Wednesday, November 15, 2006

Amway/Quixtar: The Dirt Beneath the "Diamonds"---

The recent failed Michigan gubernatorial campaign of the politically ambitious Dick Devos brought to light a number of different things- for one, Devos is the heir to the multi-billion-dollar Alticor corporation. In TV commercials, Devos infers that he single-handedly led renovation efforts in Grand Rapids, MI—near the company’s home HQ in small-town Ada, Mich.—but even Devos’ father said he was exaggerating facts. The roots of Alticor are in the Amway corporation—Alticor being the chosen name of the company since the late 1990’s. Several scandals and lawsuits involving the organization and affiliated people date back to the early 1980’s, which—unofficially—led to the eventual change of the company name, as well as a well-funded public relations campaign. It should be pointed out that there is yet another subdivision of Amway called Quixtar (pronounced quick-star), that sells some different products from Amway proper, but is managed in much the same fashion.

Amway started off in the early 60’s as a door-to-door soap-sales operation—which is innocuous enough. But eventually the company became much, much more—in particular, from the 70’s forward, it became a prominent—if not the premier—“multi-level marketing company”—a company which, despite its much-vaunted profitability, people seemed to be less than open to talking about publicly. As a corporation (as well as individual top executives like the Devos family), Amway/Alticor have lobbied Congress, as well as having donated millions to charitable efforts over the years. In the realm of politics, their bent is clearly G.O.P. friendly, donating to various local Republican political candidates as well as to conservative ‘think tanks’ and the national G.O.P. fund.

Several feel-good TV commercials aired spotlighting Amway employees who work in company-owned factories, warehouses and offices. Of course, these blue-and-white-collar workers earn a regular check from the Amway Corporation, plus whatever their benefits package offers. On the other hand, for those people who don’t actually work at an Amway/Quixtar factory or office and instead are individual Amway-product distributors, “income” works a different way, indeed. This essay will provide some insight as to how the company, and its promotional culture really work—or not, as in many cases.

First, you have to understand the lingo that is frequently used by people in the Amway marketing culture. The initials ‘A.M.O.’ stands for Amway Motivational Organization- these are the official groupings of distributors that are all connected to the Amway business, the vast majority of whom do not have an actual position with the company. Each AMO has a different name, chosen by the founder(s)—usually something dramatic, like ‘Dream Catchers’, ‘The Gold Mind’, or something. People who are recruited into Amway are always introduced to some representative of a particular A.M.O. If a person likes what they see—or they’re hounded to the point that they capitulate—then a contract is signed. A person is signed to a distributor’s contract ‘under’ another person, who in turn reports to somebody else, etc., etc., leading up to an official ‘leader’ of the AMO. It is only the ‘top’ couple of people in an A.M.O. that make any “real” money, and the vast majority are nowhere near millionaires (unless they have some type of outside investments besides selling Amway products).

High ranking people in the AMO’s are given titles based on gems- ‘pearl’, ‘ruby’, ‘emerald’, and the highest rank, ‘diamond’. Despite promotional dialogue and videos promising a millionaire’s lifestyle, the average top-earning salary among Amway “Diamond” AMO leaders is in the mid-$50,000 range, and that’s only a rare handful of people. The pitch given to recruits is that by selling Amway products—i.e., soap, food items, and other sundries, that vast quantities of sales will equal profit-participation down the road. However, the reality is that on a monthly basis, distributors are expected to buy an unending series of “motivational” cassette tapes—and to a lesser extent, videotapes and books. These items cost over $100 per set (the information is not provided on CDs, which can technically hold more information—thus making it easier to push more tapes on people). Unofficially, most of the residual-check income that Diamonds get are royalties from the collective sales of these materials and organizing rallies & conventions. It could very easily be argued that the AMO’s unstated real emphasis is on recruiting distributors rather than selling consumer products; and to ask your ‘up-line’, they’ll likely say that this is okay, within the context of “doing anything to help build the business is okay”. The harm in this is that it is illegal according to Federal Trade Commission (FTC) regulations against illegal pyramids. Any illegal business activity will cause a cave-in somewhere along the line for those involved, especially the naive and unsuspecting.

Realistically, someone who has achieved “modest” success at this business can only expect to make less than $1,000 ‘profit’ from the so-called “lucrative” royalty checks by having several active distributors signed under you. A person can work for years—over a decade, in fact—under these conditions, and still not be any closer to the “Diamond Lifestyle” that is made so attractive. From a statistical standpoint the chances are only 1 in 20,000 that a person will make it to Diamond rank (outside of any malfeasance and juggling numbers, which several former Diamonds have been exposed as doing). There are approximately one million (1,000,000) active Amway/Quixtar distributors active in a given year. The much-vaunted talk at the national conventions that “everybody” can make Diamond is ethically dubious at best and scurrilous exploitation at worst.

New distributors are also told to show the Amway Sales and Marketing Plan at least 10 times a month (preferably in a private setting, such as one’s home—so if you have kids, the idea is to get their playmates’ parents to look in on presentations). Distributors are told to attend all functions, large and small. Various regional and national associations of the AMO’s have conventions throughout the calendar year, in various parts of the country. The AMO doesn’t pick up the tab for your travel, so expect to run up big bills in airplane tickets and car rental. Those who can’t afford to fly regularly (which should be another red flag) will likely be spending money on bus tickets and filling up your own car several times as you trek hundreds of miles just to be able to buy more tapes, books and videos at the event.

