Is Amway An MLM?
With MLM horror stories like the LuLaRoe scandal, people are more aware of multi-level marketing companies than ever before. But MLMs have been around for decades, with Amway paving the way for future MLM business models.
Amway launched in 1959 in Michigan by two men looking to sell their products through a direct marketing scheme (via The Economic Secretariat). The company first sold an organic house cleaning product and later expanded their lineup to include vitamins, beauty goods, and other household items. The business has come a long way since its founding in Michigan. According to Amway, the company is now in over 100 markets worldwide.
Throughout its over 60-year-long history, Amway has cultivated a positive reputation among some. The company is known for its commitment to organic farming and giving back to communities in need, as explained on the Amway website. And it consistently maintains a good rating with the Better Business Bureau and a high score among customers.
However, the question of whether or not Amway is an MLM may bring some of this trust into question.
Amway is an MLM
Since it launched in 1959, Amway has been an multi-level marketing (MLM) company. The company pioneered many of the MLM strategies used by other businesses today like Rodan + Fields and Jeunesse.
According to the Federal Trade Commission, companies that "involve selling products to family and friends and recruiting other people to do the same" are considered to be MLMs. With Amway, sellers make money not only from selling Amway products directly to customers but also from recruiting other sellers to join their teams.
Though not all MLMs are illegal scams, they're often considered to be problematic because most distributors make little, if any, money, while top performers keep a disproportionate amount of the team's earnings. Since Amway is an MLM powerhouse (sales reportedly fetch over $8 billion a year, making it one of the top direct-selling businesses in the world), the number of people losing out in its scheme could be significant.
Amway's questionable business practices have caused legal issues in India and nearly got the entire company shut down in the UK. And though Amway and other MLMs are legally allowed to operate in the U.S., it's important to be well-educated on their practices before working for or buying from these companies.