Is Amway a pyramid scheme?

A lack of understanding about Amway’s direct selling business model causes people to ask: Is it a pyramid scheme? Is it a scam? Is it a fraud?

Here are the facts about who Amway is, how it operates and how its Independent Business Owners (IBOs) make money.

Is Amway a pyramid scheme?

Amway is not a pyramid scheme. It is a direct selling organization where IBOs make money through the sale of products. Pyramid schemes, by contrast, have nothing to do with real commercial activity. They are a form of financial fraud that is based on recruiting new people to make investments that are then used to pay the people who joined earlier.

Amway doesn’t operate this way. Amway IBOs don’t make any money by bringing more people in – not a single cent. They make money when products are sold, not from recruiting. On each product sold, Amway sets aside a portion of the product cost as a “bonus.” This is shared by IBOs who work together in sales groups, according to their contracts with Amway.

In addition, the risk to IBOs and their customers is low: IBOs are not required to purchase products. Any products that are purchased are backed by a 100 percent satisfaction guarantee. And the $76 registration fee is fully refundable upon resignation in the first 90 days.

As a direct selling company, Amway provides its 3 million business owners around the world with the opportunity to supplement their income through product sales, to mentor others who share the same passion for Amway products, and to become part of a business that can balance work with family.

More than 20 million people in the U.S. were involved in direct selling in 2015 – one in six households. Retail sales were estimated at $36.12 billion – a nearly 5 percent increase over 2014[3]. The field has particularly enthusiastic involvement from women and minority groups: More than 77 percent of direct sellers in 2015 were women, and nearly 20 percent Latino[4].  Direct sellers describe work-life balance, networking opportunities and income potential as their chief motivations for staying in the industry.

What is Amway?

In 1959, Amway launched a direct selling business fueled by relationships. The vision was, and continues to be, simple: Work every day to help people live better lives.

The concept of partnership is a cornerstone of the Amway business, established by and between its two founders. It now encompasses the founding families, employees and business owners. Decisions are guided by what is in the long-term best interest of IBOs.

That vision is played out daily as the company helps people everywhere discover their potential and achieve their goals by offering great brands and opportunities. Amway is guided by six enduring values: partnership, integrity, personal worth, achievement, personal responsibility and free enterprise. Sharing generously with the local communities in which the company and its business owners operate is an important part of this.

Amway business owners span the globe, from the Americas to Europe, India and Africa to Greater China and the Asia-Pacific region. The company’s low-cost, low-risk business model sets IBOs up to reach their goals. It quickly and efficiently addresses the needs that may vary according to geography and culture. Details large and small, from navigating local selling regulations to product sizes and brand preferences, are coordinated in conjunction with local governments, business owners and consumers.

Sustainability is a core principle, as well, and has been for decades. Amway controls much of the process, from where ingredients are sourced (some come from nearly 6,000 acres of Amway-owned certified organic farmlands), to where they are manufactured. In addition, 50 percent of the energy powering Amway’s world headquarters in Ada, Michigan, is wind-generated. These are best practices in the industry and they have been a part of Amway’s DNA from day one.

How does Amway work?

There is no one-size-fits-all way to make a living, and never has been. The result is a need and corresponding demand among today’s workforce for diverse options. Direct selling organizations like Amway offer a low-cost, low-risk option for individuals to supplement their income. Amway Independent Business Owners use and sell high-quality nutrition, beauty and home products to consumers.

The more product sales they generate, the more income they can earn. Many also choose to build businesses by sharing the Amway opportunity with others and teaching them how to sell. This can mean greater reach for the product and ultimately higher income because of team sales volume.  In short, IBOs make money from the sale of our products – sales that they and the team they support generate.

Amway’s global sales in 2021 were $8.9 billion USD. Since 1959, Amway has paid out nearly $58.6 billion USD in bonuses and incentives to its business owners worldwide[1] – more than any other direct sales company in history[2].

To get started, IBOs in the United States pay a registration fee of $76. Under the company’s 100 percent money-back guarantee in North America and generous refund policy (within the first 90 days in business), it is very easy to leave the business if someone decides it is not for them.

Business owners receive education materials and free online training available 24/7 on mobile devices and in multiple languages. Education and training topics include product information, how to sell them, how to earn income, how to grow a business, and how to be a leader. In addition, Amway offers business tools, including a personalized, mobile-friendly website, apps and customer service support (from real people, in six languages). Compared to the cost of starting almost any other kind of business, the cost to become an Amway IBO is minimal and low-risk.

Like any company that wants to thrive, Amway fosters and rewards go-getters based on their own results and hard work. Here’s the breakdown of the three ways Amway IBOs make money:

1. As with any retail business, IBOs make money when they sell Amway products at a markup.
2. They earn bonuses from the company based on their personal product sales volume. As their business grows, they can earn additional bonuses from the company based on the product sales volume of their team.
3. Amway IBOs are awarded with growth incentives for key achievements in growing and helping their team succeed.

Millions of people have chosen to start their own Amway™ businesses, selling the company’s home, beauty and nutrition products as a way to earn extra money while defining their own success. For some, it could mean paying for tutoring or music lessons for their children or helping to cover monthly bills. For others, it could mean much more.

The work of a business owner is all about personal connections. Consumers have a strong desire to support small, independently owned businesses and they know direct sellers can provide a high level of knowledgeable, personal service. Through the Amway network, consumers can access exclusive, high-quality products, which IBOs can sell on their own terms. As these direct selling teams grow and sell more products, IBOs make more money.

It’s all about quality products

Amway’s original product, Liquid Organic Cleaner (L.O.C.™), was one of the first concentrated, biodegradable and environmentally sensitive cleaning products on the market. Since then, with a similarly pioneering and purposeful spirit, Amway has gone from selling simply home products to become a global leader in health and beauty, too. For decades, the company has focused on environmentally sensitive and biodegradable products.

Amway’s leading brands include Nutrilite™ vitamin and mineral dietary supplements and Artistry™ skin care and cosmetics. In addition, the company offers the eSpring™ water purifying system; Legacy of Clean™ environmentally-conscious home cleaning products, and Atmosphere™ home air treatment systems, among others. Amway business owners across the globe build their businesses on these brands.

As global leaders in phytonutrient research, skincare, water and air purification advancement, nearly 1,000 Amway scientists, engineers and technicians collaborate to create new products that support IBOs and the needs of their customers. The company’s global research projects influence not only Amway’s product development, but also contribute to the larger R&D community.

Real people, real stories

The people who join Amway do so for many different reasons, including working part time to make a little extra money to help support their families or to achieve a specific financial goal. They come from a variety of circumstances and have just as many motivations. While the specifics of the IBO stories may vary, hard work, determination and a devotion to giving back to the community are common themes.

The skeptic

When engineer Jeff Miller and his wife, Angela, first heard about the Amway business, they were skeptical. They both came from academic backgrounds based on critical thinking, so they carefully evaluated everything.

Jeff’s cousin made the first introduction, convincing him to sit down with a fellow IBO during a Colorado seminar. Over the course of the exchange, he felt challenged to open his mind and think differently.

“As an engineer, I was trained to be a skeptic and pick things apart,” Jeff said. “I dug in and realized I didn’t know anything about Amway, and the seeds were planted.”

The duo started slowly, first building their business at the smallest level. As their involvement and understanding grew, they began to embrace the business on a deeper level: helping other people.

“When we stopped simply going through the motions and began caring for people, lots of things started to change and grow.”

Now the husband and wife team continues to work together, taking the time to slow down and help others. The business enables them to live their lives with flexibility, spending more time with family and one another. The strengthening of their bond depends on a connection with others; building trust and helping others find a way to meet whatever goals they may have.

“It’s not about convincing people, it’s about educating people,” Jeff said. “If you educate people, they can convince themselves.”

Success on her own terms

For Amway Business Owner Vicky Gomez, living by example isn’t just a mantra – it’s a way of life. A determination to earn the rewards of hard work, mentorship and giving back to her community has taken her far in both the Amway business and in her personal life.

When a friend first presented the Amway business to Gomez, she admittedly wasn’t excited. “I was newly married, working three jobs and going to school,” she said. “I don’t do anything halfway, and so didn’t believe I had the time to devote to something new.” But when her husband, Adam, weighed the start-up cost against the potential to make additional money each month, she decided to come on board.

In the beginning, the couple “dabbled” rather than focusing on the business or aiming very high, but three years in decided to recommit. They dedicated themselves to learning everything they could. As their business grew, they were able to help Vicky’s mom while paying down debt.

Another reward of the Gomez family’s success was flexibility. Vicky credits their involvement with Amway for enabling the couple to be present in their kids’ lives, while instilling the importance of working hard and giving back. Their example has influenced the next generation, inspiring their eldest son, Adam Jr., to found a nonprofit organization called The Road to Help, which provides blankets to the homeless in the Los Angeles area.

Breaking into the family business

Intergenerational ties shaped Amway IBO Steve Victor’s story as well. His connection to Amway dates all the way back to the founding families.

“My grandparents were there when Amway began in 1959,” Steve said. “I grew up watching my parents follow in their footsteps by pursuing their own dreams and dedicating their lives to serving others.”

It was an inspirational example, but not a legacy that was casually handed over. If Steve wanted to follow in the Amway tradition, it was going to be up to him, and he was going to have to work hard and gain the respect of his peers.

He went to college to study business, with the intention of going to law school. A December graduate, he filled the in-between months working at the family business. As he spent more time with the Amway family, he came to realize that it was what he was meant to do.

Newly married, he continued working with the family business to pay the bills, while building his own Amway™ business in the evenings and on weekends. The couple started going to Amway meetings together, and within the first year of their marriage, his wife, Marcia, joined, as well.

“Our family story inspires others to build legacies of their own,” he said. “They see success through the generations and the impact it has on your family and community. The opportunity is open to anyone, but it really suits those who are hungry for something more. You have to have goals and be willing to do the work in order to achieve your dreams.”

A growing legacy

Amway has been in business for almost 60 years, and is now home to more than 3 million IBOs worldwide. The company has paid more bonuses than any other direct seller and is accredited by the Better Business Bureau.

Amway remains committed to the family-owned company’s core founding belief of helping people reach their potential, and the company plans to continue to direct its energy to empowering people and communities for decades to come.

The company is passionate about making sure everyone connected with Amway has a positive experience. Still have more questions? Visit Amway Answers to learn more about the business and products.