Author Topic: Cracked on Amway  (Read 7897 times)

Beowulf

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Cracked on Amway
« on: May 18, 2015, 08:14:14 PM »
I know hating on Amway and similar companies is a bit cliche around here, but this Cracked piece nails it. http://www.cracked.com/personal-experiences-1620-amway-5-realities-multi-billion-dollar-scam.html

TheGrimSqueaker

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Re: Cracked on Amway
« Reply #1 on: May 18, 2015, 09:27:44 PM »
It always amuses me that Scamway is still around. It's as though people aren't capable of reading or doing background research before they jump on a bandwagon.

Zx

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Re: Cracked on Amway
« Reply #2 on: May 18, 2015, 10:40:12 PM »
I actually listened to their spiel in the early 90's, thought it sounded great and joined up. Paid 135 dollars for my starter kit.

One of the things that my "direct" told me to sell me on this was that the market outside Amway had the chain of Manufacturer/Detailer/Wholesaler/Retailer/Consumer. Every step gets their cut, making the retail price very expensive.

Amway, in their great wisdom, cut out the Detailer, Wholesaler, and Retailer so that Amway's prices were both lower and more profitable. That sounded good to me.

Then I got my first catalog. EVERYTHING was more expensive than you could find at the local store. Everything. And not just a little, ok, it was a LOT more.

As the whole premise for me getting into it was a lie, I was out just as fast. Used up the product I overpaid for to get in, and that was that. Since then I've had my eyes opened to the fact that there was a whole lot more lying and scheming going on than just that, but just one lie was enough for me.

Travis

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Re: Cracked on Amway
« Reply #3 on: May 18, 2015, 11:36:17 PM »
I mentioned this in the comments and I think it bears repeating here:

Rule #1: If they require you to spend money up front to learn information that is probably available for free on the internet - it's a scam.

Rule #2: If the business model encourages you to pitch to your immediate family with little notion of how to sell to complete strangers - it's doomed to failure. (the epic tale of the nonprofit from a few weeks ago came to mind)

Rule #3: If your name isn't on the masthead and you're peddling a product - you're a salesman, not a business owner. Don't fool yourself. You're not fooling anybody else. You're even less than a salesman since you have to front the cost of the product and you're working for a small commission.

Rule #4: If the business model requires you to send a cut to the person who recruited you, and the system officially encourages you recruit others in order to cash in on their income - it's a fucking pyramid scheme!

Someone replied to my comment with an addendum: "if you have to purchase various things from the company to "run your own business," you're the customer."

cerebus

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Re: Cracked on Amway
« Reply #4 on: May 19, 2015, 01:21:47 AM »
Great article, so true - and not just Amway. There's dozens of these companies around and they all operate the same way. My wife has been hounded by a woman from a certain Mannatech, oh and here we are: http://mannatechscams.com/

Gen Y Finance Journey

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Re: Cracked on Amway
« Reply #5 on: May 19, 2015, 01:25:06 PM »
Every time an MLM thread starts up on here, I can't help but jump in. My SIL is constantly going to training seminars (often FLYING to get there), and posting on facebook about all the amazing, inspirational people she's meeting. I'm sure at this point she's spent well over $10k on training seminars and products (her MLM is a travel program, so she'd argue that when she flies to seminars, she's really making money for herself), and earned less than $500. The only thing she's getting out of it is inspiration that she can be as successful as she wants to be, which I don't know, I guess is worth something? She goes on and on about how her potential income is limitless and she doesn't have to answer to a boss. I'm not the biggest fan of my boss, but I'll deal with him if it means I can take home my stable almost-six-figures income.

The worst part is that the "deals" her company offers are rarely better than what you can find on any other site, and the pricing is designed to be confusing. For instance, they'll sell vacation packages on a per person basis, including the hotel room, making it really difficult to figure out how much you're paying for each individual component of the package so you can compare it to other sites.

But she sees it as getting paid to travel, so her family now goes on a ridiculous number of crazy expensive vacations. Meanwhile her poor husband is slaving away at his actual job to fund their stupidity.

MsPeacock

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Re: Cracked on Amway
« Reply #6 on: May 19, 2015, 04:12:15 PM »
I grew up in Michigan in the 70s - which was basically ground zero for Amway. It was nuts - and hard to believe that the company still makes billions even now. I knew a few families that made a lotof money and then just as quickly blew through it w/ a corvette or an inground pool (useless most of the year in Michigan). Same w/ MaryKay and Tupperware an Magic Chef and etc. etc. etc.

benjenn

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Re: Cracked on Amway
« Reply #7 on: May 19, 2015, 04:40:04 PM »
Whenever an annoying person asks us what on earth we're going to do when we retire, we tell them we got in on a great deal and we're going to be selling Amway.  It's hilarious to watch how quickly they shut up and move along.  :)

greenmimama

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Re: Cracked on Amway
« Reply #8 on: May 19, 2015, 06:05:33 PM »
I live where Amway was started, the owners and their offspring have poured a lot and I mean a LOT of money into our fair city, but yeah, I can't believe it exists, I guess everyone wants to win the lottery and they can paint it like that.

