Since it launched in 1959, Amway has been an multi-level marketing (MLM) company. The company pioneered many of the MLM strategies used by other businesses today like Rodan + Fields and Jeunesse.
According to the Federal Trade Commission, companies that "involve selling products to family and friends and recruiting other people to do the same" are considered to be MLMs. With Amway, sellers make money not only from selling Amway products directly to customers but also from recruiting other sellers to join their teams.
Though not all MLMs are illegal scams, they're often considered to be problematic because most distributors make little, if any, money, while top performers keep a disproportionate amount of the team's earnings. Since Amway is an MLM powerhouse (sales reportedly fetch over $8 billion a year, making it one of the top direct-selling businesses in the world), the number of people losing out in its scheme could be significant.
Amway's questionable business practices have caused legal issues in India and nearly got the entire company shut down in the UK. And though Amway and other MLMs are legally allowed to operate in the U.S., it's important to be well-educated on their practices before working for or buying from these companies.
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