In this post, Scott Johnson replies to a commenter, on Amway and how it compares with another MLM scheme, the notorious sex cult Nxivm. The commenter’s remarks are in bold. Johnson’s replies follow.
By Scott Johnson
Amway is an MLM scheme that peddles expensive soap by promising that if the buyer recruits new salespeople. one can ultimately become a millionaire.
WRONG. The recruits are NOT salespeople, they are recruiters.
Here’s a recent video that records how Amway cheats. I was taught the same thing over two decades ago, when I was a recruiter for Amway:
The mantra from my upline was “buy from yourself” [i.e. Amway – since you get a bonus/rebate, the term “yourself” is used].
I was told to teach others to do the same. It’s pure recruitment, with little to no retail sales to non-distributors. This is what makes MLMs illegal pyramids.
Amway is not really selling soap. —
That’s right, but not for the reason you are offering.
Amway is selling a pot of gold at the end of the rainbow.
Amway sells an illegal pyramid.
Over the years there have been numerous other MLM schemes like Shaklee that make the same outrageous promises.
The promises aren’t really the issue. The illegal pyramid is the issue.
The products are overpriced, which makes them almost impossible to sell to customers and results in Amway being an illegal pyramid.
MLMs sprout like mushrooms on manure piles.
Yes, they do. The answer is educating others, including your friends, neighbors, relatives, coworkers, the government, the media, etc.
The fact that Keith Alan Raniere started out in an MLM shows that Raniere is basically a stupid con artist.
No, it doesn’t. Most people who join MLMs believe they are joining a legitimate business model. They are wrong, but that does NOT make them stupid con artists. Raniere used the techniques he learned in Amway to start Consumers’ Buyline and NXIVM.
The only people dumber than Keith Raniere are the stupid gangsters who followed him.
Many of the people who followed Raniere were more influenced by his downline edifying him than Raniere himself. It’s how it works in MLM, and Raniere learned it well. Evil, yes. Stupid, no.
But the MLM scheme is the least egregious part of the Keith Raniere story.
MLM may be the least egregious part of Raniere’s story, but it is what enabled everything else.
Raniere is a rapist, a slave master, a sex trafficker, a child molester, a kidnapper and a possible murderer.
Yes, all enabled by the MLM techniques he learned while in Amway.
To some degree I doubt Scott Johnson’s declared rejection of Amway.
Why do you doubt? I’ve spent at least some time every single day since 2005 educating people about Amway and other MLM scams.
I endured a lawsuit from Amway, got a favorable settlement, and continued to educate people. The lawsuit didn’t slow me down, it energized me more. This lawsuit was separate from the Pokorny class action lawsuit against Amway, and the settlement can be found on my websites.
A few months ago Scott told me that I lacked the “self-confidence” to be a successful Amway salesman.
No, I said many people don’t join Amway and other MLM scams because they lack self-confidence, NOT because they realize that the MLM is a scam.
To be brutally honest the Amway system is designed to fail for 99.99% of all Amway salesmen.
This is true, yet most people don’t know WHY it is true. It has much more to do with the ATS (Amway Tool Scam) than the lack of retail sales.
Here is a partial list of MLM schemes. List of multi-level marketing companies
That is a very partial list, there are literally hundreds of them in the U.S., and thousands around the world.
The government can NOT protect you from every con artist.
But I expect them to use MY tax dollars to do their assigned job, regulate “unfair and deceptive” business practices.
The government can NOT babysit you.
I’m not advocating the government babysit anybody, but they need to do their job.
You must educate and protect yourselves. You must follow the Rule of Caveat Emptor. (Let the Buyer Beware.)
I advocate that, but the government should still do its job. For my part, I don’t lecture anybody. I educate them. Part of that education is for them to educate others.
Most people who join Amway have family and friends who have warned them it a scam. —
The education must come BEFORE they are approached, after they are approached is often too late. The hook has been set. MLM scams tell the prospects “people will be against them joining,” so when it happens, it only increases the MLM’s credibility with the prospect.
What I take issue with is when you attempt to try to draw the inference that Amway and NXIVM are the same thing.
I have never said Amway and NXIVM are the same thing. In fact, I’ve said, ironically, that NXIVM is the ONLY MLM I’ve come across that appears to be legitimate from the perspective of lots of retail sales to customers. What I’ve said is they use the same techniques, NOT that they are the same thing.
Not everyone who joined NXIVM was in the Raniere sex club, maybe 10% were. —
Not everyone who joins Amway and other MLM scams loses much time or money, because they don’t do much other than pay for some overpriced products, just like most people who take a NXIVM course or two don’t suffer nearly as much as those who joined the Raniere sex club. They just paid a few thousand dollars for overpriced “training.”
Amway cannot be compared to such an abusive criminal organization.
Amway can easily compare to such an abusive criminal organization. Amway is still running free, suing people left and right.
Nxivm members like myself suffered emotional, legal and financial abuse from the Nxivm inner circle. Nancy and Lauren Salzman, Clare and Sara Bronfman, Pam Cafritz, Barbara Jeske, Loreta Garza, Kristen Keeffe and the rest of Raniere’s goons.
Poor little victim. I lost a LOT of time and money and make Amway and other MLM scams suffer my wrath. I have an idea for you: GROW UP AND ACT LIKE AN ADULT. All of those goons you named are either dead, about to be sentenced to prison, or have virtually disappeared, probably never to be seen again. What exactly are you afraid of?
Scott, you want us to believe your “Me Too” situation, but Amway has been around for decades. If it was running a criminal RICO organization, they would have been shut down by now.
Bernie Madoff, Enron, Vemma, Herbalife, Advocare, Neora, etc., were around for many years before they were brought to justice.
Amway is a huge multi-national company making billions of dollars a year. Amway has been very visible. NXIVM was very well hidden until it started to get bad press.
Amway is not as visible as you think. You are thinking only about yourself, not the billions of people who have never even heard of Amway. The fact that it is big only makes it a larger scam than NXIVM.
NXIVM was in three countries and had less than 2,500 members. How much they made vs how much rich students gave them is unknown. They most likely never made close to a billion.
I agree, Amway and other MLM scams are a much larger problem from this perspective.
Amway is set up so most people don’t get rich, I will agree. So is Microsoft, Amazon, Ford, Southwest Airlines, and any other major organization. Not everyone can be at the top of a company.
Amway is different, It is actually set up so most people lose money. All of the companies you listed result in all of the people making money, some more than others. So they are not remotely comparable.
MLMs will continue as long as people buy into them. Just like Churches will keep their doors open as long as people come. Cults will happen because people want to follow someone they believe has a mission or an idea they want to follow.
MLMs will continue as long as people (including governments, the media, and individuals) aren’t educated.
We cannot make the world a perfect and safe place for everyone. We can warn and educate. It’s up to them to listen.
That doesn’t mean massive scams like Amway should not be shut down. Warning and educating takes effort.
Amway is and will never be a dangerous cult like NXIVM.
MLMs have caused divorces, bankruptcies, huge legal costs, ruined relationships, massive debt, and even sometimes statutory rapes, murders, assaults, – and on a much larger scale than Raniere ever dreamed of.
This 31 minute video by John Oliver sums up the insanity of MLMs far better than I can do and with humor.
I agree, that’s why I reference it when I educate people. However, even that video does not address the ATS, which is the much larger problem with many MLM scams.