Is amway pyramid scheme?

No. Amway is a Direct Selling FMCG company that provides word-class products that come with high quality, cost-effective and Eco-friendly. It works under the franchising concept called private franchising. The existing Amway Business Owner will help another new distributor who is interested in business. The person who introduces Amway Business to others will be responsible for transferring the knowledge about the business and products and how to use them.

Is Amway a pyramid scheme? will be the first question that will arise to anyone who looks at the Amway business model for the first time. There is no mistake in anyone thinking in that angle. However, it is our responsibility to gather the information and understand Amway Business Model.

What is the Meaning of Pyramid Scheme?

First, we must understand the meaning for Pyramid Scheme. It is clearly explained in Wikipedia that

"A pyramid scheme is an unsustainable and often illegal business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public."

As per the above definition, Amway does not fall into the pyramid bucket. Amway offers products and services that are worth the money paid. Few other aspects are:

1. Amway is free to join or with low investment in maximum countries.
2. The distributors are not compensated for recruiting other business owners.
3. The incentive purely based on the team's turnover.

One of the important point to be kept in mind is that in a pyramid system, the distributors in the downline can not make more than the distributor in the upline. 

Hope the ideas presented above has provided some information. You can watch the official video by Amway that  clearly explains Amway is not a pyramid scheme.

In the 1970s, the Federal Trade Commission in the USA looked at Amway and tried to resolve the question of whether Amway was a genuine business or a Ponzi system.

Although Amway made false and misleading profit projections when recruiting new distributors the sales plan of the corporation was not an illegal pyramid scheme, the Commission stated that (another name for a Ponzi scheme).

"Amway differed in various ways from the pyramid schemes challenged by the Commission. It did not charge new recruits for a "headhunt" or hefty investment fee and favoured "inventory loading" by demanding high volumes of merchandise that couldn't be returned, "Debra A Valentine, the FTC General Counsel said at a seminar organised by the IMF in May 1998.

So that's another favor, that Amway is not a Ponzi scam.

But here we have one thing to understand. As in the case of a Ponzi-based MLM scheme, Amway's operation is dependent on seeking new distributors and subsequently on these new distributors being able to market Amway items and appoint new distributors at the same time. If a dealer succeeds in this, he makes more and more money. The problem is that it gets harder to appoint new distributors. Let's try to grasp this by an example. Let's imagine that the first distributor to be appointed by a real MLM organization nominates five distributors.

No Amway is not a Pyramid Scheme

No, Amway isn't a pyramid. The lack of understanding and misunderstanding, especially in social media, could mislead direct or multi-level marketing companies, such as Amway, from this term.

Amway is a legally owned direct selling company that has been operating in more than 100 countries and territories for 60 years. In its 1979 ruling today, Amway was recognized as a legitimate direct selling company by the U.S. Federal Trade Commission whose distributors offer quality items to consumers and where there is no revenue unless products are sold. This decision is utilized by countries around the world when regulations for the direct sales business have been established.

Amway is distinguished from a pyramid by several factors:

• It's a low risk, low-cost start-up business
• There is no money to recruit alone
• There is no minimum order for the product
• An individual can earn more than the recruiting person
• Amway offers a 100% money-back promise on the registration fee and a 100% satisfaction guarantee on most products
• Retail sales are necessary
• A written contract exists between Amway and a company owner that establishes the connection and provides for the rules of conduct. Visit AmwayGlobal.com for full details and search for "Satisfaction Guarantee."

Thus, it is not true that the people who started earlier in Amway or are "top" in the company make all the money.

Amway was established when its proprietors wanted to start a multilevel marketing organization (MLM Company). They quit Nutrilite and began Amway, which for American Way is short. The company started very instantly and became a worldwide phenomenon. However, the reputation of Amway swiftly started to tarnish in the United States as individuals began to associate It with Pyramid Schemes. The company was renamed Alticor to battle this image in 1999 and the sales divisions in North America were transformed into the Quixtar Brand and Access Business Group.

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