Have you ever had an invite from a friend, associate, or a stranger
that left you in the lurch wondering just what the invite was all about?
Maybe, just out of the blue, an old acquaintance that you have not seen
since high school calls you up and invites you to see something that is
so important that you absolutely must do it! Your old friend is very
vague about just what this "something" is. Even if you become suspicious
and ask if it is "Amway? (Herbalife? Xango? Monavie? Nuskin? Mary Kay)"
Your friend might respond and say something like this: "I can't really
talk about it over the phone; you will just have to see this for
yourself." Your curiosity has been piqued. You most likely have just
been exposed to the "curiosity invite", one of the devilish recruitment
tactics of a multi-level business opportunity schemes.
Amway
is the most well known, although there are other 'clones' that operate
basically using Amway's pyramid recruitment practices.
Amway claims to be the number #1 on line retailer of health and beauty
products in the US, although most of their sales are to their own
distributors. These distributors are basically the only real customers
for the products which are intentionally priced to be unsellable outside
of the distributor chain.
Amway's reputation in the
United States has been tarnished by a series of scandals,
whistle-blowers, Dateline scrutiny, and bad word of mouth. Amway has run
advertising and commercials to help revive their negative image.
Amway distributors are called are called either 'Amway Business Owners'
(ABOs) or "Independent Business Owners (IBOs). for convenience. These
'distributors' are part of a 'pyramid'system that includes an "up-line"
and a "down-line." These 'distributors' receive a distributor discount
on the products they buy whether they are sold at retail or consumed at
home. The idea is that any product that they retail at full price
provides them with profit margin.. Buy at a discount and sell for full
retail price is a universally accepted method of making money in any
business, but realizing a profit in this business (or many of the other
MLM clones) can be very difficult to achieve.
The
remainder of this blog post will describe the secrets of Amway.'
A very small number of Amway distributors are known collectively by US
courts as 'kingpins. These kingpins run a 'shadow' business monopoly
business selling motivational training materials to include seminar and
rally tickets which is known as the "tool and function" business. The
name 'kingpin' is also used to describe key high level 'capo' in the
mafia. Law Professor
G. Robert Blakey, best known for his work drafting the
Racketeer Influenced and Corrupt Organizations Act, produced a
report presented into evidence in
Procter & Gamble Company, et al. v. Amway Corporation, et al which had been ordered 'sealed' but which was subsequently 'leaked.' Robert Blakey's report said:
"It is my opinion that the Amway business is
run in a manner that is parallel to that of major organized crime groups, in particular
the Mafia. The structure and function of major organized crime groups, generally
consisting of associated enterprises engaging in patterns of legal and illegal activity,
was the prototype forming the basis for federal and state racketeering legislation that I
have been involved in drafting. The same structure and function, with associated
enterprises engaging in patterns of legal and illegal activity, is found in the Amway
business."
Amway kingpins are
introduced to new Amway recruits with exalted titles like "Ambassador."
These names are called 'pin' levels that provide aspiring Amway
believers are taught to aspire to become and emulate. The majority of
'kingpins' were early adopters in the Amway pyramid system and reside
near the top of the organization. Their wealth and monetary success are
paraded in front of the distributors as proof that one can become
wealthy if the Amway 'system' is followed. The kingpins supposedly sell
the 'secrets' of success to their 'down-line'
Trappings of wealth serves as the "bait" for starry eyed 'newbie'
distributors who have been told that they can also rise to the top of
the Amway pyramid. Visions of money, palatial estates, and luxury
automobiles inspire the flock to 'slave' under Amway's totalitarian
system.
New distributors are taught that success in Quixtar comes from profits
generated in selling and recruiting a never ending chain of new
distributors who will share some of their profits with their 'upline.'
The dirty secret of the Amway is that the sale of product does not provide the spectacular
wealth of those at the top of the pyramid, but it is the sale of the
secrets of success: the Amway tools.
Distributors
in the Amway business soon realize that the sale of Amway products is
difficult and realize that recruitment is the road to the promised
treasure. Therefore, they spend most of their time trying to recruit
new distributors into their business where an 'annoying' invite to
prospects is made and where the plan is 'sprung' on the prospects.
Believers are strongly urged on by the training materials and their
up-line superiors.
Amway distributors strive to build a
down-line business and new recruits are encouraged to buy the tools and
attend every 'function' as the 'key' to become the next Amway success
story. The 'tool kingpins' smile all the way to the bank with their tool
profits.
In times past, distributors were told that
the tools were sold at or near cost and that success in the business
came from Amway--not from tool sales. The 2004 Dateline expose on
Quixtar (Amway) corruption exposed the dirty little secret of the Amway
cult. Although Amway/Quixtar has denied these allegations ever since,
the truth has been an open secret. Not all distributors are fooled by
the Amway propaganda machine and have fostered some many a disgruntled,
angry distributor which lead to a revolt.
The tool
kingpins operate a bait and switch operation; their tool sales benefit
by high distributor turn over that the high cost of following the Amway
'system' requires. New distributors represent a cash cow to the
kingpins, as the older distributors require less training. The hopeful
new distributors come into the business and are driven like cattle
through the "money making machine." Very quickly these treasure inspired
believers begin shelling out their own treasure and find themselves in a
catch 22. Like "Simple Simons" they buy the Secrets, attend seminars
and rallies and absorb all the 'over-head.' Eventually, expenditures,
unfulfilled expectations, and disillusionment bring their Amway dream to
an end. As proof of this, many of these Amway business failures put
their accumulated books, cds, videos, materials and unsold inventory up
for sale on web auction sites like Ebay at incredible discount . Many
times these tools receive no bids, go unsold and remain relatively
worthless!
The up-line distributor, in anguish, must
now recruit more down-line to replace those that quit. Remember, his
goal is to retain new distributors who will help him become profitable
by buying products. An distributor constantly must struggle, expend more
time and money in search of replacements. He becomes like a man trying
to run up a down escalator: two steps up and one step down; one step up
and two steps down! His continued efforts hardly benefits him at all
while at the same time it produces a steady stream of new distributors
that will for a while buy tools from the kingpins.
There are three distinct groups of people in the Amway/Quixtar business,
the company owners, the tool kingpins, and the body of every day
distributors. The first two groups benefit and prosper from the business
while the last group of distributors do all the recruiting, buy the
products, and also buy all the tools.
People struggling
to succeed in Amway have little time to spend with their family and
suffer social stigma. Family and friends become 'disconnected'. Married
distributors are forced to place children in the care of relatives or
babysitters. Marital discourse may arise. Uplines constantly make
demands to buy product, tools and to 'show the plan.' Success in Amway
usually ends up not it fulfilled dreams, but in broken ones. They have
been taught that failure is caused by not working hard enough and for
not following the system. It is system that many times the cause of
their failure. 99% of those joining Amway never show a profit.