Amway Corporation is among the world's largest and best-known direct sales/multi-level-marketing organizations. (Amway's IBOs - 'Independent Business Owners' - who sell via the Internet instead of offline do so under the name Quixtar). Some sociologists consider many such such organizations to be 'para-religions' - movements that, while they can not be classified as religions, include some religion-like aspects (e.g. enthousiasm for the cause, recruitment and motivational rituals, positive thinking, etcetera).
How Amway works: Legal Pyramid Scheme
In Amway, one is recruited as an "independent" distributor of Amway products by buying a couple of hundred dollars' worth of the products from the one who recruits you, known as your "upline." Every distributor in turn tries to recruit more distributors. Income is generated by sales of products by the distributor plus "bonuses" from sales of his or her recruits and their recruit-descendants.
Amway defenders take offense at describing this method of sales and recruitment as akin to a pyramid or chain letter scheme. It is true that MLM as practiced by Amway is not an illegal pyramid scheme. Amway has been taken to court for being an illegal pyramid and the courts have ruled that since Amway does not charge people either for joining Amway or for the privilege of recruiting others as distributors, it is not an illegal pyramid. Illegal pyramids and chain letters have no product. Amway has lots of household products: from laundry detergent to vitamins, from cosmetics to water filters. Amway is a legal pyramid scheme.
Regarding Amway, others go further, claiming that certain recruitment and motivational tactics used within the Amway network make this organization something of a "corporate cult."
So-called "corporate cults" are businesses whose techniques to gain employee commitment and loyalty are in some
ways similar to those used by traditional cults
Amway is a multi-level-marketing (MLM) company in which participating sales people can earn extra income by getting others to sign up (rather than merely earn a commission on items sold). Amway produces and sells recruitment literature, audio messages, pep-rallies and incentives to help its sales force bring other distributors on board. It is said that
successful Amway distributors make the bulk of their income from these motivational products
, rather than from sales of Amway's other products.
It should be noted that often individual distributors become so focused on Amway's promises that they seemingly can think and talk about nothing else. They try to recruit friends, co-workers, fellow church-members, neighbors and just about anyone they meet in order to try and build their 'downline' (sales network). Many people are turned off by such an unhealthy, cult-like, 'devotion' to a business scheme. In addition, many people who join and try to make money by working for Amway (or similar MLM companies) discover that they spend more on marketing-, recruitment and training packages than they earn from actual sales and/or recruitment efforts.
Not surprisingly, Amway itself states that it is not a cult:
I've heard rumors that Amway is a cult. Is this true?
No, Amway Corporation is a business and, similar to other large and established companies, has a distinct environment defined by shared business goals. Shared business philosophies should not be misinterpreted as a cult.
As a part of a group of companies whose most recent fiscal year global sales totaled $4.5 billion and which manufacture and distribute quality products and services, Amway offers a business opportunity that is open to all, regardless of religious beliefs, race or gender. Amway really is a microcosm of the world, with more than 3.6 million entrepreneurs worldwide representing nearly every culture, ethnic background, and political and religious belief finding in the Amway business a way to meet their goals.
While unique as individuals, Amway IBOs share a desire to succeed in a business of their own and recognize Amway as an excellent opportunity to achieve their goals. New IBOs receive training, motivation and support in building independent businesses, and are rewarded for their achievements.
A close look at Amway will reveal that any reference to Amway as a cult is incorrect.
Procter & Gamble vs. Amway: Satanism Rumors
In an unrelated issue, Amway has been the subject of a legal fight on charges of spreading rumors about competitor Procter & Gamble
's alleged involvement with Satanism
. But court records show that such rumors were spread by a small number of independent, indivdual
Amway distributors. Moreover, as a lawyer for Amway pointed out, "Those individuals did nothing more than the thousands of other people who innocently talked about a rumor that they did not know at the time to be false. And the Amway distributors promptly retracted and denounced the message once they learned that it was false."
