Amway (short for America’s Way) is a multi-level marketing company. This means those that are salespeople for Amway try to recruit others to increase their downlines and income potential. If you’ve been recruited to Amway, can you make money selling it?
Amway is a multi-level marketing company, and in 2021 they reported the average income of all Independent Business Owners (IBOs) was only $766 on their Income Disclosure Statement. This is before expenses and taxes and doesn’t take into account any inventory purchased. Therefore, on average, the majority of people do not make money with Amway.
Keep reading to find out more information on how many people make money with Amway and how much it costs to be a part of Amway and about some of their legal troubles. I also list out statistics from their 2021 income disclosure statement.
As a reminder, I have an MBA, I am a Certified Public Accountant (CPA), and have almost 15 years working in finance and accounting. These are my opinions based on researched facts and my understanding of those facts. However, this is not legal, financial, or tax advice. If you need legal, financial, or tax advice, you should reach out to a professional for a 1:1 chat! All opinions are my own.
To jump directly to the PDF of the compensation plan click here.
Can I Make Money with Amway?
You will most likely not earn a significant income with Amway. In Amway’s 2021 Income Disclosure Statement they report that on average people made $766 per year and did not report an overall median annual income. This is likely because it is $0 or very close to it. In 2021 they reported that 33% of their IBOs earned $0.
This is consistent with what is expected in most MLMs. The further up the “upline” you are, the more you make. It is the way that most compensation plans are structured.
Just like many MLMs, Amway’s compensation plan is complex. It is pages and pages of fine print. However, to get to Founder’s Platinum, the rank that has a median of $45K earnings (before taxes/expenses) it takes on average 3-11 years. To reach this rank you must have 6 or more groups in your downline, that have specific sales volumes they need to reach to be bonus eligible. Then, you’ll need to maintain that team.
In short, just like any other MLM, to really achieve any real earnings with Amway, you’ll need to recruit a large downline.
Amway Statistics From the 2021 Income Disclosure
Here are some other interesting facts and statistics that can be taken from the 2021 Amway income disclosure statement:
- The top 50% of the company earned a median annual income (before taxes and expenses) of only $631. So this means even if you work hard, and make it to the top 50% of an MLM (which is not an easy feat) – you can expect about $600 before taxes and expenses
- If you work really hard and spend years (on average between 3 – 11) growing your Amway rank, only .58% (that is less than 1%) on average make more about $45,000 annually before expenses and taxes
- There are people who have been with Amway for over nine years and still earn only $19,000 annually (before taxes and expenses)
- Amway’s highest tiers of Founders Platinum, Platinum, Gold, and Silver have only been reached by 1.25% of the IBOs
- 33% of all United States Business Owners did not receive any payments from Amway in 2021. They had no reported sales, did not sponsor another IBO, and did not earn any commission
How Much Does it Cost to be a Part of Amway?
To join Amway, and for every year you are an IBO with Amway, you’ll need to pay an annual fee. In 2021 it was $76. However, when you start the business they first explain that the first way you’ll make money is by buying products and selling them at a higher price than you paid for them. This means, that you will likely be incurring expenses to build an inventory of products when you start your “business”.
You may also feel pressure to purchase products to meet sales goals to earn ranks and help those above you make ranks. The people above you will have a vested interest in your “success” in ranking up, as it helps them rank up. This is not unique to Amway. I would not recommend ever buying inventory to have on hand in an MLM or to make ranks. You will be losing money to making the uplines money.
What is Amway?
Amway is one of the world’s largest direct-selling companies (more about direct selling vs. MLM in this article) with over $8B of sales reported in 2018. The company holds over 800 patents on various products. After reviewing their website, they sell all kinds of products – from beauty and health to items for your home. Amway was founded in 1959 to sell a product called L.O.C. = Liquid Organic Cleaner. From everything I can find, they started as MLM originally, and have been since.
Some of the current top-selling brands for Amway include Nutrilite supplements, Artistry skincare and cosmetics, eSpring water treatments, and XS energy drinks. These are all exclusively sold through Amway’s IBOs.
According to Amway’s website, there are available in over 100 markets worldwide. This includes countries in Africa, the Americas, Asia-Pacific, Europe, and Greater China.
Amway’s Legal Trouble
Over the years Amway has had some legal trouble. Here are a few examples.
- In 2019 a Former Independent Business Owner filed a complaint that he should have been considered an employee and paid minimum wage for the time he spent in training and in meetings.
- In 2010 Amway settled a 2007 class-action lawsuit alleging the company and some of its top-level distributors operate an illegal pyramid scheme. It would provide compensation to IBOs who were in the company at the time.
Why are MLMs Bad?
Multi-level marketing companies are a controversial business model because the majority of participants lose money, and those at the top of the company are earning money while those at the bottom are losing. There is a constant stream of recruiting to make commissions of the new recruits. I wrote an entire article on why people don’t like MLMs which you can find here: Why Do People Hate Multi-Level Marketing (MLM) and Network Marketing?
If you liked this article, you could check out all my MLM-related articles here: MLM Reviews & Info
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