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Old 10-10-2002, 11:11 AM
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Difference between Amway/Herbalife and Avon/Tupperware/Mary Kay/etc.

Why does a company like Amway or Herbalife always get such derision, while companies like Avon, Mary Kay, Pampered Chef, or Tupperware don't? I always thought their business models were similar (get people to not only buy but distribute the products to their friends and families, and try to get said friends and families to be come distributors as well), but it always seems like Amway and Herbalife are vilified as cults (which I'm not disagreeing with - that would be a GD or IMHO) while the others, are seen in a less negative, even positive light.

My GQ, then is: Is there a difference in the business models of the companies I mentioned that results in some being seen as "evil" and others being seen as "acceptable"?

Mods, if it degenerates into something that would be more appropriate to GD or IMHO, please feel free to move it (yeah, like you need my permission to do it ).

critter42
Old 10-10-2002, 11:46 AM
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I don't think the perceived difference has to do with the business model, per se. They are all MLM arrangements. It has more to do with the products themselves and/or the way the companies choose to execute that strategy. Amway is seen as a cult because it acts like one, trying to pitch itself more as a lifestyle than a business opportunity. Herbalife is seen as selling snake oil. To put it bluntly, Avon, Mary Kay and Tupperware operate with a bit more class, and sell reasonably good quality products with a narrow focus.

A measure for the reputability of an MLM operation might be how much revenue is generated from direct commissions on the actual products, as opposed to kickbacks for signing up more distributors.
Old 10-10-2002, 01:40 PM
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I agree with yabob - any time I've attended a MayKay, Pampered Chef, Tupperware party, the focus has been on getting me to buy items.

With Amway, I've never even seen a real product - the focus has always been on signing up more "distributors". I'm sure that Amway actually has products - I just have no idea what they are.

See?
Old 10-10-2002, 01:47 PM
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I actually know 2 people that were so taken by Amway and wrapped up in its BS, they quit their well paying, secure jobs. They lost everything within a year, including their familes.

The sad thing is, both of them are STILL pro Amway.

It really is like a cult. Its kinda freaky.
Old 10-10-2002, 02:49 PM
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In Amway's defense, they do have products. Good ones, too. I've never to deal with the real marketing crap they pull, because my grandmother has always sold it. She got hooked on it back in the late 60s/early 70s because a lot of it is biodegradable and good for the environment, and back then, not that many products availabe in our neck of the woods were. For what it's worth, a lot of their products do not use fillers, and work really well. It wasn't until I was an adult that I realized that most laundry detergents guide you to use more than a couple tablespoons per load; Amways were always very concentrated, and their 'scoop' is about 1/4 the size of most laundry detergent scoops.

She never turned into an Amway zombie. She mainly distributed it because she wanted to use it. She mostly just sold it to family members who also wanted it.

I'm not attempting to say that it's not a weirdo cult; it is. But it's a weirdo cult with good products.
Old 10-10-2002, 02:52 PM
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Avon stuff is NICE, actually, and they have beautiful jewelry. My grandmother has gotten me a few Avon necklaces that are gorgeous.
Old 10-10-2002, 03:02 PM
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It used to be that one was invited to a party, only to find out it was an Amway presentation. The deception was rationalized as being necessary to get around people having decided they weren't interested in Amway when they hadn't even heard all the info about it. Of course, such practices made more people even more set against Amway. This approach wasn't necessarily promoted by Amway itself, but it was quite common among its distributors.

Futhermore, as noted above, distributors for Amway and some of the other MLM companies tend to concentrate on recruiting rather than on retail sales. The compensation plans offer huge potential earnings for those who have a large thriving network of distributors under their recruitment. Simply selling the product is not very lucrative. The problem here is that the ultimate source of all income is product sales (although some distributors seem to make a fair amount by selling sales aids--motivational/instructional tapes, "how-to" booklets, etc.).

So a number of folks spent a lot of money on sales aids and "inventory" (usually more to get credit for placing a large order than to actually sell). Naturally they wanted to sign up distributors under them. A common scenario is someone sinking a bunch of time and money into the venture, and alienating their friends and family in the process. But without a good base of retail sales, little or no money was made. Dreams and hopes got pumped up, then dashed.

This type of stuff leaves a negative impression on many people.

