Amway: 5 Realities Of The Multi-Billion-Dollar Scam

5 You Can Actually Lose Huge Amounts Of Money

We don't want to use the word "cult" lightly -- it's not like you'll get six meetings into Amway and find out it's all being done in service to the invisible space lizard Quixtar. But you've probably heard how groups like Scientology make their millions -- new members are roped in and told that the road to enlightenment runs through some very expensive course materials. Well, new Amway members ("distributors") are constantly promised there's a rocketship to success waiting just on the other side of the next $250 seminar. And then they're assured that those seminars are nothing without a $40 package of tapes and books to accompany them.

In both cases, the hook is the same, and it's targeted at the desperate: a little money now, a better life later. Only it's not "a little" money. As Kyritsis told us:

"The two years I was supposedly building my Amway business, I lost nearly $10,000 on tapes, seminars, books, gas, and traveling expenses for out-of-town seminars. My earnings? Less than $500 total. Since I was unemployed -- and pretty much unemployable for any nonburger-flipping job -- those $10,000 came exclusively from my grandmother, who was also my biggest (and only) Amway customer, buying expensive, 'concentrated' Amway products she didn't need, every month to support me."

Kyritsis got off easy. You can find stories online of people spending $192,000 to "make" $30,000 (shit, we think there are actual cults with a higher rate of return). It's impossible to know the exact "success" rate for Amway independent business owners (IBOs), but one case from 2008 showed that out of 33,000 IBOs, only 90 made enough money to cover the costs of their business. That's a failure rate of damn near 100%. But of course, to Amway, those aren't failures. Amway doesn't make its money selling the random household goods the distributors are handing out -- they make money selling a dream. Then once you've committed yourself and forked over serious cash -- and convinced friends and family to do the same -- how can you leave? At this point, you've got too much invested not to see it through.

We should also note that Kyritsis lives in Greece, a country just coming through the other side of an intense financial crisis (see: "targeting desperate people", above). Amway is based in Michigan, but they do about 90% of their business outside of the United States. It's not hard to see why: Amway is increasingly well known as a scam in the U.S., and American citizens have an easier time suing the company for unethical business practices. In 2010, Amway settled with disgruntled American customers for $155 million.

This is why the moment you walk in the door ...

4 You're Specifically Told Not To Use The Name "Amway"

People who sell for Amway literally have no idea what they are getting into because the training system bends over backwards through hoops of fire to try to keep any useful information out of the hands of their representatives. It's actually incredibly hard for most users to know where actual "Amway" begins and ends, because a cottage-industry of other scams have leapt up around Amway's business model like hallucinogenic mushrooms on cow shit. Kyritsis received all of his training through a group called Network Twentyone, who make a tidy profit charging people to teach them how to sell Amway:

"There are different training systems to build an Amway business (Dexter Yager Internet Services is another one) and they are separate corporate entities than Amway."

Although they are separate companies, Network Twentyone was founded by Amway distributors and, obviously, helps to drive Amway sales via its own borderline cultish system, which have included things like torchlight parades and advising distributors to threaten to hit customers on the head with Amway tapes, forcing them to take the tape to defend themselves. Obviously, Amway is quite aware of companies like Network Twentyone and is completely fine with them, as long as they drive business and never mention Amway's name. This is where things turn distinctly more Fight Club: Sellers are instructed to never say the word "Amway" while pushing their products.

"We were warned never to use the name Amway on the phone; even while showing the business plan, the name would be one of the very last things mentioned. The explanation from our 'sponsors' was that people in the past have misused the name 'Amway,' and people should get a chance to know the 'new Amway' without being prejudiced from things they might have heard."

At that point, they were sent out into the world to try to rope in every single person they encountered, all without ever saying who they really represented:

"This was a textbook invitation: Speak quickly, as if you are in a hurry, make a very broad connection with something relevant the person might have mentioned in the past, involving money, a business, the Internet, etc., invite them to a one-on-one or house meeting, never give any more information over the phone, never mention the name Amway."

That's a lot of trouble to go through to convince someone to be a part of your totally legit, not-deserving-of-that-prejudice-in-any-way company. "But that doesn't really sound like a cult!" you might say. "That just sounds like any ol' shady business selling door-to-door bullshit!" Well ... take a moment to watch one of their videos:

Yeah, it turns out ...

3 They Recruit Through Brainwashing And Lies

"The first part of the brainwashing," says Kyritsis, "was that 'there would be no success without the system.'" What's the system? The system is a series of seminars, recordings, and books that claim to be a guaranteed path to master salesmanship. Following Amway's guidelines successfully is seen as the only path to success, so if you aren't making money, it's because you're not "working the program" properly. Any success is due purely to their teachings, any failure is due to you not following them hard enough. Sound familiar?

And as we mentioned above, those materials promising you the skills to turn your financial life around are the product. "What most people don't know is that the successful members at the top of the pyramid were making way more money from promoting the tapes, the books, and the seminars, than selling Amway products."