Note also that the Tenth Circuit Court of Appeals
has ruled that the Amway Corporation is blameless in this matter:
The Federal Court of Appeals for the 10th Circuit held Amway Corporation blameless
] in the spread of an old rumor about Procter & Gamble being involved with Satanism. This decision should finally put to rest Procter & Gamble's unjust efforts to hold Amway responsible for the false rumor.
The Court of Appeals, reviewing a decision by a Utah federal district court, soundly rejected P&G's accusations against Amway by ruling: "In the present case, P & G cites no facts to show that Amway told the distributors to spread the [Satanism] message." The court also stated that "Nothing in the record supports the conclusion that spreading ... satanic rumors regarding P&G ... was naturally and ordinarily incident to Amway's business."
"If a $40-billion dollar corporate Goliath like P & G continues to pursue its case against the four individuals in Utah, P&G will only prove that it is a corporate bully," said Mohr. "Those individuals did nothing more than the thousands of other people who innocently talked about a rumor that they did not know at the time to be false. And the Amway distributors promptly retracted and denounced the message once they learned that it was false. I am confident that these individuals will prevail; P&G is picking on them just because they are Amway distributors."
Earlier this week, Procter & Gamble and its attorneys, the Cincinnati firm of Dinsmore & Shohl, were ordered to stand trial in Michigan federal court on charges that they inappropriately funneled misleading documents to an anti- Amway web site run by an individual who was also a paid consultant.
"Before filing its first lawsuit, P&G praised Amway for its efforts to quash the Satanism rumor," Mohr said. "Since then, P&G has been cynically using Amway as a publicity scapegoat for a rumor they have not been able to stop for almost 20 years, and they let things get personal. We're glad to be vindicated."
Amway distributors tout their business as "the best business opportunity in the world." Yet of the five million or so Americans whove been involved over its 40 year history, fewer than 1% have made a profit, and fewer than one-tenth of one percent have established the large incomes that they claim are achievable by all.
Ruth Carter has written a clear, concise account based on her 15 years of experience as a distributor and five years of insider information as the employee of a Diamond. The book attacks head-on the accusations of deception, cultism, and greed which are so often leveled at the Amway business. Here at last are the reasons why, clearly explained by a former insider.
Amway Motivational Organizations: Behind the Smoke and Mirrors takes a serious look at:
- a real Diamonds annual income and expenses
- what is the "system"?
- who makes money in the system?
- what is a cult?
- why is Amway accused of cultism?
This book is a must-read for anyone whos ever been involved in Amway, or has suffered the pain of watching loved ones change their personalities and lose their money to the deceptions of an Amway Motivational Organization. "Amway Motivational Organizations: Behind the Smoke and Mirrors" picks up where "Amway: The Cult of Free Enterprise" and "Fake It Til You Make It!" left off.
Dr. Dave Arnott is a professor of management at Dallas Baptist University. Each year he delivers dozens of speeches and conducts numerous seminars on the relationship between the individual and the organization. His seminal article "The Organizational Community: Cult or Culture?" opened a floodgate of response and established his reputation as the leading expert on corporate cults. Dr. Arnott lives in Dallas, Texas.
About the Author; Amazon.com
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(May 16, 1999) Judge Tosses P&G's Lawsuit
(May 12, 1999) Amway Stood To Gain From Rumor
(May 3, 1999) Amway sells Satan rumors, Procter & Gamble claims in court
(May 3, 1999) Federal Trial Opens Against Amway
(Mar. 30, 1999) P&G lawsuit against Amway thrown out
(Mar. 30, 1999) Amway Suit Tossed by Federal Judge
Amway: The Untold Story
Ex-cult Resources Center: Amway
Pyramid Scheme Alert "The first international organization to expose, study and prevent illegal pyramid schemes."
Welcome to Amway : The Continuing Story
Extensive anti-Amway website.