In contrast, when people are invited to an Avon or Tupperware party, they know what to expect, and are not surprised with anything that fosters discomfort. And those who decide to sell it apparently mainly plan to actually sell the product. It seems to be generally promoted as a way to make something extra on the side. Few or no unrealistic expectations, and no heartbreak. Leaves a much better taste in one's mouth.
Old 10-10-2002, 06:19 PM
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One very big difference- Amway seems to sell the concept of recruiting more distributors, and earning money off their sales and those of the distributors they recruited and so on in a big pyramid until numerous people are earning a commission on a box of detergent, without cutting the commission of the original seller. Avon,at least when I sold it, didn't. If multiple people earned commissions on an Avon sale, it went the other way around. If I, as a salesperson earned a 10% commission, I might give 5% of it to a hairstylist who kept the book in the shop and took orders. But that still leave the total commission at 10%. And while there may have been a bonus of some sort for signing up a representative, I didn't receive permanent commissions on all of that persons sales and those of any representatives she might sign up.
Old 10-10-2002, 10:41 PM
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Amway sells just about EVERYTHING, and demands reps make their home 100% amway, or so the book "THE CULT OF FREE ENTERPRISE" says.

Funny story: Rep buys into Amway. Doesn't like the Toothpaste. Decides to make the home 100% amway, except for crest.

His "Sponsor" visits. Asks about the tootpaste, he says he doesn't like the taste.

Phone rings.

Comes back, the sponsor is writing "I LOVE AMWAY TOOTHPASTE" with the CREST on the guys Bathroom mirror.

Fascinating book.
Old 10-11-2002, 01:11 AM
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Ok, brace yourself, I'm going to defend Amway.

I had occasion to meet a few times with middle level Amway managers about customer service issues. I found to my considerable surprise, they were highly professional, honest, and caring about their customers. The Amway company is such a good alternate marketing channel that they turn away most companies that want Amway to represent them. They select the products they feel are best, ignore the others, and take pride in what they sell.

Now . . . I'm sure the other people posting above have legitimate concerns. My only contact with Amway before had been limited, but negative.

One difference between Herbalife and Amway, an Herbalife acquaintance explained to me last week at a party, is that your career progress at Herbalife isn't limited by how high your boss climbs. The Herbalife rep -- who I've known for some years -- seemed genuinely pleased that her job was helping people (as opposed to the ISP we used to belong to).

So I guess those companies aren't all bad?
Old 10-11-2002, 03:35 AM
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I'm impressed with most of the Amway products that I've tried, but my supplier wanted me to be a distributor and couldn't really accept my firm (but very polite) negative answer. I have trouble obtaining the products now because the distributor who tried to 'convert' me seems to avoid me.

My parents got deeply into the whole thing (and were always talking about 'going diamond') back in the eighties; I'm convinced that the pressure of it was a contributory factor to their divorce.

Amway is a religion, I realise how unreasonable that sounds, but it has many similar attributes; you are encouraged to extol the virtues of the product at every opportunity, you are expected to win converts, you are promised shiny rewards in the future if you remain faithful.
Old 10-11-2002, 12:19 PM
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So I guess those companies aren't all bad?

No, many of the companies are basically OK. In a lot of cases, it's the distributors' attitudes and practices that generate problems. However, the companies are often set up in such a way that they atrract that type of distributor, and they seldom do anything to prevent or even discourage most of the behavior that many people find distasteful.

I think a lot of it boils down to this: a small percentage of folks have the gift of really working MLM pay systems and making big bucks. They then try to get all of their recruits to do as they did, ignoring the fact that 99% of the population does not have what it takes to do likewise. Often intense pressure is applied on new distributors to do things they don't feel comfortable doing and to not do things that would come naturally to them. A recipe for disappointment, and sometimes disaster.
Old 10-12-2002, 07:40 PM
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has the amway organization recruiting technique changed? it used to be someone says to you "i'm looking at an opportunity to own my own business and make x bucks within 2 years" you go to one, sign up, catch on, drop out. 5 months later someone says to you "i'm looking at an opportunity to own my own business and make x bucks within 2 years" you say "amway?" they say yes....you tell them that your experience with them was bad...they say"it was probably the group manager(or whatever)" you ought to meet mine! he's really different!" he's not. . i asked one (the fourth or fifth recruiter who had persecuted me) before the presentation if it was amway. he said"amway? what's that?" i swallowed it, and at the end of his presentation he said "do you want to know the name of my company? amway!" things like this give all mlm a bad name.
Old 10-13-2002, 04:25 PM
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I would suggest this response to anyone who experiences the type of deceit handsomeharry describes (denying it's Amway when it actually is): At the moment the falsehood is revealed, stand up and loudly ask, "Why did you tell me it was not Amway? Do you lie to everyone about that? Is everything else you've told us a lie also? Is there any reason anyone would want to have business relationship with someone who's going to lie to them?" etc.

