Amway, short for American Way, is a multi-level marketing (MLM) company sparking a bit of controversy over their sales approach. The American-based company sells a variety of products in the health, beauty, and home care markets. Founded by Jay Van Andel and Richard DeVos in 1959, the company (and associate companies under the Alticor name) has reportedly netted 11.3 billion dollars in sales as of 2013. The company has seen seven consecutive years of growth and is ranked 114th amongst large global retailers. In 2012, Forbes reported Amway as 25th amongst the largest private companies located in the United States.
Success Doesn’t Come Free
The long time company has seen ever-growing success, but it hasn’t come for free. While thousands of entrepreneurs currently enrolled in Amway’s MLM program swear by it, critics have labeled the program a pyramid scheme and fraud—claims Amway passionately disputes.In a recent news article by Max Ehrenfreund of The Washington Post, it’s reported that controversy surrounding Amway’s sales approach has one again sparked scrutiny.
The story covers the plight of Enrique Martinez. Although he reportedly dislikes chocolate, he was eating up to 10 pieces a day, drinking chocolate flavored protein shakes, and using a chocolate-based facial cream. He wasn’t buying just any chocolate either; it was expensive chocolate that he and his wife were spending about $2k a month on! Over the past five years, they accumulated over $100k worth of debt. Where did the chocolate come from? It came from a company called MXI Corp—a business leveraging a multi-level marketing business model.
Critics immediately accused MLM marketers of using “slick pitches” and otherwise unscrupulous sales tactics to trick consumers, like Martinez, into pyramid schemes and even fraudulent situations. Defenders of MLMs claim the business model makes sense and is legitimate. Yet, here we are staring down the barrel at a news story that taints MLM business models and labels another MLM as using “Amway-style sales.”
Why Multi-Level Marketing Business Models Work
Just why do multi-level marketing programs, like Amway, work? The answer is simple. Who makes the best sales or spokes people? Usually, passionate people who have seen real life results from a product. They’ve seen both the benefits and the results firsthand, which makes them perfect for marketing—especially if they learn a bit about Internet marketing. Amway, and companies like them, recognize this fact and choose to open the sales ranks to individuals who are willing to sell their products and recruit other sellers.
As a potential or established small business owner, you know that building a business from the ground up is hard. Breaking free from the 9 to 5 grind doesn’t happen overnight. Unless you’ve inherited a nice million or come into a trust, you don’t have the financial backing to quit your day job and dive head first into successfully building, marketing, and selling your own business. What’s the solution? One is multi-level marketing.
MLMs don’t require a great deal of time or effort to start earning supplemental income. In fact, once you’ve laid the groundwork, successful MLM program take little time out of your daily schedule. You can run them while working your usual 9 to 5, and if you put effort into them, you can expand until you’re able to walk away from the confines of your day job.
Most MLMs Aren’t Scams
It’s ignorant to say that every MLM out there is legitimate. The fact is somebody always has to take a good thing and twist it into something bad. Self-labeled MLM programs that aren’t legitimate, steal your investment, and leave you with nothing do exist. But in most cases, the effectiveness of a MLM depends on you—just as commitment to a product depends on the consumer. Not to knock the plight of Enrique Martinez, but if you hate chocolate, why would you spend $2k a month it? Common sense says you wouldn’t. You’d find something else that better suites your needs.
MLMs like Amway are legitimate ways of earning financial independence. You can control their effectiveness by researching them prior to buying. Choose the program that best fits your passion, marketing style, and budget.
Education is key to growth and success. Expand your knowledge base by learning about the staples, like affiliate marketing, email marketing, social media marketing, and network marketing.As a results, legitimate MLMS—like Amway—can help fund your independent financial future.
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