Are MLM such as Amway, Herbalife and Organo Gold Scams?
An honest opinion about Amway
You've probably heard of Amway, Herbalife, Organo Gold
and many other Multi-Level Marketing (MLM) opportunities. The question is, are these
business opportunities legit? Or are they simply scams looking to take
advantage of innocent people?
Personally, I'm not a big fan of multilevel marketing
businesses, since only a small percentage of people who ever join a MLM make
good money. Statistics show that most people who join these business
opportunities do not earn enough money to justify their investment.
Why is it that only a small percentage of people who join
MLM businesses experience great success? Why do most people who join MLM
businesses ultimately fail and finally give up? The truth is that most MLM
business opportunities are based on pyramid schemes or Ponzi schemes.
A pyramid scheme or Ponzi scheme is an unethical business
where people at the top make the most money, and the people at the bottom usually
lose all of their investment or they do not do earn enough to justify their
investment.
Most of the gains obtained by a pyramid scheme comes from
investors, not from sales. Then they use that money to pay previous investors.
Most of the profits generated by pyramid schemes do not come from sales of
products or services. In other words, they do not develop any product or
service of value.
And even if they do, only a small percentage of their
profits come from the sales of their own products or services. In most cases,
they develop overpriced products and only use them as a smokescreen to hide
their true intentions which are to deceive naïve people by duping them to
invest in the scheme. However, once the people stop joining, the pyramid scheme
collapses and the people who joined at the end lose everything.
For example, Wal-Mart is a company that earns most of its
profits from the sales of good quality products at affordable prices. Most of
us have bought at stores like Walmart and usually return due to good quality
products at reasonable prices. Apple Corporation is another good example.
People buy Apple’s products because of the exceptional world-class quality of its
products such as the Apple iPhone and Apple iPad.
But most MLM companies such as Telexfree do not offer any
good quality products at reasonable prices. And those MLM companies that do
have good quality products typically charge much more for a similar product
that you can buy at a store like Walmart.
Some MLM businesses don’t even sell any products or
services of good quality. This is very risky for anyone who invests because the
MLM does not make any money from selling some product of good value at a good
price. This means that the MLM will earn most of its profits not by selling
something valuable, but from the money that investors pay to join the scheme.
But what happens when people stop joining the MLM business?
The scheme crumbles and the unfortunate people who joined
at the end lose all of their investment. This is why most people who join a MLM
are not successful, because most MLM businesses are based on a pyramid scheme. However,
not all MLM businesses are scams. However, a large percentage of MLM business
opportunities are scams. Many MLM business owners complain of the bad
reputation their industry has.
However, they really shouldn’t blame the public for the
bad reputation. The bad reputation of the MLM industry is solely the blame of
its own MLM salesmen who use unethical and dishonest business practices. Let's
review some of the most popular Multi-Level businesses in the world.
Amway
Amway is one of the most popular MLM companies in the
world. Is Amway a scam? Amway is very popular worldwide. One good thing about
Amway is that it has very good products. However, most of their products are
expensive when compared to similar products of comparable quality from stores
like Wal-Mart and Target.
Since 2016, the cost to join Amway in the United States
and become an independent entrepreneur varies from around $100 to $250 per
person, depending on which package you choose. However, Amway has a history of
changing the cost or fee associated in joining its enterprise. As an
independent agent you also have to recruit people and have to consume a certain
amount of Amway products every month in order to not be disqualified from this
business. Is Amway a good opportunity for the whole world? No.
Can you make money with Amway? It depends. Only if you like to sell and you enjoy recruiting people. In other words, if you are sociable and you love to sell, you can earn good money with Amway. However, if you do not like to sell and you don’t like recruiting people, then it’s not for you. Is Amway a pyramid scheme? Yes it is. Although many people argue that it is not, the statistics show that most of the profits made in Amway go to the people at the top of the pyramid.
