AMWAY

WHAT IS AMWAY?

• Founded in 1959
• Company that encourages people to be their own boss
• Products: insurance, cosmetics, jewelry, electronics, nutrition
• Company is worldwide
• 2012 revenue: $10.9 billion

QUIXTAR

• Branch off from main Amway company
• Numerous suppliers and manufacturers

MULTI LEVEL MARKETING STRATEGY

• Make money by recruiting other people to sell products.
• More people recruited=more money for recruiter.

PYRAMID SCHEME

• Participants are promised payment for recruiting new members
• Often, recruiting takes priority over product sales
• In many cases, participants make very small amount of money.

CASE AGAINST QUIXTAR/AMWAY

• Unfair and illegal practices
• Mislead sellers about profits and costs of joining company
• Accusation of being pyramid scheme
• Payed $34mill. in cash and $22mill worth of products

SOME BELIEVE IT IS A PYRAMID SCHEME...

• Unless you recruit, you won't make much money.
• Start up kit $62-$84
• Workshops and functions $200-$400

SOME SAY ITS NOT A PYRAMID SCHEME.....

• In a 1979 ruling, the FTC found that Amway does not qualify as a pyramid scheme
• Reason:
• distributors were not paid to recruit people
• had to sell products to get bonus checks
• the company bought back distributors' excess inventory

INCOME STATISTICS

• Product commissions as little as 1%
• "Active" sellers-average $115/month
• .26% make more than $40,000 a year
• 60% of 600,000 get a bonus check

BIBLIOGRAPHY

• "USA TODAY." USATODAY.COM. N.p., n.d. Web. 05 Nov. 2013.
• "Amway Scam?" Amway Scam RSS. N.p., n.d. Web. 05 Nov. 2013.
• "Amway." Wikipedia. Wikimedia Foundation, 11 Feb. 2013. Web. 05 Nov. 2013.
• "Analysis: Amway Accused of Fraud; Pays $150 Million; Where?s the FTC and DOJ?" Pyramid Scheme Alert RSS. N.p., n.d. Web. 05 Nov. 2013.
• "Heritage." The Amway. N.p., n.d. Web. 05 Nov. 2013.