Former high level Amway distributor Eric Scheibeler, author of Merchants of Deception, offers this perspective on the Amway “business” and whether it can really be considered a good opportunity:
Amway Global: Fact, Fiction or Business Opportunity Fraud?
Perhaps you have seen the television commercials for Amway global promoting that Amway operates in “50 different countries and helps put over 3 million people into business for themselves… we are a company of opportunity.” Do the “Independent Business Owners (IBO’s) actually own an independent “business”?
They certainly are induced to “invest” in their own business but there are quite a few differences. First, IBO’s have no control over the cost of their own business products, which high level leaders have described in court documents as “hopelessly overpriced”. Second, you could spend a decade investing in “your own business” and building a network of people and if you decide to leave for more lucrative opportunity and bring the organization you developed (your equity) with you, chances are you may be litigated against and find that Amway/Quixtar (and its well funded legal teams) considers your downline line of sponsorship their property.
You also can have your income literally stopped on a day’s notice while your legal expenses are being driven through the roof. In what truly “Independent Business” can someone else literally shut off your income and claim your “business” after a decade of work and investment?
The documentation seems to support a nearly 99% loss rate for IBO’s in the US. Documentation also supports that Amway Senior management has known that deceptive practices were being utilized upon its trusting distributor force as far back as the early 1980’s. See additional details located at The Amquix Smoking Gun.
Assistant Wisconsin Attorney General Bruce Craig prosecuted Amway in the early 1980’s and stated “tax returns (obtained for this litigation) of all active Wisconsin Direct Distributors, the company’s top 1%, showed an average net income of minus $900.” I was shocked to learn that it was almost identical tactics that were utilized upon myself and our organization decades later.
Justice Norris, in the recent MOD initiated and supported UK Government case against Amway reported in 2008 that out of an IBO population of 33,000, “only about 90 made sufficient incomes to cover the costs of actively building their business.” If this is accurate, that seems to be close a 100% loss rate for those investing in the Amway UK “business opportunity”.
I personally advised senior management of, in my experience, the 99% loss rate for IBO’s when I terminated my distributorship on August 8, 2003. I advised the corporation that I could not accept “blood money” that was generated from new people who were systematically being deceived. The shocking events that followed are detailed in my book “Merchants of Deception”.
The corporation and its high level motivational recruiters have been plagued with lawsuits and/or arbitrations for decades yet continue to recruit new consumers to “invest in the opportunity”. This is despite full knowledge of losses for almost all participants, similar in some ways to the actions of Bernie Madoff, the infamous Wall Street Swindler. New consumer investors are simply recruited to replace almost all who have lost and drop out, with much of the money being transferred from those at the bottom to those at the top of the pyramid (the corporation and a small percentage of high level distributors).
The movement of products simply camouflage the transfer of funds from new investors on up.
Hear audio of Amway executives talking about how wonderful the Amway – Quixtar opportunity is on Eric’s site: