries much less risk (and is much easier to find success with). You can learn more about that over at Wealthy Affiliate if it interests you.

So overall despite being legit, the Amway business opportunity will be getting a thumbs down from me but hopefully you can appreciate why after reading my review. If you do happen to still have any questions though then feel free to leave them below & I’ll answer them as quickly as I can. 🙂

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About the Author:
I'm Dale Rodgers, a former electrician that discovered how to make a full time income online. I've put this blog together to share what I've learned so that I can help others do the same. Read more about me here.

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