Amway

Amway generally refers to an international multi-level marketing (MLM)

Criticism

While supporters of the system point out that Amway offers an easy way to earn money on the side and that it makes sense to buy products for personal use "from your own business" at wholesale prices, critics charge that even the wholesale prices published by Amway often exceed retail prices elsewhere. Supporters of the system usually respond to this by maintaining that many of their products, such as cleaning solutions, come in highly concentrated form, and therefore may still be competitively priced when that is taken into account, and the manufacturer generally claims that their products are of higher quality than less-expensive similar products. However, it is worth noting that this explanation cannot apply in the area of all products.

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Like many multi-level marketing operations, Amway has been called a pyramid scheme. Critics point out that participating in the system is not free, that AMOs often emphasize the recruitment of new participants over selling products and that many distributors spend little time actually selling products to others. It is also alleged that the "70% rule" is not sufficiently emphasized to new recruits, and that few products are ever sold to people outside of the Amway organization. The 70% rule states, "To ensure that distributors do not attempt to secure the performance bonus solely on the basis of purchases, Amway requires that, to receive a performance bonus, distributors must resell at least 70% of the products they have purchased each month. (RX 331, pp. 16­B to 17­B) The 70% rule has been in existence since the beginning of Amway. (S. Bryant, Tr. 4086) Amway enforces the 70% rule."

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Another criticism is that only a small fraction make any money at all, with the average distributor making around $100 per month before expenses and operating at a loss after expenses. Amway supporters reply that the organization does not have fixed working hours, and that how hard a distributor works (if at all) is a personal choice. The implication of insufficient effort or laziness is resented by former distributors who say that they got nothing for the sacrifices they made. Supporters of the system might suggest that it could be that an individual's personality and people skills are factors, as are such external circumstances such as the state of the economy and the receptivity of the market, factors which vary considerably from one place to another.

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Critics also assert that AMOs target psychologically vulnerable people, and that some distributors have become alienated from family and friends who were invited to become sub-distributors or customers and resented the attempt to turn their personal relationship into a commercial one. Amway supporters reject this as an exaggeration, pointing out that the Amway manual prohibits taking advantage of sub-distributors, but in such a large organization comprising such diverse individuals and groupings, the possibility always exists of certain individuals abusing their power over their "downlines".

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The Amway recruitment process has been the target of much criticism. Although it varies from organization to organization and from country to country, the common thread is perceived as aggressive and manipulative, and lacking consideration for the personal financial situation of the prospective IBO. Recruitment seminars often feature catchy music and fanfare as high level IBOs give testimonials of their success, with gaudy displays of their material wealth. Christianity and overt patriotism may also figure highly at seminars (particularly in the US), which many consider inappropriate in a business setting.

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It must be noted that Amway has changed enormously over the past 15 years, (1990-2005) presumably in an effort to remain appealing to potential distributors/IBOs, and in an attempt to shed the distributor organisation's public image. The name change to Quixtar and the associated metamorphosis is reminiscent of actions taken by numerous other groups.

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G. Robert Blakey, a professor from America's University of Indiana, authored a report about Amway as an expert witness in the case "The Proctor & Gamble Company, et al. v. Amway Corporation, et al, Case No. H-9723 84 (S. D. Texas, Houston Division)."

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