Be loud, be heard. Don't let them squirm out of it, pin them down. Repeat the fact that they lied, and if they try to downplay it, point out with vigor that they don't seem to have any conscience about lying.
Old 10-13-2002, 06:11 PM
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I spent a very uncomfortable afternoon with an acquaintance last year. I'd asked him for help with my divorce (he's a lawyer), got five minutes' worth of advice on the divorce (which turned out to be bad advice; thank God I didn't take it) and another half hour on the joy of Quixtar, an Amway-like outfit. He tried to persuade me to get my company to switch to Quixtar for their office supplies so I (and he) could see a little profit on the side. He seemed a bit crestfallen when I told him I worked for a hospital that didn't allow its employees to have side businesses.

I wonder if the state bar frowns on this kind of activity?

Robin
Old 10-13-2002, 06:45 PM
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In my experience, it's not really accurate to classify Avon as a truly MLM business. Its business model is very different from Tupperware, Partylite, Pampered Chef, etc. and those are fairly well separated from Amway and Herbalife.

I say this only because as an Avon rep, it is completely possible to earn tens of thousands of dollars a year or more with nary a "downline" or subordinate recruit beneath you. Recruiting new representatives is not a focus, there is no requirement that you attend any kinds of meetings whatsoever after your initial "buy-in" consultation, and the only pressure from "above" is to make sure that your orders are turned in on time and to occasionally take part in promotional projects when new products are launched.

That sounded like a sales pitch, but that's my observation as the daughter of a 30+ year Avon rep. Oh, and also as someone who has sold Tupperware and Mary Kay and has been pitched hard for Partylite, Home Interiors and Pampered Chef by former friends.

Btw, MsRobyn, Quixtar is an Amway subsidiary/co-venture company. Same pitch, same sleaze, different name.
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Old 10-14-2002, 12:45 AM
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OK. Let me summarize what I've read:

1) Amway/Herbalife: Bad, because they use underhanded tactics to draw in people to sell the products, and most of the revenue is derived from "distributors" buying in to the company, rather than from products sold to non-distributors

2) The others I mentioned: Good (or at least Neutral), because the majority of the companies revenue derives from sales of goods to other people, without requirements to become distributors, and those distributors aren't under any pressure to get any downline distributors underneath them.

now tlw, how is Avon's business model different from Mary Kay or Pampered Chef or one of the others you've mentioned (which I've never heard of )?
Old 10-14-2002, 12:47 AM
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Re: Avon:

One Retired lady I know did very well on an Avon route to all the local office buildings with women working in them.

Even though "canvassers" were not allowed in many of them, she, a woman who looked like everyones gramma slipped right by.
Old 10-15-2002, 10:03 PM
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I know I will be down trodden for this, but, I am a Quixtar distributor. Amway as a company only makes products now. and everything must be done thru Quixtar. I don't push anyone to become a distributor. I am in this for the products for myself. If any one else wants products thru me, they must ask me. I do not give a joining pitch. None of my friends or coworkers know what I do, unless they ask me a direct question. I direct them to a website with my pin # and will never even pay attention to what or if they buy anything. I use the products because I am allergic to almost every other laundry and bath product made. Just to keep the record straight I do not buy Amway Toothpaste, I am allergic to that too.
Old 10-15-2002, 11:35 PM
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SamIAm... I hope you get out before it's too late.
Old 10-15-2002, 11:46 PM
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I also notice that you didn't register until -after- this thread started, and I hardly suspect that a current Quixtar/Amway distributor would be considered impartial. Don't lose your shirt. It would suck.
Old 10-16-2002, 03:44 AM
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Funny story about the Amway mystique:

My husband asked a traveling engineer working at his company for a few months to come with his wife to our house for a home-cooked meal. The guy didn't seem to want to, but finally came. Dinner went well, until post-dessert, when my husband asked, "Would you like to see my small on-the-side business?" and the couple stiffened. Hubby wondered what was so terrible about the novelty wall-clocks he was making (didn't work out), when the couple burst into laughter.

Seems they had suspected Amway when he first invited them over, then had relaxed during dinner, only to be poleaxed by the Amway pitch--which wasn't!

