Amway is a company that sells products directly to its customers through independent "Amway Business Owners" since 1959. However, it has been accused of running a pyramid scheme, and the term "Scamway" has been used to describe it. A pyramid scheme is a fraudulent business model where people are lured into joining the company and buying their products at unreasonably high prices, not for use, but to become a member of the company. The commissions received by the upline members contribute enormously to the hike of prices of the products.
Despite these accusations, Amway claims that it is not a scam or a pyramid scheme. The company has been recognized by the United States Federal Trade Commission as a legitimate direct selling business whose distributors sell quality products to consumers, and where no one earns income unless products are sold. Specific factors that differentiate Amway from a pyramid scheme include:
- It is a low-risk, low-cost business start-up.
- No money is made on recruiting alone.
- There is no minimum product order.
- An individual can earn more than the person who recruited them.
- Amway offers a 100% money-back guarantee on the business registration fee, as well as a 100% satisfaction guarantee on most products.
- Retail selling is required.
In conclusion, while Amway has been accused of running a pyramid scheme, the company claims that it is not a scam and has been recognized by the United States Federal Trade Commission as a legitimate direct selling business.