Can you make money with Amway? It depends. Only if you like to sell and you enjoy recruiting people. In other words, if you are sociable and you love to sell, you can earn good money with Amway. However, if you do not like to sell and you don’t like recruiting people, then it’s not for you. Is Amway a pyramid scheme? Yes it is. Although many people argue that it is not, the statistics show that most of the profits made in Amway go to the people at the top of the pyramid.
In addition, the people at the bottom of the pyramid
generally make very little money, or worse they don’t make any money and give
up. The truth is Amway is a pyramid scheme. Many of its leaders argue that it’s
a legitimate business, however it is still a pyramid scheme, because most of
the profits go to the people at the top of the pyramid. The bottom line is Amway
is only beneficial to people who like to sell and recruit.
If you like to sell and recruit, then you can probably make
money with Amway. But if you don’t like to sell and you hate recruiting people (or
don’t want to bother your family or friends), then don’t waste your time and
save yourself the $100 or $250 dollars for something you really need.
Amway is not for everyone. However, Amway has been
operating for a long time (about 55 years or less), and it seems that this MLM
company is here to stay. The only good thing Amway has going for it is that it
has good quality products. However, it’s still misleading because its products
are expensive which means you need to be a very good salesman to earn good
money with Amway. This is why most people who join Amway never succeed and lose
their investment.
80% never succeed with Amway
One of the things I do not like bout Amway is that its
recruitment practice is dishonest and unethical. Some Amway leaders say that anyone
can succeed with Amway. This is not true. Statistics indicate that only 20% of
people who join Amway succeed. The other 80% never succeed with Amway and do
not earn enough money to justify their investment.
But if you ask any Amway leader why 80% of those who join
Amway fail, they will tell you that it is not the fault of Amway. They will
tell you it is the fault of the people. That's not true. Honestly, not everyone
likes to sell and not everyone wants to be a salesman. Just like not everyone
wants to be a doctor and not everyone wants to become a football star. In life
people have different skill sets and interests. For example, I don’t like to
sell. This does not mean I'm a bad person.
It just means that I don’t like to sell. However, Amway’s
leaders blame the public for not become something many of them don’t like. Amway’s
leaders should be more honest when they recruit, and not tell people that
anyone can get rich with Amway, because this is not true. If you hate selling,
it is very likely that you will fall in the bracket of the 80% who fail. But,
of course, Amway benefits from the 80% who fail because they still have to pay
the $100 to $ 250 fee to join Amway.
Amway probably generates more profits from the $100 to $250
fees they earn from the 80% who fail, than from sales of their own products. If
you think I'm exaggerating, let's do some math. Amway is a global company. Say
Amway recruits 1 million people worldwide this year, multiply 1 million people
with $100 USD = and you get $100,000,000.00 million dollars in profits.
And that's a lot of money. Even if 80% of those 1,000,000
people fail to succeed with Amway, the company still makes a fortune. And who
do you think are you going to get all that money? The people at the top of the
pyramid, of course. The top members receive all that money.
That's why Amway’s leaders want everyone thinks it's easy
to make money with Amway. Because even though they know that only 20% of the
people who join will achieve success, they also know that for every $100 to $250
USD they get from each sucker in the world they will get rich. And as the
saying goes, every minute there's a sucker born.
The idea of getting rich quick and easy is what they
sell. The products and services that Amway sells are of good quality but are
very expensive. You can find many similar (and of the same quality) products
Amway sells at a much lower prices at your local Walmart or other business.
The bread and butter for Awmay is the sale of this false
dream to the masses. But in reality it is a delusion, because only 20% will
ever manage to be successful, those who truly love the sales and recruitment
industry. So my question is simple. Why don’t Amway recruiters simply ask
people in their conferences, “hey if you like to sell, join us and get rich.” “And
if you do not like to sell, well, it was nice to meet you, but I don’t want to
take your hard earned money.”
