Jonah Patel
Amway is an American multi-level marketing company that combines direct selling with a multi-level marketing strategy. Distributors, known as Independent Business Owners (IBOs), can market products directly to customers and can also sponsor and mentor other people to become IBOs. IBOs can earn money in three ways: through the retail markup on products sold, monthly bonuses based on the quantity and value of products sold, and a second monthly bonus based on the sales volume of the products sold by their sponsored IBOs. There is no registration fee for new IBOs, and Amway offers a low-cost opportunity to earn extra income. However, critics have noted that a significant percentage of IBOs make little to no money, and the company has faced investigations and lawsuits related to alleged pyramid scheme practices.
| Characteristics | Values |
|---|---|
| Number of Independent Business Owners (IBOs) | 290,000 in the U.S. and 1 million+ worldwide |
| IBO earnings in 2023 | 32% of U.S. Registered IBOs had no reported sales |
| 66% of U.S. Registered IBOs received a payment from Amway in at least one month for sales that occurred during 2023 | |
| Average annual earnings for IBOs at the Founders Platinum level and below | $841 before expenses |
| Average monthly earnings for IBOs | $65 a month |
| Number of products | 350+ |
| Number of countries and territories Amway operates in | 100+ |
| Number of online courses offered by Amway Education | 150+ |
| Number of languages Amway Education courses are offered in | 5 |
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What You'll Learn
Amway's multi-level marketing strategy
Amway combines direct selling with a multi-level marketing strategy. Amway distributors, referred to as "independent business owners" (IBOs), may market products directly to potential customers and may also sponsor and mentor other people to become IBOs. Amway IBOs can earn money in three ways:
- Retail markup on product sales to customers: IBOs can sell Amway products at a markup, which is the difference between the cost and retail price. While Amway establishes a suggested retail price for every product, IBOs can set their own retail prices. The difference between Amway's base price and the retail markup is profit.
- Sales commissions (sometimes called bonuses or incentives): IBOs can earn monthly bonuses based on their personal sales volume (how many products and what types of products they sell).
- Growth incentives for building a team of other IBOs: As their business grows and they sponsor new team members, IBOs receive monthly bonuses based on the product sales volume of their team. IBOs earn growth incentives for reaching key business-building milestones, such as one-time cash awards and business trips.
Amway is the largest multi-level marketing company in the world by revenue and has been named the number one direct selling company in the world. The company was founded in 1959 and operates in more than 100 countries and territories. Amway offers nearly 400 health and wellbeing products, including nutritional supplements, beauty products, and home goods.
While Amway offers a low-cost opportunity to become an entrepreneur, it is important to note that the company has faced legal issues and investigations in various countries for alleged pyramid scheme practices. In 1979, the Federal Trade Commission found Amway guilty of price-fixing and making exaggerated income claims, ordering the company to stop these practices and provide accurate information about distributor profits, earnings, or sales. More recently, in 2013, Amway India's CEO and two other directors were arrested on charges of running a pyramid scheme, although they were granted bail the next day and the business was unaffected.
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Earning money through product sales
Amway is a direct selling company that combines direct selling with a multi-level marketing strategy. Distributors, known as Independent Business Owners (IBOs), can market products directly to potential customers and may sponsor and mentor other people to become IBOs.
There are three main ways to earn money through product sales with Amway:
- Retail markup on product sales to customers: IBOs can sell Amway products at a markup to earn a profit. The difference between Amway's base price and the retail markup is profit. IBOs can set their own prices when selling to customers, although Amway does establish a suggested retail price for every product.
- Monthly bonuses: IBOs can earn monthly bonuses based on their personal sales volume. The higher the sales volume, the more money can be earned. Bonuses are based on the quantity and value of the products sold by the IBO each month.
- Sales commissions (sometimes called bonuses or incentives): IBOs can earn money when others they have sponsored into the business also sell products to customers. This is based on the sales volume of the products sold by their team. As their business grows and they sponsor new team members, IBOs can receive additional monthly bonuses.
IBOs can sell Amway products in person or online, whichever they feel most comfortable with. Amway offers a wide range of high-quality health and wellness products, including nutritional supplements, beauty products, and home care products.
It is important to note that Amway has faced criticism and legal issues related to its business practices, including investigations by the US Federal Trade Commission (FTC) for alleged pyramid scheme practices. According to the FTC, more than half of Amway distributors do not make any money, and the company has been found "guilty of price-fixing and making exaggerated income claims". As with any sales opportunity, the amount of money IBOs earn varies depending on various factors, including their customer base, business experience, skills, and dedication.
