09 December 2007

Amway denies operating as a closed system in the UK

"On December 1, I wrote about Amway's defense of its conduct in the United Kingdom. John Hutton, Britain's Secretary of State for Business, Enterprise, and Regulatory Reform is attempting to shut down the company's operations there, charging that Amway is essentially an endless chain scheme.

The government has demonstrated that only 10% of Amway's multi-level marketing Independent Business Owners turn a profit, while only 6% ever actually sell a product to someone outside of the organization.

This is compelling evidence that Amway is a pyramid scheme. People buy products to qualify for commissions, and the business operates as a closed system: Money is made by recruiting new distributors, not selling products. This is not different from a chain letter in any meaningful way."

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