Amway is one of the largest companies in the direct marketing field and, after sixty years, is still going strong. It's an unusual MLM in this sense, especially as it also offers such a wide range of products. In fact, Amway currently boasts more than 450 individual items.
The product selection is definitely a good thing. This provides distributors with the chance to target many different markets and types of customers. Doing so is much better than being stuck with just a single type of product to promote.
The main similarity between the products is a focus on quality. While Amway doesn't say that its products are better than most others, the idea is certainly present in the company's marketing. They even have a ‘100% satisfaction guarantee', which should mean that customers are always happy (of course, such guarantees never quite work as well as they claim to).
Amway also happens to focus on popular fields, ones where products always sell. Beauty and nutrition are two key examples of this pattern.
Despite all of these advantages, Amway has some distinct limitations. The company's reputation isn't the best, an issue that can make sales and recruitment much more difficult. These issues make it important to seriously weigh up what Amway has to offer before making any commitments to the company.
Two Ways To Make Money With Amway
The two approaches for earning money through Amway are well-known. The first is to simply sell the products. This process earns you commissions from sales, but your income is always directly linked to your sales efforts.
The other angle is to build a downline as well. This style allows you to earn some income and bonuses from the performance of your team. The potential to earn is naturally higher, as the sales that you make are only one aspect of your total income.
While the approaches may sound fantastic, they both come with challenges. That's why this post weighs up the pros and cons, then considers the overall potential for earning through Amway.
As I mentioned previously, Amway does offer a wide range of products, and there is certainly still a demand for them. This company has been around since 1959, and although it's gone through changes over the years, I don't think it could have survived this long on hype alone.
The volume and variety of products mean that you'll be able to find something for everyone, which will make selling something easier than other MLMs which may only have 3-5 core products to promote.
The products are also appealing in their own right. They look good visually and many are types of items that customers already purchase regularly.
In a sense, the product style is a double-edged sword. Sure, the products look are familiar and desirable, but they're not very unusual. They're simply different versions of items that are already common in the marketplace. How will you convince customers to rely on Amway products rather than their preferred brands?
Unless a person is already an Amway customer, your job is going to be to get them to pick up a new habit, or switch brands. That's the hardest type of “sell” for a marketer.
It’s easy to assume that you can sell products to friends and family members, but most people find that it isn’t that simple. Many friends will simply have no need for Amway’s products, or will already have brands that they are loyal to. Some will get annoyed, and you may even ruin your friendship.
Making Money Through Sales
Amway follows a reselling model for income. Under this model, distributors need to purchase the products and then resell them for a profit. While Amway publishes a recommended retail price for each item, distributors are free to choose their own price instead.
This approach to sales involves significant risk for distributors. You need to purchase the products first, then turn around and sell them. You'll only turn a profit if you sell most (or all!) of the items that you buy for at least as much as you pay.
While doing so might sound easy, it can be quite difficult. After all, the products from Amway aren't especially cheap, even when discounted. This means that you're investing a decent amount of money into the company.
Finding the balance between your orders and sales can be difficult. Even owners of traditional businesses often struggle to fully predict demand and risk having unsold stock. The problem is much more difficult for Amway members, as most will be complete beginners in the field.
Amway takes an interesting approach to building a team. Unlike most MLMs, your income isn't strongly linked to the precise structure of your team. Instead, income is linked to overall sales.
Because of this structure, you can earn some bonus income simply from sales – even if you haven't recruited anyone. You could even get your bonuses fairly high (in theory), simply by making enough sales.
Even so, most of the income potential comes from building a team as well. This is largely because your performance bonus is based on business volume (BV), rather than your own sales volume. If you had a large successful team under you, then the amount earned as a performance bonus could be high.
It is also possible to pass up the volume from direct recruits. The image below shows how Amway depicts the system.
Structures like this can be very frustrating. Sure, they provide more ways to earn, but they're complex to follow and even more difficult to optimize. The structure is only effective if you can get a decent number of people under you and ensure that they're making sales. Doing so is no easy feat, especially with a purchase-first method of earning.
There are various bonuses and requirements associated with this compensation plan, but there's just one more that I want to highlight – the rank structure. Ranks are common among MLMs as a way to measure progression.
Every rank that you progress through comes with additional bonuses and higher potential for earning. Some ranks also provide recognition or other advantages. Ranks also have requirements and these get high quickly.
The nature of these requirements means that relatively few members progress up through the ranks. Most remain stuck at the first rank or two and find that their income is limited as a result. This would be bad enough in any MLM, it's even worse in an MLM like Amway where you need to purchase the products and then sell them.
While it's easy to view Amway's long history and final success as advantages, these areas can also create considerable challenges for distributors. The issue is relevant to anyone wanting to make money and also influences your potential to recruit others.
Unfortunately, most people have already heard of Amway in some way or another, and have formulated an opinion on it. They probably know someone that started and failed or were annoyed by a friend of the family that kept knocking on their door.
It's unfortunate, but because there's a low cost to entry for this company, it means there's a lot of low-quality IBOs and newbie marketers out there that have given the company a bad name. So this is what you're starting out with!
Amway is also a highly controversial company. It is often called a scam, with critics also complaining about a cult-like mentality. Former members talk about the company's rhetoric, including the way that high-ranking distributors use emotional manipulation to keep members engaged in the organization.
A quick Google search will reveal countless similar concerns and stories. Many of them come from previous distributors who have lost money trying to live the Amway dream.
There have been various investigations, lawsuits, and controversies featuring Amway over the years. One of these was a class-action lawsuit in 2010, which Amway settled without any admission of guilt. A similar lawsuit occurred in Canada, while there have also been investigations into some of the international arms of the organization.
Amway distributors might dispute some or all of the claims made against the company, but in a way that doesn't matter. Even if all of the negative reports were false (which they don't seem to be!), the damage has already been done.
All the negative press surrounding Amway will make it very difficult to recruit anyone into the company. You would need to be able to refute the various accusations and convince potential recruits that income really is possible.