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Is Amway A Pyramid Scheme?

A lack of understanding about Amway’s direct selling business model causes people to ask: Is it a pyramid scheme? Is it a scam? Is it a fraud?

Here are the facts about who Amway is, how it operates and how its Amway Business Owners (ABOs) make money.

a lack of understanding about amway's direct selling model

Is Amway a pyramid scheme?

Amway is not a pyramid scheme. It is a direct selling organisation where ABOs make money through the sale of products. Pyramid schemes, by contrast, have nothing to do with real commercial activity. They are a form of financial fraud that is based on recruiting new people to make investments that are then used to pay the people who joined earlier.

Amway doesn’t operate this way. ABOs don’t make any money by bringing more people in – not a single cent. They make money when products are sold, not from recruiting. On each product sold, Amway sets aside a portion of the product cost as a “bonus”. This is shared by ABOs who work together in sales groups, according to their contracts with Amway.

In addition, the risk to ABOs and their customers is low: ABOs are not required to purchase products. Any products that are purchased are backed by a 90-day 100% Amway Satisfaction Guarantee*. And the RM60/B$30 registration fee is fully refundable upon resignation within the first year.

As a direct selling company, Amway provides its 3 million business owners around the world with the opportunity to supplement their income through product sales, to mentor others who share the same passion for Amway products, and to become part of a business that can balance work with family.

According to the World Federation of Direct Selling Association, the global direct selling industry was worth US$179.3 million in 2020. In Malaysia, it was worth RM19 billion and recorded a total of 3.2 million active distributors. Direct sellers describe work-life balance, networking opportunities and income potential as their chief motivations for staying in the industry.

Amway is guided by values

What is Amway?

In 1959, Amway launched a direct selling business fuelled by relationships. The vision was, and continues to be, simple: Work every day to help people live better lives.

The concept of partnership is a cornerstone of the Amway business, established by and between its two founders. It now encompasses the founding families, employees and business owners. Decisions are guided by what is in the long-term best interest of ABOs.

That vision is played out daily as the company helps people everywhere discover their potential and achieve their goals by offering great brands and opportunities. Amway is guided by six enduring values: partnership, integrity, personal worth, achievement, personal responsibility and free enterprise. Sharing generously with the local communities in which the company and its business owners operate is an important part of this.

ABOs span the globe, from the Americas to Europe, India and Africa to Greater China and the Asia-Pacific region. The company’s low-cost, low-risk business model sets ABOs up to reach their goals. It quickly and efficiently addresses the needs that may vary according to geography and culture. Details large and small, from navigating local selling regulations to product sizes and brand preferences, are coordinated in conjunction with local governments, business owners and consumers.

Sustainability is a core principle, as well, and has been for decades. Amway controls much of the process, from where ingredients are sourced (some come from nearly 6,000 acres of Amway-owned certified organic farmlands), to where they are manufactured. In addition, 50% of the energy powering Amway’s world headquarters in Ada, Michigan, is wind-generated. These are best practices in the industry and they have been a part of Amway’s DNA from day one.

Amway is direct selling organisation

How does Amway work?

There is no one-size-fits-all way to make a living, and never has been. The result is a need and corresponding demand among today’s workforce for diverse options. Direct selling organisations like Amway offer a low-cost, low-risk option for individuals to supplement their income. ABOs use and sell high-quality nutrition, beauty and home products to consumers.

The more product sales they generate, the more income they can earn. Many also choose to build businesses by sharing the Amway opportunity with others and teaching them how to sell. This can mean greater reach for the product and ultimately higher income because of team sales volume. In short, ABOs make money from the sale of our products – sales that they and the team they support generate.

Since 1959, Amway has paid out nearly US$63 billion in bonuses and incentives to its business owners worldwide[1] – more than any other direct sales company in history[2].

To get started, ABOs in Malaysia and Brunei pay a registration fee of RM60/B$30. Under the company’s 90-day 100% money back guarantee* and generous refund policy (within the first year), it is very easy to leave the business if someone decides it is not for them.

Business owners receive education materials and online training which is available 24/7 on mobile devices and in multiple languages. Educational and training topics include product information, how to sell them, how to earn income, how to grow a business, and how to be a leader. In addition, Amway offers business tools, including a mobile-friendly website, apps and customer service support. Compared to the cost of starting almost any other kind of business, the cost to become an ABO is minimal and low-risk.

Like any company that wants to thrive, Amway fosters and rewards go-getters based on their own results and hard work. Here’s the breakdown of the three ways ABOs make money:

  1. As with any retail business, ABOs make money when they sell Amway products.
  2. They earn bonuses from the company based on their personal product sales volume. As their business grows, they can earn additional bonuses from the company based on the product sales volume of their team.
  3. ABOs are awarded with growth incentives for key achievements in growing and helping their team succeed.

Millions of people have chosen to start their own Amway businesses, selling the company’s home, beauty and nutrition products as a way to earn extra money while defining their own success. For some, it could mean paying for tutoring or music lessons for their children or helping to cover monthly bills. For others, it could mean much more.

The work of a business owner is all about personal connections. Consumers have a strong desire to support small, independently owned businesses and they know direct sellers can provide a high level of knowledgeable, personal service. Through the Amway network, consumers can access exclusive, high-quality products, which ABOs can sell on their own terms. As these direct selling teams grow and sell more products, ABOs make more money.

ABOs use and sell quality products

It’s all about quality products

Amway’s original product, Liquid Organic Cleaner (L.O.C.), was one of the first concentrated, biodegradable and environmentally sensitive cleaning products on the market. Since then, with a similarly pioneering and purposeful spirit, Amway has gone from selling simply home products to become a global leader in health and beauty too. For decades, the company has focused on environmentally sensitive and biodegradable products.

Amway’s leading brands include Nutrilitevitamin and mineral dietary supplements and ARTISTRYskin care and cosmetics. In addition, the company offers the eSpringWater Treatment System; Amway Home environmentally conscious home cleaning products, and Atmosphere air treatment systems, among others. ABOs across the globe build their businesses on these brands.

As global leaders in phytonutrient research, skincare, water and air purification advancement, nearly 1,000 Amway scientists, engineers and technicians collaborate to create new products that support ABOs and the needs of their customers. The company’s global research projects influence not only Amway’s product development, but also contribute to the larger R&D community.

A growing legacy

Amway has been in business for almost 60 years, and is now home to more than 1 million ABOs worldwide. The company has paid more bonuses than any other direct seller and is accredited by the Better Business Bureau.

Amway remains committed to the family-owned company’s core founding belief of helping people reach their potential, and the company plans to continue to direct its energy to empowering people and communities for decades to come.

The company is passionate about making sure everyone connected with Amway has a positive experience.

*Terms & Conditions apply.

[1] Amway records

[2] Euromonitor International Limited, euromonitor.com/amway-claims