Direct selling today is a $169 billion (USD) global industry that’s compelling and competitive – and sometimes confusing to those who don’t know it well. With nearly 90 million people involved in direct selling businesses worldwide, Amway knows a commitment to honesty, transparency and improving understanding is critical to success.
That’s why Amway joins the member companies of more than 60 national and regional direct selling associations in the World Federation of Direct Selling Associations in upholding best practices and exemplifying ethical conduct. And it’s why Amway is committed to answering the tough questions about its business. Here are answers to six of our most commonly asked questions about the industry, business integrity and owning an Amway business.
Q: Why does a person become an Amway Business Owner?
A: Motivations for getting into, and staying in, the Amway business include earning extra income, learning new skills and being part of a supportive community. Many people are motivated by independence – the desire to be their own boss and have control over their time and talents. Others become ABOs so they can purchase products for personal use at wholesale prices, and sell a small quantity to friends and family members. Eighty percent of our distributors report working their business only part time.
Q: How do Amway Business Owners make money?
A: Amway Business Owners earn money in two ways. The first is by selling high-quality Amway nutrition, beauty and home products directly to customers. The second way is through building a sales group and sharing in the bonuses Amway pays on group sales volume, which rewards and recognizes the role a dedicated sales team plays in the ultimate sale of every product, including helping others set and achieve their sales goals.
Q: If Amway is such a great business, why do some business owners leave?
A: Direct selling is not for everyone, and the reasons why Amway Business Owners (ABOs) leave are as diverse as their aspirations when they join. Amway offers a low-risk, low-cost opportunity backed by a money-back guarantee, which helps people make informed decisions about whether Amway is right for them. Amway also invests heavily in training and education to help new ABOs get the best possible start.
Keep in mind that, while some people have joined Amway to start their own business and achieve financial flexibility, others have much shorter-term, specific goals. They might plan to leave the business once they reach those goals.
There have been ABOs whose experience did not meet their expectations, however, we know that this is not the case for many. Our renewal rate among ABOs in the US is more than 60 percent; in Japan, the renewal rate exceeds 80 percent. And in 2013, 77 percent of people surveyed about their Amway experience say they either “agree” or “strongly agree” that joining Amway has had a positive impact on their lives.
Q: Why do some people say they lost money “doing Amway?”
A: It is nearly impossible to lose money in Amway. The cost to join ($62 in the United States) is no more than the average new pair of shoes, and in some markets, joining is free. And the business registration fee will be refunded if an ABO decides the Amway business is not for him within his first 60 to180 days, depending on the country. Any other money spent on products, sales materials or training materials is entirely optional, and most products have a generous return policy that goes above and beyond consumer product standards. Amway also repurchases unsold inventory under our buy-back policy if an ABO chooses to leave the business.
In addition, Amway provides an income simulator in many markets that transparently shows new and prospective ABOs the amount of product they will have to sell, and how they will have to manage their business, to earn their desired level of income. Then, we teach them how to get there. Last year alone, Amway Business Owners engaged in more than 2.1 million company-provided learning activities.
Q: What is multi-level marketing?
A: Multi-level marketing – MLM, for short – is a compensation model used by many companies in direct selling. It rewards people similarly to how many business-to-business or business-to-consumer companies pay their sales teams. In other words, MLM businesses reward their direct sellers for the sales they generate personally, as well as for group sales.
In any direct sales business, whether based on an MLM or single-level compensation model, success takes time, and great reward comes only from great effort.
Q: Is there really a difference between multi-level marketing and a pyramid scheme?
A: Yes. According to the US Federal Trade Commission (FTC), in legitimate multilevel marketing plans, the money a person earns is based on sales to customers. There are additional distinct differences, which FTC described in a recently published article on its consumer information website. These distinctions are essentially universal in all countries and territories where Amway does business.
Amway offers people the opportunity to own their own businesses, where they make money by selling products and building a team of others who sell products. Payments are never made for the act of recruiting others into the business. Building a team enhances their income because it generates product sales volume, but it’s not required. Everyone in an Amway business is paid on the same bonus structure, and all payments are calculated and delivered by Amway to ensure their accuracy.
By contrast, pyramid schemes transfer money; they do not focus on product sales, and therefore are unsustainable. In a ruling that stands today, Amway was recognized by the FTC as a legitimate MLM whose business owners sell quality products to consumers, and where no one earns income unless products are sold.
Across the world, in more than 100 countries and territories, the Amway business opportunity is recognized as a legitimate model for entrepreneurship, in large part because:
- There are no minimum order quantities.
- Amway Business Owners cannot make money on recruiting alone.
- Retail selling is required.
- Amway Business Owners can earn more money than the person who sponsored them.
- The business registration fee has a 100 percent money-back guarantee (within the first 90 days), and most Amway products have a 100 percent customer satisfaction guarantee.