There once was a time when Amway was a household name in product marketing and branding circles. It seems as if Amway disappeared from my brand consciousness over the past decade or so. That is why I was so curious about the multitude of Amway commercials that I saw over the holidays. They dominated sporting events from NCAA Bowls, the NBA, and ESPN's ubiquitous SportsCenter.
Was the campaign aimed at raising awareness of Amway or to jazz the thousands of Independent Business Owners who promote and market Amway products every day? They pumped serious money into the production values of the spots that are voiced over by John Tesh. Are they looking for new people to join the ranks of Amway distributors? Given the state of the economy and the double-digit unemployment rate, you would think so. There is a lot of green in the direct selling industry - $102 billion!
Amway went through an ill-fated name change earlier in the decade. They walked away from both the equity and the baggage that existed with Amway. Many Independent Business Owners have gotten rich and are living the good life because of the opportunities afforded by Amway. Today, there are three million Amway business owners. Many make money off other members - that's the beauty of multi-level marketing. The levels of distribution selling steps run deep - ten, fifty and or hundred step distribution. Like any savvy marketer, Amway tiers its distributors. You can be at a diamond, platinum or emerald level.
Today, Amway plays the brand game really well. Given the negative halo of Amway's past, present and potential future, they've become a strong proponent of a branded house strategy. Behind Nutrilite, Amway is the world's leading brand of vitamins, minerals and dietary supplements with sales that exceed $3 billion. Artistry, their skin care/cosmetics brand, brings in over $1 billion.
The Donald himself, Donald Trump, has taken notice of the direct selling segment. Recently, he started the Trump Network that came out of Ideal Health - a 12-year old Massachusetts based nutritional product company. Amway has some serious competition. That is one reason you see Amway paying $40 million for the naming rights to the new Amway Center in Orlando. That's what you expect from close to
$8 billion brand enterprises.
Is everything rosy with Amway? That is hardly the case. Not all distributors prosper. Many drop out. The investment is significant, including $497.00 in "marketing packages." The highest tier levels live off the efforts of the newbies! It is eat or be eaten. Eric Scheibeler has written the definitive look inside Amway - Merchants of Deception. He should know; he was decorated and honored at the Founder's Emerald Level.
Is multiple-level marketing level right for everyone? Just like any business, it works for some and not others. The elements of risk are readily apparent on the Trump Network site - "Trump Network does not guarantee you'll earn an income." The best Amway Independent Business Owners go far beyond their circle of friends. They market their products through feature and benefit selling. They build on relationships rather than take advantage of them.
It is interesting to recognize that Amway is an abbreviation of the words 'American way'. The road to success in this country has been paved time and time again by working day in and day out. Selling is hard, in whatever category you find yourself. Whether it is Avon, Mary Kay, Amway, or any business. There are no shortcuts to success. Passion, diligence and hard work - that truly is the American way.
Whether it's Amway, Don Lapre, Robert Kiyosaki, or those buy real estate without money systems, they all have minimal success rates. If you see infomercials for some of these folks, they will show testimonials of "successful people" and the fine print on your TV screen will say "unique experience".
Basically, none of these systems work effectively. In each instance, there will be some exceptional people who succeed, but they are few and far between.
However, in my opinion, what makes Amway the worst deal is that Amway has defacto product quotas and their system never ends. At least with the other systems, they are limited to a few books or tools rather than a never ending supply of more and more cds, seminars and monthly fees.
Amway is a scam, and here's why: Amway pays out as little money as they can get away with, so they support the higher level IBOs ripping off their downline via the tool scam. As a result, about 99% of IBOs operate at a net loss, while the top 1% make several TIMES more from their Amway tool scam than from the Amway products. Read about it on my blog, I suggest you start here: http://tiny.cc/D5oJh and forward the information to everyone you know, so they don't get scammed.
Interesting article Bill. One comment - it's not true that "The levels of distribution selling steps run deep - ten, fifty and or hundred step distribution."
This is a common misconception of multilevel marketing. In reality the levels of distribution are very similar to traditional distribution. In it's investigation in the 70s, the FTC found the majority of Amway "distribution chains" were 4 levels or less. What's forgotten or missed is that in Amway when a group reaches the maximum level on the volume rebate scale the "MLM" component of the compensation plan stops, the group "breaks away" from it's "founder" and they are compensated through other payment structures.
Great article Bill! I found this article very interesting because I was, for a very short period of time, an IBO with Amway. It is very easy to get excited about Amway, but I must say that my overall experience was dissapointing and frustrating and once you start learning about ALL the fine print, reality starts to set in. The first people you try to get involved with your IBO business are your family members and close friends, and in my eyes, that spells trouble. I saw it as a catalyst to turmoil that would not be worth any amount of money I could potentially make. Like you said, Bill, there are no shortcuts to success and selling is not easy, period; however, any business that can be categorized as successful AND as a scam will always make me wonder...
As always Bill, your insight is lasered into a key message. Direct selling requires an understanding that sales success demands a set of skills that focuses on activity, communication, relationship development and hard work. Amway, like many other direct selling companies, try to make it look easy but the reality is unles you have sales athleticism you are likely to be disappointed. Anyone who has been successful in sales knows it takes an intense commitment to detail, preparation, effort and perseverance, not to mention a high tolerance to rejection - not for the faint of heart. The best direct sellers know how to help the buyer buy. Lastly, you have to love what you sell so unless you have a passion for the products/ services you are promoting it is unlikely you can help others get excited about what you are selling. Multilevel marketing not withstanding, sales is sales and if you are good at it you will be successful and in demand. If you are not than you are out of your league.