SwordGuy

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Re: Cracked on Amway
« Reply #9 on: May 19, 2015, 07:24:47 PM »
They may be scams but my aunt made a good living for many years selling Mary Kay.    Pink cadillacs are ugly, and I've seen quite a few of them over the last several decades.

Zx

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Re: Cracked on Amway
« Reply #10 on: May 20, 2015, 10:55:25 AM »
Whenever an annoying person asks us what on earth we're going to do when we retire, we tell them we got in on a great deal and we're going to be selling Amway.  It's hilarious to watch how quickly they shut up and move along.  :)

Totally awesome!!

TheGrimSqueaker

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Re: Cracked on Amway
« Reply #11 on: May 20, 2015, 07:43:31 PM »
They may be scams but my aunt made a good living for many years selling Mary Kay.    Pink cadillacs are ugly, and I've seen quite a few of them over the last several decades.

Hmm, there's nothing inherently bad about direct marketing, except it's gotten a bad rap because of all the pyramid schemes. The difference is this:

A reputable direct marketing company like Regal or Mary Kay offers a product that people want and can use, and that is reasonably priced for the quality and comparable to what you'd pay buying a similar product in a store. Also, the payment structure is simple: there's at most one salesperson, not an endless line of people earning layer after layer of commission. Salespeople don't have quotas and aren't required to buy or use the product themselves, so overall it's a low-pressure sales situation that dealers really can do in their spare time. The vast majority of money a dealer makes comes from selling product, not recruiting other people. Although some training and networking opportunities exist, the system is easy to understand and the company's documentation is quite clear. Not a lot of special training is needed. So sales or recruiting "tools" are not being actively sold to the dealers, and dealers almost invariably make more than they spend.

With a pyramid scheme, the distribution mechanism is direct marketing, but all the points in the above paragraph are the opposite. The product isn't something people usually want or can use, or if it is, it's grossly overpriced because of multiple layers of commission due to the downline structure. Salespeople are frequently on quotas and often end up buying unwanted product themselves. The result is a high-pressure sales situation, and dealers often find their "spare" time and their social capital is consumed trying to get other people to buy product. Most of the money a dealer makes comes not from selling product, but from recruiting other people to sell on his or her behalf. The incentive is therefore to build one's "downline" using a byzantine and poorly documented process. Finally, because this kind of setup is inherently unsustainable business-wise, "tools" such as tapes, books, and seminars are sold to the dealers. Dealers nearly always end up spending more than they make.

Elderwood17

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Re: Cracked on Amway
« Reply #12 on: May 21, 2015, 12:36:46 PM »
Whenever an annoying person asks us what on earth we're going to do when we retire, we tell them we got in on a great deal and we're going to be selling Amway.  It's hilarious to watch how quickly they shut up and move along.  :)

I need to remember that! 

AJ

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Re: Cracked on Amway
« Reply #13 on: May 21, 2015, 01:28:49 PM »
Rule #2: If the business model encourages you to pitch to your immediate family with little notion of how to sell to complete strangers - it's doomed to failure. (the epic tale of the nonprofit from a few weeks ago came to mind)

If you invite me to a "party" and it turns out to be a sales pitch, we are not friends anymore. Seriously, you're fucking dead to me. That stuff boils my blood.

Travis

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Re: Cracked on Amway
« Reply #14 on: May 21, 2015, 01:34:51 PM »
Rule #2: If the business model encourages you to pitch to your immediate family with little notion of how to sell to complete strangers - it's doomed to failure. (the epic tale of the nonprofit from a few weeks ago came to mind)

If you invite me to a "party" and it turns out to be a sales pitch, we are not friends anymore. Seriously, you're fucking dead to me. That stuff boils my blood.

The Cracked comments for this article are full of people whose friends literally ambushed them into attending a meeting or came up on the net after years of silence with "let's catch up" and brought their sales kit with them.  In one of them two friends were at a bar and the other said "Let's go to this party I know of," drove them in his car, then when the other guy figured out he was being dragged to an Amway party tried to leave, but the driver refused to take him back to the bar.

MgoSam

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Re: Cracked on Amway
« Reply #15 on: May 21, 2015, 01:43:10 PM »
drove them in his car, then when the other guy figured out he was being dragged to an Amway party tried to leave, but the driver refused to take him back to the bar.

That might be considered 'false imprisonment.'

vern

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Re: Cracked on Amway
« Reply #16 on: May 22, 2015, 12:20:46 AM »
If you invite me to a "party" and it turns out to be a sales pitch, we are not friends anymore. Seriously, you're fucking dead to me.

I love it!