Proof of the company's overwhelming manipulation isn't hard to come by. All over YouTube you can find videos like this one where the intro song repeatedly claims these people have found a way to beat the recession and travel the world, with lyrics like, "Anyone with eyes can see we are successful" (we assume it flows better in its native language). If you sit through the song long enough you'll see Amway distributor Patrick Joe's epic introduction before he starts excitedly screaming and getting the audience to chant like he just found Jesus, or learned Rush finally made it into the Rock and Roll Hall of Fame:

Most Amway videos are equally epic and once again completely devoid of any specific information whatsoever. That last video is nothing but pictures of smiling people set to a pop song about "wanting more out of life" ...

and occasionally interspersed with pictures from Amway conferences:

So maybe it won't be much of a surprise to learn that ...

2 Their Lies Start Ruining Your Life

Look, there's actually one really simple, easy way to tell the difference between a legitimate job and a scam. Just ask them, "How much will I get paid to work for you?"

If they quote you an exact salary or an hourly wage, it's probably a legitimate job. You can safely assume that you're the mark if they start using words like "opportunity" and "downline" or present you with completely unintelligible pie charts like this:

When a company like Amway does give you numbers, it's never what you can expect as a salary. And if they do mention specific numbers, it's usually something like this:

But remember, any cult-like group works by surrounding you with people insisting that these obvious red flags are really just proof they can think outside the box. Can you? You don't see those boring squares out there paying cash up front for the chance to sell detergent and lipstick door to door! That's how you know it's a good idea!

So, after hearing the Amway rhetoric on an endless loop, recruits start to make disastrous decisions, and each one is applauded by their peers. In Kyritsis' case, his "friends" at Amway even encouraged him to give up on his education. "They would actually compare having an Amway business with getting royalties, like from a book or a song. That you build a network once, and it pays you forever, even if you stop working. So, why go to college when I can make a successful Amway business without any degrees? For me, as a 21-year-old idiot who never had a full-time job and lived with his parents, that was reason enough to drop out of college, and I never got my degree."

Of course, Amway doesn't actually pay "employees," so Kyritsis needed a real job in order to "afford" his Amway job. And he nearly lost that real job trying to convince his boss to buy into the fake one.

"The only job I had during that period was a part-time job at a government-sponsored program, where I would give a couple of hours of computer lessons to small-business owners. I nearly didn't get that job, because when I first met with the director that organized it, I thought I would give her a special tape for prospects. Because which time is better to try and recruit someone, if not when you are going to them for a job?"

"After that, I would also show the business plan to the businessmen I was supposed to teach about computers. Because, of course I would."

See, that's the thing -- part of the wonderful Amway experience is relentlessly badgering everyone in your life to join Amway in one capacity or the other. And as you can guess ...

1 You Wind Up Making Everyone In Your Life Hate You

In Amway's eyes, your friends and family are all potential cash cows you should be milking -- you're trained to go after the people closest to you first (to rack up those sweet pity sales). "I was thinking that every friend that didn't join my network didn't want success for himself or me, that he was somehow against me." This crazy train of thought led Kyritsis to harass his loved ones in an attempt to better their lives. Desperate to convince someone of the amazing untapped Amway potential, Kyritsis pushed the Amway rhetoric on anyone who would listen, especially his girlfriend. He would tell her that her studies were pointless when she could be making so much more money, dragging her to seminars and showing her the Amway tapes like a really boring version of The Ring.

Worse than the girlfriend sabotage, Kyritsis burned a couple bridges with the one person on Earth most likely to put up with all this malarkey: his mother. Kyritsis got angry that she wouldn't buy any of the overpriced products and support his "success." When he started realizing everyone around him was done listening to his sales pitch, Kyritsis decided he needed to expand his market, which he did by inflicting himself on his parents' social circle, out of desperation.

"The worst thing that happened was the 'list.' My parents are both members of a nonreligious spiritual organization, and they volunteered to keep the other members up to speed regarding upcoming events and meetings. So, they had an extensive list, with hundreds of names and phone numbers. I had asked my mother for that list, and she understandably said no. A while later, having exhausted my personal list, I went behind her back, made a copy of her list, and started cold calling them. When my mother found out, she was furious. This led to a huge fight, and soon after I left home and went to live with my grandmother. More than a year passed before I spoke again with my parents or sisters."

So there's the alienation of friends and family who aren't in the group, which is pretty much the final ingredient in the standard cult cocktail.

So, yeah, not exactly what you're expecting when you click a banner ad, hoping to maybe make some money on the side selling vitamins and skin cream.

Kyritsis failed miserably in "Network Marketing," but he still enjoys computer networks. You will find his detailed how-to guides about technology on PCsteps.com. Carolyn is the latest and greatest Personal Experience team member; send your crazy stories to Tips@Cracked.com or believe every word she ever says on Twitter.

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