A friend of mine had gotten heavily into the Amway thing, which stopped our association cold for nearly 10 years. The pressure to join up is just unbearable. My Avon pals, Pampered Chef buddies, and other "home party" types ask you to buy something once or twice a year, and take a polite "no" for an answer. The Amway folks tend to give you an endless spiel every time you see them.
Old 10-16-2002, 10:14 PM
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I have seen the other side of this. I refuse to be a part of it.
What I do is kind of like joining sams club to get discounts. thats it. thats all I do.
Old 10-16-2002, 10:51 PM
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MLM? I don't know the secret handshake. What's MLM?
Old 10-16-2002, 11:44 PM
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Multi-level marketing, also called network marketing, wherein a portion of one's income is based on sales by those one has recruited, and by those they have recruited, etc.
Old 10-17-2002, 08:18 AM
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I gather the difference between a legal MLM and an illegal pyramid scheme is that the MLM remains legal because some significant percentage of the "franchise owner's" earnings is somehow based on the distribution of products vice the recruitment of new sub-franchisees. Is this correct?

Also: Am I correct here when I read Quixtar to be in essence a rechristened Amway? Sam says "Amway as a company only makes products now. and everything must be done thru Quixtar."
Old 10-17-2002, 09:25 AM
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Quote:
Originally posted by Milton De La Warre
Also: Am I correct here when I read Quixtar to be in essence a rechristened Amway? Sam says "Amway as a company only makes products now. and everything must be done thru Quixtar."
Alticor is the parent company of Amway and Quixtar.

More info in previous threads about Amway:

Amway is no longer Amway!

Amway

Is Amway a pyramid scheme or just a legal MLM?

Pyramid Schemes
Old 10-17-2002, 09:36 AM
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I gather the difference between a legal MLM and an illegal pyramid scheme is that the MLM remains legal because some significant percentage of the "franchise owner's" earnings is somehow based on the distribution of products vice the recruitment of new sub-franchisees. Is this correct?

Yes, that's my understanding. In a pyramid (Ponzi) scheme, admission fees from new members, sometimes quite hefty, are the sole source of income, and membership (with the hope of getting money from newer members) is the sole "product." Some of these set-ups try to get around this by including a booklet or some such and claiming that they're selling information, but that's usually very transparent.

In MLM, virtually all of the income is generated by product sales. People in upper levels get a percentage of the sales of those below them in the recruitment pattern. There are usually modest enrolment fees which seem justifiable to cover admistrative expenses; these go straight to the company, not to other distributors.

It's generally not hard to tell the difference with a minimum of research and evaluation, but some states take a very rigid and narrow approach and are hard on MLM companies. I understand, though, that Amway has won some court cases over the years, showing that it is not a Ponzi scheme.
Old 10-17-2002, 10:10 AM
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Quote:
Originally posted by partly_warmer
The Herbalife rep -- who I've known for some years -- seemed genuinely pleased that her job was helping people (as opposed to the ISP we used to belong to).

So I guess those companies aren't all bad?
Yeah, if you consider selling people ephedra to lose weight "helping them". Hey, have you guys heard about the cocaine diet? Sign up for "cocalife" now, and recruit your friends!
Old 10-17-2002, 01:12 PM
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Several people that I've been acquainted with over the years have tried to pitch Mr. Winnie and I some kind of Amway-related thing. When we said no, they either figured out shortly that they were not going to make millions off of it and got out soon, kind of sheepishly laughing at themselves, or got sucked in hard and we've never heard from them again.

The worst feeling is having a pleasant conversation with someone then getting the "I'm having a dinner party at my home on Saturday and a friend of mine will be giving a 50-minute presentation on a small business venture that I'm exploring, will you come?" Before they've even finished the sentence you know what's going on and are trying to figure out how to weasle out of it. A private music instructor of mine recently got herself involved, tried to pitch it to me heavily, and once I gave a final "absolutely not, but I wish you the best of luck and hope to hear how you're doing with it" I never heard from her again, and don't expect to. The "mentors" really encourage their 'downlines' to not associate themselves with people who are not pro-Amway.

On the other hand, every Avon, Tupperware, Longenberger, etc. party I've ever been to has been very, very pleasant and the rep will simply part by saying "and if anyone is ever interested in hosting a party of their own I'll leave my business card on the table. Have a nice day." Makes it a lot easier to buy a little something to just help them out (except those overpriced baskets... I just can't bring myself to fork out $40 for a tiny little basket for my keys).
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