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Amway Forever: The Amazing Story of a Global Business Phenomenon by Kathryn A. Jones

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Building into the Future

In that long-term vision, Amway’s success depends not only on continuing to woo more people to become IBOs and appealing more directly to consumers, but also on its reputation. Its multimillion-dollar mainstream media advertising campaign is designed more to project a positive image than push a particular product line. The negative that continues to haunt the company, despite the landmark 1979 Federal Trade Commission (FTC) ruling, is whether Amway really is more about making money through recruitment and tools. By its own admission, Amway is structured like a pyramid—so are most corporations and governments. The word scheme means “a plan or program of action,” but Merriam-Webster’s definition adds, “especially a crafty or secret one.”2 The FTC has decided Amway is not an illegal pyramid scheme, but is it an ethical pyramid-shaped selling configuration?

In a June 2009 report and memorandum to President Barack Obama and members of Congress who oversee the FTC, Robert L. FitzPatrick, longtime Amway critic and president of Pyramid Scheme Alert, called the multilevel marketing (MLM) business the “Main Street Bubble.”3 Ponzi schemes such as Bernard Madoff’s hedge fund collapse completely and all at once, but the Main Street Bubble collapses continuously, FitzPatrick asserts, because of the “failures”—participants who quit the MLM and stop buying the products. In a study of 10 major MLMs, including Amway, Pyramid Scheme Alert found that about 60 to 90 percent ...

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