Beware this get-rich-quick scheme My Money, South Africa/January 6, 2008

Question:I was approached by a company called Network 21 to become a business partner and sell Amway products. I felt extremely uncomfortable during the presentation and got a nasty reply when I rejected the offer. What is the deal with this company?

Answer: Amway has been around for more than 50 years, and in this time it appears that the nature of the business has changed from selling household products to selling motivational books and tapes on how to make it in network marketing!

Amway responds: This is not correct. Distributors only earn profit on the retail sales of products they purchase at distributor cost. They also earn bonuses based on these sales and the sales of those they sponsor and train. Distributor leaders are successful leaders and managers of large businesses.

It's their job to train and motivate their sales force, however Amway rules stipulate that participation must be voluntary and all business materials should be covered by a reasonable buy-back policy. Books, tapes and meetings can be effective training and motivation tools for encouraging a large sales force to sell products and build business.

There are thousands of people out there valiantly trying to recruit underlings to market their products. From what I can gather, the product is not that important; instead it's how many people you get in your 'down line' so you can earn a commission off their sales.

Amway responds: This statement is devoid of truth. Amway offers a business opportunity that is both easy to enter and easy to leave. With a low up-front investment in a business kit and no minimum inventory requirements, Amway provides maximum flexibility to those who wish to simply try this business out or do it for a limited time. Income is derived from one's own sale of products to others and also from sales of other distributors in your business group.

No money is earned until a product is sold. Amway's leading brands include Nutrilite and Artistry. Nutrilite is the world's leading brand of vitamins, minerals and dietary supplements (based on 2004 sales) and it is the only global vitamin and mineral brand to grow, harvest and process plants on Amway's own certified organic farms.

Its beauty brand, Artistry has become a global leader in prestige beauty and has sets standards in skin science and research. It is the only direct-sell brand classified in the prestige category with over $1-billion in annual sales. These brands could not reach international sales volumes if the claim of "the product is not important" was correct.

To be honest, I find my attention drifting every time I listen to an explanation of how the up lines, down lines and sidelines work. And I further confess to not really getting it. What I do know, however, is that if you have a network marketer in your social circle they can clear a room quicker than a nervous skunk.

Putting off your friends

Can you make money out of doing this? Absolutely. Is it easy money? Absolutely not. Firstly, when you finally run out of family and friends to sell the product to, it becomes difficult to find new clients that are too polite to tell you to get lost. This is why you need to earn off the people in your down line (or is it up-line). But if they are not also hard-core salespeople it all becomes very hard work.

If you are going the get-rich-quick from network marketing, it is by no means a part-time dabble. You have to be a total zealot, and sell, sell, sell in order to make money from it. So if you have the drive of a workaholic, the skin of an elephant and the faith of the converted you should do reasonably well.

Amway responds: Multi-level marketing (MLM) is not a get rich quick scheme, but a successful way to managing your own business. With MLM one benefits from your personal product purchases as well as from the sales of persons sponsored into the business and it facilitates personal growth through building an organisation of people who sell products.

However if you are meek, faint-hearted and you really like your friends, don't give up your day job. You were probably dealing with one of the more 'eager' members of the team. There is even a website which serves as a forum for people who tried and failed to make a success of multi-level marketing. It's called — and it makes for interesting reading.

Amway doesn't deliver

Question: With reference to an article about Network 21 (Amway), is this a pyramid scheme? I have friends who have gone big into this 'cult'. I have researched the sites and and it seems little is known about Network 21 in South Africa. I would appreciate any info you could give me.

Answer: Amway has been unhappy with what I have said about them in the past, but I have not seen any evidence contradicting my opinion.

Amway is a 'network marketing company' that started in the USA. They sell legitimate products and are therefore not a pyramid scheme. When they started out in SA they were called 'Amway', but have changed their name to Network 21 and now make more use of the internet to sell their concept. They're all about hype and anyone who has been to one of their presentations will tell you that they focus far more on getting you up and running as a recruiter than on the actual products.

They have scores of books and CDs that they sell you on how to become a marketer and tell you that you will make gazillions of Rands and be able to retire with a yacht in no time. This is where I believe they are not being totally truthful.

Network marketing is not for sissies and very few individuals succeed in the long term. Diehard sales people are the ones who make money, but they would make it in a sales job anywhere. It's hard work and not a get rich quick scheme. The products are expensive and it requires you to recruit people under you to sell. In the end they make their money from books, CDs and the starter packs of products that they sell to new recruits. If you do a Google search on 'Amway cult' or 'Network 21 cult' you will see that there is a rising tide of complaints about this organisation. There are also entire books dedicated to the subject.

Network marketing: My misgivings

In a follow up to my recent comment on Amway, and the concept of Network marketing it would seem that some Amway conscripts and managers got a little hot under the collar. So here is clarification of my position and why I have misgivings about, not just Amway, but network marketing in general.

My boyfriend was contacted by a business associate and invited to attend a presentation that would make him "fabulously wealthy for doing very little work", and I went along. No mention was made that this was an Amway presentation — during and after a one hour presentation that was the most boring and pointless diatribe that I have ever had to endure.

Moreover, no product or company was mentioned in the entire hour. Except though, the importance of buying some CDs and books was foisted on us with regular monotony.

'Idea of becoming wealthy'

After the presentation we were approached by a man who asked us what we thought of the "idea of becoming wealthy". I asked him whether he was with Amway. "Er, Network 21", he said. He did however admit that they sell Amway products.

This to me - and I told him as much - comes down to underhand tactics, by not telling people that it's an Amway presentation. The reason they do this is because anyone who is old enough to sign a contract has been solicited by an Amway convert, so given the choice most people would rather stay at home and cut their toe nails.

If you do a search on the internet you will see that there are scores of articles and books on the subject of Amway, some go as far as calling it a cult. I found three books written about the organisation from ex-high ranking members, and the blurbs made for interesting reading.

'24-7 work'

On Ruth Carter's book, 'Smoke and Mirrors', critics write: "Ruth Carter has written a clear, concise account based on her 15 years of experience as a distributor and five years of insider information as the employee of a Diamond. The book attacks head-on the accusations of deception, cultism, and greed which are so often leveled at the Amway business."

Another reviewer wrote: "I feel compelled to send this to you after having emerged from one of the Amway motivational cults... What I discovered at this level was widespread systematic deceit of the highest order. (It was a) non stop 24-7 work week with little or no time for family and friends. I hope and pray that your book spares many of the Amway/Quixtar cultish nightmare that we have endured."

So the comments I made about Network 21 previously, came from personal experience and no matter how upset the officials at Amway get, the truth is the truth.

My comments are based on my experience and research. If there are successful Amway representatives out there that run open, ethical and professional set ups: well done, and I am sure that there are some individuals that have the mettle to make it work.

However I reiterate: it is not a get rich scheme that requires no effort on the part of the member. It is very hard work, and requires a 7/11 commitment.

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