That really would be more honest and ethical. Thousands
of people will save $100 to $ 250 that can be used for more important uses that
all families need, such as rent or purchase. And in this global recession, many
families can’t even afford the luxury to throw $100 in the garbage.
Popular arguments of Amway's leaders
People who defend Amway tend to say that everything is a
pyramid and all the people in the world at one time or another have to sell
something. But I respectfully disagree with them. First of all, not everyone
has to sell for a living. I know many people who do not sell anything and earn
very good wages.
For example, I have a friend who is a truck driver and he
earns a high salary and all he does is transport goods from one state to
another. All he does is drive every day. He doesn’t have to sell anything. I
have another friend who is an accountant. His daily tasks, include managing
billing and revenue of the company for which he works. He never sells anything.
I have another friend who is a biologist. He works in a
laboratory doing research and helps find cures for diseases. He doesn’t have to
sell anything. I have another friend who is a school professor. She doesn’t
have pressure people to buy products. She educates children and earns a good
salary. I have another friend who works in information technology and he designs
software every day. Selling is not part of his job.
These are just some examples. There are millions of
people worldwide who work hard and honestly every day doing work they love to
do and many of them don’t sell anything. So if someone tells you that everyone
has to "sell" this is not true. I know many people who hate selling
and still make good money doing work they enjoy.
Every business is a pyramid?
Another popular argument of those who defend Amway is
that every business is a pyramid. They say, well, every company is a pyramid
because people at the top always make more money than people at the bottom.
However, I don’t agree with this analogy. Let’s take for example the Facebook
Corporation.
One of the owners of Facebook, Mark Zuckerburg, is a
billionaire. Sure, he makes a lot more money than the people at the lower age
bracket of the Facebook Corporation. However, almost everyone who works for
Facebook earns a very high salary. Most Facebook employees earn between $80,000
Facebook to $125,000 a year, if not more. This is nothing to laugh at.
Even the janitor who works at Facebook and cleans the
bathrooms probably earns at least $15 per hour, if not more. Sure, Facebook may
have a pyramidal structure, but even the people at the "bottom" make
an average of $80,000 or more a year. With this high salary, even the people at
the “bottom” can buy a house and give their family a good life.
And I'm just using the example of Facebook. You can say
the same for almost all the big companies like Google, Toyota, Pepsi,
Volkswagen, Microsoft, Exxon, Prudential, Ford, Amazon, Oracle, Pfizer, etc. Nearly
everyone who works for these companies earns a very good salary. Surely the CEO
of Volkswagen makes millions but even the engineer who designs the cars earns a
good salary.
Now compare this to Amway and other MLM businesses. With
Amway, only 20% of people who join earn good money. The other 80% (people at
the bottom) either don’t make enough money to justify their investment or they
lose all of their investment. Only 20% of people who join Amway can really
afford to buy a house and support their families with their income from Amway.
The other 80% who fail with Amway earn very little money
or they lose all of their investment. These people can’t even support their
families if they were to depend on their incomes from Amway! In fact, many
people would fall into poverty if they depended solely on their incomes from
Amway. This is why many Amway members have other jobs on the side because they
can’t even survive with their Amway income.
Eventually, most of these insolvent Amway members
eventually get tired of not making any money and give up. That is the big
difference between the traditional Corporations and the controversial MLM
businesses. Even the worker who cleans the bathroom at Toyota makes enough
money to live a decent life.
Of course, the business world has a pyramidal structure,
but the difference is that most people who work for corporations in the world
earn a high salary. Most of these people can actually live a decent life with
their high salaries. You can’t say the same for Amway and other MLM businesses.
These are the actual pyramids, as only the people at the top make good money,
while the others go to ruin. So anyone who says that Amway is no different than
the traditional corporations is pulling your leg.
This is false. Ask any professional who works as an
employee for a corporation how much money they make per hour. Now ask people
who have never made a dime with Amway, “How does it feel to have lost $100 to
$250 that you'll never see again?
