Amway Income Disclosure

It’s been over 4 years since we wrote our orignial review of the Amway Business Opportunity. We decided it was time to check in again and take a closer look at the Amway Income Disclosure.

Being one of the longest running active MLMs in the world, it is no surprise that Amway has been as unforthcoming as possible with their information, while still meeting the legal requirements of an Income Disclosure.

The Full Amway Income Disclosure is shown below:

Right from the start we see that 48% of ‘Amway Business Owners’ (ABO)’s were active. While they describe being ‘active’ as trying to make sales or promote the Amway opportunity, we’re not sure this is the case. Amway doesn’t monitor whether or not their IBOs are making retail sales or putting on presentations.

The only thing they can keep track of is how much product is ordered. An earlier definition of an ‘active IBO’, is one who spends enough of Amway products each month to remain active. This is around US $100 per month.

So if 48% were ‘active’, more than half were not regularly buying Amway products. This suggests that 52% of Amway ABOs earned no commission at all.

For the 48% who did remain active for the entire year, Amway tells us that the average annual income was $2,484. They claim this includes retail commission, but we are not convinced. It’s quite likely that what they call retail commission is really just a rebate on products purchased. Even if we take their word for it, on average Amway ABOs earn less than $50 a week.

Now this doesn’t include any expenses. Keep in mind that if you are an ABO you will need to spend a lot of time and money growing ‘your business’. If we were to include these, we’d expect to find that most Amway ABOs are losing money.

Unfortunately this is all the information Amway has given us in their ‘earnings disclosure’, lucky for us, Amway is a publicly traded company, in Malaysia. So just for the fun of it, we decided to go through the 164 pages of the Amway Annual Report. We thought maybe that would tell us more about the Amway ABO opportunity.

Early on we read that ‘countless ABOs have achieved success’. Naturally this claim is at this point, unsubstantiated, but that’s just how MLMs roll. The theme continues when we read that the ABOs are an ‘expanding force’.

After a few more pages of reading, we found some interesting numbers, which explain the change in Amway ABOs over the course of a year. We took it upon ourselves to apply a little math and produced the table below:

The top section in blue is the data Amway provided in their report the rest is our calculations. We should note that Amway was proud of these results, but we’re not sure why. While the numbers speak for themselves, we’ll go ahead and give you some jibber jabber about them.

In 2019, Amway recruited a total of 123,000 new ABOs which was an increase of 48.43% of the total ABO force. While this might sound like a great result, it isn’t. Amway started in 1959, and is more than 60 years old. It seems very odd that such a large portion of their ABO force joined last year.

It starts to make more sense as the math continues… even though 123,000 new ABOs joined during the year, the total number of Amway ABOs only went up by 6,900 in 2019. So 48.43% of ABOs joined but the total only went up by 2.72% while they say it was a good year, to us, it’s not looking so great.

The only way to explain the disparity in ABO growth, is that 116,100 ABOs quit Amway in 2019. So even though ‘countless ABOs achieved success’, 45.71% of ABOs quit Amway in 2019.

What we’ve learned from the Amway documents we’ve found, is that if you become an ABO, you can expect to earn less than $50 a week before expenses, and will probably lose money.

If you are a great salesperson and build a ‘downline’, then it’s more than likely that around half of them will quit every year, so you’ll need to recruit extra hard to keep up with the churn.

If you are thinking about joining Amway, or any other MLM, we strongly suggest considering all other options before committing.

For posts like this check out our list of MLM Income Disclosure Statements. If you notice one that you think should be added to the list, let us know and we’ll do our best.