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Monthly bonuses and incentives
Amway Independent Business Owners (IBOs) can earn money in several ways, including monthly bonuses and incentives. Monthly bonuses are based on the quantity and value of the products sold by the IBO each month. The higher the sales volume, the more money can be earned.
IBOs can sell Amway products at a markup, earning a profit from the difference between the base price and the retail markup. While Amway establishes a suggested retail price for every product, IBOs can set their own retail prices.
In addition to monthly bonuses, IBOs can also earn sales commissions, sometimes called bonuses or incentives, based on their personal sales volume and the sales volume of their team. As their business grows and they sponsor new team members, IBOs can receive additional monthly bonuses based on the product sales volume of their team.
IBOs can also earn growth incentives, which are discretionary incentives based on reaching various sales milestones. These incentives may include one-time cash awards, business trips, or other rewards.
The Amway IBO Compensation Plan recognizes IBOs who achieve certain monthly or annual levels. For example, IBOs at the Silver level have had at least one month in a performance year where their personal and downline volume qualify them to receive a 25% performance bonus on their personal volume.
It's important to note that the amount of money IBOs earn can vary depending on various factors, including their customer base, business experience, skills, effort, dedication, and the quality and size of their sales team.
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Sponsoring and mentoring others
IBOs have access to plenty of training, education, and support to help them get started and learn how to sponsor and mentor others effectively. Amway Education offers over 150 online courses in five languages, as well as presentations, podcasts, and activities featuring product information, selling strategies, and business tips. IBOs also receive guidance and coaching from their sponsors and other experienced IBOs, who can help them set business goals, develop sales skills, and manage a sustainable Amway business.
To be successful in sponsoring and mentoring others, it's important to focus on building long-term relationships and increasing the value of each new member. This can be achieved through renewals and upsells, rather than solely focusing on acquiring new members. By helping their team members succeed and grow their own businesses, IBOs can increase their own earnings and create a sustainable source of income.
While sponsoring and mentoring others can be a great way to grow an Amway business, it's important to note that simply recruiting new members is not enough. IBOs must also focus on their own sales and business development to maximize their earnings and create a thriving Amway business.
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Amway's customer satisfaction guarantee
Amway is a multi-level marketing company that combines direct selling with a multi-level marketing strategy. Amway distributors, known as "independent business owners" (IBOs), can market and sell products directly to customers and can also sponsor and mentor others to become IBOs.
Amway offers a customer satisfaction guarantee, which includes the following:
Product Quality Assurance
Amway's exclusive products undergo rigorous quality control programs and exhaustive testing for quality and performance. This ensures that customers can confidently stand behind the products they purchase.
Return and Refund Policy
Amway offers a satisfaction guarantee that allows customers to return products if they are not completely satisfied. The timeframe for returns varies, with most products offering a 180-day window, while specific limited-guarantee products like Atmosphere™, iCook™, and eSpring™ must be returned within 120 days. Some items, such as consumable food and beverage items, are non-returnable unless defective upon receipt.
Easy Return Process
To initiate a return, customers must complete a SA112 Returned Merchandise Authorisation Form, providing information such as the reason for the return, product details, and customer details. Amway covers the shipping costs for returning any unused and unsold products, ensuring a hassle-free experience for customers.
Refund Options
Amway offers flexible refund options, including a full refund of the product price and applicable taxes. Customers can choose to receive their refund in the form of an Amway Credit Voucher or a bank transfer. The Credit Voucher can be used as a payment option during the customer's next purchase, providing added convenience and value.
Business Opportunity Support
Amway prioritizes its IBOs, offering a range of support options to help them succeed in their businesses. From educational resources and business tools to mentorship opportunities, Amway is committed to supporting its IBOs every step of the way.
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Frequently asked questions
Amway is a direct selling company. Amway Independent Business Owners (IBOs) sell Amway products directly to customers.
IBOs make money in three ways: selling products at a markup, earning monthly bonuses based on the quantity and value of products sold, and earning a second monthly bonus based on the sales of other IBOs they have sponsored.
There is no registration fee for new IBOs and no inventory requirements. After the first year, there is a small annual renewal fee of $76.
The average earnings for all US IBOs at the Founders Platinum level and below are $841 before expenses. However, 32% of US IBOs had no reported sales in 2023, and the Federal Trade Commission requires Amway to state that 54% of recruits make nothing and the rest earn on average $65 a month.