I know many people who have joined Amway and lost all of their
investment without winning a single penny. I know a person who invested $250 in
Amway and never made a dime. I also know people (professional) who earn $100,000
or more a year working as an employee for a corporation. In fact, the most
successful people I know are those who are professionals and who work for the
government, work for a corporation or who owns a business that is not MLM
related.
I only know of very few people who have really earned
good money with Amway or any other MLM and they all have something in common:
they are very sociable and they all love to sell. Most of them have a past in the
sales industry such as a car salesman, etc. As I said before, if you love selling,
then you can succeed with Amway. But if you hate selling and recruiting people,
then don’t waste your time or you’re hard earned money. Instead, look for a career that you are
passionate about and that you will enjoy.
What about Herbalife and Organo Gold?
They are very similar to Amway. Herbalife products
focuses more on health care products, while Organo Gold is more focused on
coffee products. Don’t misunderstand me, these two companies produce good quality
products. Amway also makes good quality products. Many consumers approve of
their products.
However, they all have one thing in common: they are
based on pyramidal structures and only a minority of the people who join (about
20% or so) will achieve any success. Having good products does not mean
everyone will make money. If you go to Walmart you will see many people buying
products at reasonable prices.
Walmart does not have to recruit people and pressure them
to pay $100 to $250 USD so they can buy from. Walmart products sell themselves
because the prices are low and the quality is good, something that most MLM
businesses do not have. Walmart is a profitable business because they sell a
lot of products at reasonable prices. People buy them because they have good
quality products at low prices, unlike most MLM.
So I recommend you stay away from MLM types of companies,
unless of course you love selling and you don’t mind recruiting members of your
own family. However, if you hate selling, and you hate recruiting people, then
don’t waste your money and your time. It is not for everyone.
It's like if I say, hey come and join my football academy
and I will turn you into a football star. Anyone can become a football star.
Now pay me $150. Yes, anyone can play for the New York Jets. bla bla bla. This
is how Amway recruits many people. They make them believe that getting rich
with an MLM is easy.
They make people believe that anyone can make easy money.
But selling and recruiting is not easy. If it was really easy, everyone would
be a rich salesman, and statistics show that only about 20% of MLM sales people
succeed. If you don’t like selling, it is very likely that you will lose your
$100 to $250 USD, but of course Amway won’t complain right? That is how they
make a big chunk of their profits.
By the way, do you like playing football?
Conclusion
Most MLM companies are pyramid schemes, Ponzi schemes or
scams. Unfortunately, thousands of people worldwide have lost money to MLM
businesses. Only a minority of people who have joined have actually made any
real money. For this reason, I advise you to think carefully before you join
any MLM business.
The odds are that you will most likely not succeed and
you will most likely lose your investment. Unless you love selling and
recruiting, most likely you will be giving away your hard earned money to help
Amway’s leader’s get even richer. If you go to an MLM conference, do not
believe everything they say.
Most MLM’s have experienced salesman who are skilled at
talking the talk. Be very careful. As I said before, unless you like to sell,
stay away. Now if you love to sell and recruit, then go for it. I know a few people
who earn good money with these MLM companies, but 9 out of 10 of these people
are people who love to sell and recruit.
In conclusion, if you are one of those who loves to sell,
recruit and socialize with strangers, then I'm sure you will make good money, even
though you will be operating in a mostly unethical business. But hey, everyone
is free to make their own decisions. Personally, I would prefer to earn a
living doing something that benefits society and makes the world a better
place.
MLM businesses do not make the world a better place and
it actually only benefits a minority of people, while they harm the majority.
However, the choice is ultimately yours. If you are more like me and you don’t
really like to sell or recruit, then the choice is easy. In that case just focus
on getting a job in a field you enjoy or start a business you are passionate
about and save your $100 to $250 for something you really need, like food or
rent payments.
Best regards,
Justice Jeremiah
May 10, 2016
Watch this YouTube video that explains the controversy
behind Herbalife:
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