Amway could be viewed as a pyramid scheme

Many people long for success and fortune. Amway promises to fulfill this longing - and thereby lures tens of thousands of "advisors" in Germany alone. The following report describes how ingeniously the company, which is almost unknown to the public, is doing it.: The dream of big money


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A conventional pyramid scheme is characterized by the fact that those who are at the lowest hierarchical level have to foot the bill in any case. For example, the fact that the product to be sold increases in price from stage to stage and thus, when it has reached the last stage, has a price at which it can practically no longer be sold. Contractually agreed minimum purchases - with no return option - get those who were careless enough to get involved in a mess. The mostly even inferior goods are so overpriced that it is not even worth trying to sell them at least at a cost that covers their costs.

Pyramid schemes of this kind are fraud in the legal sense and a case for the public prosecutor in the Federal Republic of Germany. Systems of this type don't last very long either; after a relatively short time the house of cards collapses and what remains are a few hundred injured parties and a rather malicious environment.

This is all different with the pyramid system of Mr. Müller-Meerkatz. There are no minimum orders. In addition, it is guaranteed that every consultant can "return anything he does not sell at any time for a refund of the full purchase price". Since every consultant works as an independent businessman, the deviation of individual consultants from the so-called "ethical guidelines" of Amway-GmbH cannot be blamed.

The argument that those who got into the business relatively late would not stand a chance either, does not hold up to closer analysis. There are no locking bars built into the system to prevent this. It is true that with a growing number of consultants the point comes at some point where it is no longer worthwhile for the newcomer to act because too many of those he could sponsor in his contact networks are already sponsored. But that's a theoretical consideration. With about forty thousand advisors in the Federal Republic of Germany, this could easily become fifty, sixty, or perhaps even a hundred thousand.

In principle, the pyramid system works exactly as its inventors propose - but only in principle. In fact, the advisor operates in relatively saturated and therefore highly competitive markets. The products that Amway supplies are well above the average price level. In normal retail or door-to-door sales, they would hardly be deductible in this amount. Presumably, because of their price, they are only "competitive" because the advisor goes into his private contact network with the goods. This means that the exact view of the price is often lost. After all, you won't let a friend down for a few marks who is just starting his own business.

But there are also the practical limits of the model. The average turnover of around 4,000 marks per year shows how far such goodwill extends. The problem is therefore not the pyramid system. The limit lies in the market share that Amway can secure with these products, these prices and this distribution channel. Of course, this is not mentioned when recruiting consultants. "Do you want to earn a modest extra income?" - that is how the question should realistically be asked today. In fact, it works the other way around in practice. The desire for success, greatness, wealth is stimulated by a whole bunch of psychological tricks and tricks, existing sense of reality is obscured, so that finally the suggestive promise that seems to lie in the models of the marketing plan can unfold its effect. The growth of Amway GmbH in Germany is based on the fact that large parts of the sales organization are working systematically to exploit the rampant dreams, fantasies and illusions of innocent people.

Master of Ceremony