Is Amway a Scam?

If you’re thinking of becoming an Amway rep, you need to know: Is Amway a scam? 

Below, we explain whether Amway is a scam and discuss some steps you can take to improve your safety when using this online platform. 

What Is Amway?

Amway is a multi-level marketing (MLM) company where independent business owners (IBOs) sell health, beauty, and home care products directly to consumers.

IBOs must purchase a starter kit (a few hundred dollars’ worth of products) and then earn commissions on their own sales as well as bonuses from the sales of their recruits.

The system is designed so that Amway makes a profit on every sale, and the bulk of income for top earners comes not just from product sales but from selling motivational materials and organizing seminars.

Is Amway a Scam?

Depends on your definition of “scam.”

Amway is a multi-level marketing (MLM) company that’s often referred to as a pyramid scheme scam. 

Critics say Amway’s structure resembles a pyramid scheme because income is mostly generated not through direct consumer sales but rather by recruiting new members. 

In 1979, the Federal Trade Commission (FTC) ruled that Amway was not a pyramid scheme because it has specific operational rules, like return policies. However, the FTC did find some issues with Amway, like its price-fixing and exaggerated income claims. 

Studies show that a vast majority of MLM participants lose money. 

According to Amway’s website, the top 10% of Amway’s IBOs made $14,600 (average) and $4,971 (median) in 2023. The top 50% of IBOs made $3,448 (average) and $675 (median) in 2023 (before expenses). 

In 2010, Amway agreed to pay $56 million to settle a lawsuit that accused the company of misleading distributors about how much money they could really make and the costs they’d face, essentially operating like an illegal pyramid scheme. While Amway didn’t admit any wrongdoing, the settlement required it to change how it trains and supports its sellers.

Some Amway distributor groups have been criticized for employing “cult-like” tactics (using motivational seminars and rallies that resemble religious or revival meetings) to recruit and retain members. 

People’s opinion of Amway is negative on online forums. 

The overall sentiment is highly skeptical and cautionary. Most individuals view Amway’s model as essentially a pyramid scheme and criticize the heavy focus on recruiting and selling expensive motivational materials over actual product value. 

Many also refer to Amway’s “cult-like” tactics to maintain loyalty among members and discourage them from leaving. 

So, Should You Become an Amway Rep?

Probably not. 

Most people who join Amway never earn a sustainable income. 

The vast majority of distributors spend more on products, fees, and motivational materials than they actually make from sales and recruitment. 

How to Safely Become an Amway Rep

• Do your research. Read independent reviews and legal cases, and take a look at Amway distributor earnings. Make sure you understand the business model, its costs (like fees, product purchases, and any recurring expenses), and the realities of earning potential. Talk to current and former distributors about their experiences.
• Protect personal relationships. Don’t recruit friends or family if you can help it, as this might negatively affect your relationships.
• Plan for the long term. Understand that MLMs often require years of effort before seeing any return, and even then, the vast majority of distributors earn little profit. Have a backup plan in case the venture doesn’t work out.