Sunday, June 3, 2012

Dirty Little Secrets of Their Little MLM Cult

Have you ever had an invite from a friend, associate, or a stranger that left you in the lurch wondering just what the invite was all about? Maybe, just out of the blue, an old acquaintance that you have not seen since high school calls you up and invites you to see something that is so important that you absolutely must do it! Your old friend is very vague about just what this "something" is. Even if you become suspicious and ask if it is "Amway? (Herbalife? Xango? Monavie? Nuskin? Mary Kay)" Your friend might respond and say something like this: "I can't really talk about it over the phone; you will just have to see this for yourself." Your curiosity has been piqued. You most likely have just been exposed to the "curiosity invite", one of the devilish recruitment tactics of a multi-level business opportunity schemes.

Amway is the most well known, although there are other 'clones' that operate basically using Amway's pyramid recruitment practices. Amway claims to be the number #1 on line retailer of health and beauty products in the US, although most of their sales are to their own distributors. These distributors are basically the only real customers for the products which are intentionally priced to be unsellable outside of the distributor chain.

Amway's reputation in the United States has been tarnished by a series of scandals, whistle-blowers, Dateline scrutiny, and bad word of mouth. Amway has run advertising and commercials to help revive their negative image. Amway distributors are called are called either 'Amway Business Owners' (ABOs) or "Independent Business Owners (IBOs). for convenience. These 'distributors' are part of a 'pyramid'system that includes an "up-line" and a "down-line." These 'distributors' receive a distributor discount on the products they buy whether they are sold at retail or consumed at home. The idea is that any product that they retail at full price provides them with profit margin.. Buy at a discount and sell for full retail price is a universally accepted method of making money in any business, but realizing a profit in this business (or many of the other MLM clones) can be very difficult to achieve.

The remainder of this blog post will describe the 'dirty little secrets of their little Amway cult.' A very small number of Amway distributors are known collectively by US courts as 'kingpins. These kingpins run a 'shadow' business monopoly business selling motivational training materials to include seminar and rally tickets which is known as the "tool and function" business. The name 'kingpin' is also used to describe key high level 'capo' in the mafia. Law Professor G. Robert Blakey produced as evidence in Procter & Gamble Company, et al. v. Amway Corporation, et al  which had been ordered 'sealed' but which was subsequently 'leaked.'  Robert Blakey's report said:
"It is my opinion that the Amway business is run in a manner that is parallel to that of major organized crime groups, in particular the Mafia. The structure and function of major organized crime groups, generally consisting of associated enterprises engaging in patterns of legal and illegal activity, was the prototype forming the basis for federal and state racketeering legislation that I have been involved in drafting. The same structure and function, with associated enterprises engaging in patterns of legal and illegal activity, is found in the Amway business." 
Amway kingpins are introduced to new Amway recruits with exalted titles like "Ambassador."  These names are called 'pin' levels that provide aspiring Amway believers are taught to aspire to become and emulate.  The majority of 'kingpins' were early adopters in the Amway pyramid system and reside near the top of the organization.  Their wealth and monetary success are paraded in front of the distributors as proof that one can become wealthy if the Amway 'system' is followed.  The kingpins supposedly sell the 'secrets' of success to their 'down-line' Trappings of wealth serves as the "bait" for starry eyed 'newbie' distributors who have been told that they can also rise to the top of the Amway pyramid. Visions of money, palatial estates, and luxury automobiles inspire the flock to 'slave' under Amway's totalitarian system. New distributors are taught that success in Quixtar comes from profits generated in selling and recruiting a never ending chain of new distributors who will share some of their profits with their 'upline.'
The dirty little secret of the Amway Cult is that the sale of product does not provide the spectacular wealth of those at the top of the pyramid, but it is the sale of the secrets of success: the Amway tools.
Distributors in the Amway business soon realize that the sale of Amway products is difficult and realize that recruitment is the road to the promised treasure.  Therefore, they spend most of their time trying to recruit new distributors into their business where an 'annoying' invite to prospects is made and where the plan is 'sprung' on the prospects. Believers are strongly urged on by the training materials and their up-line superiors.

Amway distributors strive to build a down-line business and new recruits are encouraged to buy the tools and attend every 'function' as the 'key' to become the next Amway success story. The 'tool kingpins' smile all the way to the bank with their tool profits.

In times past, distributors were told that the tools were sold at or near cost and that success in the business came from Amway--not from tool sales. The 2004 Dateline expose on Quixtar (Amway) corruption exposed the dirty little secret of the Amway cult. Although Amway/Quixtar has denied these allegations ever since, the truth has been an open secret.  Not all distributors are fooled by the Amway propaganda machine and have fostered some many a disgruntled, angry distributor which lead to a revolt.

The tool kingpins operate a bait and switch operation; their tool sales benefit by high distributor turn over that the high cost of following the Amway 'system' requires. New distributors represent a cash cow to the kingpins, as the older distributors require less training. The hopeful new distributors  come into the business and are driven like cattle through the "money making machine." Very quickly these treasure inspired believers begin shelling out their own treasure and find themselves in a catch 22.  Like "Simple Simons" they buy the Secrets, attend seminars and rallies and absorb all the 'over-head.' Eventually,  expenditures, unfulfilled expectations, and disillusionment bring their Amway dream to an end. As proof of this, many of these Amway business failures put their accumulated books, cds, videos, materials and unsold inventory up for sale on web auction sites like Ebay at incredible discount . Many times these tools receive no bids, go unsold and remain relatively worthless!

The up-line distributor, in anguish, must now recruit more down-line to replace those that quit. Remember, his goal is to retain new distributors who will help him become profitable by buying products. An distributor constantly must struggle, expend more time and money in search of replacements.  He becomes like a man trying to run up a down escalator: two steps up and one step down; one step up and two steps down! His continued efforts hardly benefits him at all while at the same time it produces a steady stream of new distributors that will for a while buy tools from the kingpins. There are three distinct groups of people in the Amway/Quixtar business, the company owners, the tool kingpins, and the body of every day distributors. The first two groups benefit and prosper from the business while the last group of distributors do all the recruiting, buy the products, and also buy all the tools.

People struggling to succeed in Amway have little time to spend with their family and suffer social stigma. Family and friends become 'disconnected'.  Married distributors are forced to place children in the care of relatives or babysitters.   Marital discourse may arise. Uplines constantly make demands to buy product, tools and to 'show the plan.'  Success in Amway usually ends up not it fulfilled dreams, but in broken ones.  They have been taught that failure is caused by not working hard enough and for not following the system.  It is system that many times the cause of their failure.  99% of those joining Amway never show a profit.


2 comments:

  1. Hi I am from India, I recently had a similar experience too! Of course I knew in and out of system their, four basics, nine core steps and cardinal rules and so on. A guy called me on a sunday morning saying he is doing some 'business' nothing related to IT jobs, some retail distribution affiliated to fortune 500 companies and blah blah... He said we are looking for sharp people and I asked him right away, how do you know I am a sharp person and he had no answer. Please find my stories at http://amwayscam.wordpress.com/

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  2. You can see this. It helps MLM people: http://www.profitclicking.com/?r=colo

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