New distributors are expected to buy personal items through their own distributorship. And yes, like the brochures say, Amway sells about everything from peanut butter to coffee and water-filters—but the distributor discount is only vague—only about 10%—and so you’d be just as good if you catch a good sale at K-Mart or Target. The Amway distributor must be what’s called “Core” to be considered "serious" by the people above them (their “upline”), especially the upline Diamond who heads the AMO they belong to. Distributors who are not completely "core" are generally not assisted by their upline or, as they say in AMO language, "helped". The costs of "being core" can run into several thousand dollars a year and those distributors who can't get it together to pay for it are often casualties of the AMO Squeeze and to rub salt into the wound these distributors' resulting "negativity" becomes a bother to their upline and are often eventually "left on their own" (read: not helped).

The idea that the "help" offered by upline to downline is based on altruism is ridiculous yet this is the notion championed at AMO rallies, on tapes and on Amvox phone messages. Also, Legally, the AMO’s are considered ‘independent contractors’ who are in a sales position; for any “wrongdoing” a salesperson may be accused of, the parent company (Amway/Alticor/Quixtar) can claim it had no knowledge of their practices. Of course, there is plenty of fine-print dialogue in the distributor contracts that disclaims any actual promises of short turnarounds to success, riches, etc. The people recruiting others will not point this out to their prospects, however.

Having a traditional career—even some other type of business ownership—is discouraged, and is said to simply be an “enabling function” to buy more promotional tapes, videos, and books. The real-time toll on the hours spent dedicated to “building your Amway business” is never stressed, and many people find themselves suffering in work, school, even their marriage, because of the relentless pacing and monopolization of time that being involved with an Amway AMO incurs. Quiet as it is kept, there are at least dozens of people who have either gone broke or near-broke, lost lucrative jobs, divorced, and/or become clinically depressed (among other mental illnesses) as a direct or indirect result of their relationship with an Amway AMO. Yet there are also dozens—if not thousands—more, still grinding at this “opportunity”, hoping that they’ll be living rich in a relatively short amount of time.

Another tool of recruitment (and retainment—or detainment, if you will) within the network of A.M.O.’s in the United States is a culture of religious fundamentalism, most often manifesting as ‘born-again Christianity’, but also called “Dominionists” by some religious scholars. Core among beliefs of Dominionists is the assertion that the U.S.A.—and the U.S.A. alone—is God-ordained to have ‘dominion’ over the rest of the populace of the planet. By extension of this philosophy, Americans have the God-given-duty—duty—to amass wealth, evangelize and convert as many people as possible, by whatever means. Targets for conversion don’t simply include atheists—they also include Muslims, Buddhists, Jews (including those in Israel), Episcopals, Greek Orthodox, Methodists, Roman Catholics—in short, anyone who is ‘not them’. From a purely demographic standpoint, most adherents to these beliefs tend to be Caucasian and at least moderately affluent. Among president George W. Bush’s unofficial group of advisors includes the Rev. Tim Laheigh, a prominent proponent of Domioninist theory and millionaire co-creator of a series of ‘Last Days’-themed books and other media. New distributors (typically in a one-on-one conversation) are given the pitch that they “must get right with Christ” to succeed as a top Amway distributor.

To be clear, we are not trying to say that being religious or believing in God is wrong. By no means. However, as it applies to Amway, people may be approached with vague aggression in their workplaces, malls, grocery stores, parking lots and other public places. In a brief conversation, something that is marketed as a “Christian, family-friendly business” sounds good to the average listener. However, Christians and non-Christians alike need to be warned that the so-called “religious” people who run most of the Amway AMO’s are not bringing forth the genuine Christian faith as taught and practiced throughout history, but a false, corrupted version.

(adapted from "An Anonymous Christian"'s webpage critical of Amway):
Unfortunately, if “false Christianity” doesn’t have any place among more discerning minds, it definitely has found a place with Amway Motivational Organizations. There are Internet sites where the curious can find information that indicates serious questions and doubts about the type of "Christianity" taught and practiced in Amway Motivational Organizations (AMOs). People are strongly encouraged to do their own independent research and find out for themselves.

The phenomenon of Amway and other multi-level marketing schemes (also referred to as ‘pyramid schemes’) has reached the church. Regardless of your denomination, you may be approached by a "brother" or a "sister" who will befriend you, offer you a “love bomb”, and tell you such attention-grabbing things as "you are a winner", "have you ever thought of supplementing your income", "are you unhappy at your job", "would you like to see a Christian’ business opportunity", etc. You may be told that someone is in the area increasing their business and is "looking for a few sharp individuals" to join them, however the "time to join is limited". This is a subtle pressure to stampede a panic decision by prospects.

Scare tactics and statistics will be thrown out by the "brother" or "sister" to show that a large number of those 65 and over retire and are soon "dead" or "broke". Other approaches include getting the potential recruit to talk about their financial situations, family, dreams, goals and hopes, as well as personal interests and hobbies. If the individual approached asks any questions regarding the type of business or what it is about, some vague generalities about a large number of companies using this business to distribute their products, the offer of a large number of goods and services provided, and "helping people to save money" may be stated.

You will likely not be told any clear, straightforward and up-front answers about anything. It will be kept vague while pressure is applied for the potential recruit to come to a "business meeting" where they can find out more. If the pitch is being made over the phone, the person will not tell you what it is, but will hem and haw to avoid answering any questions.

NOTE: Once the recruit signs up for this "business opportunity" these techniques will be taught to them by their sponsors and supervisors (called ‘up-lines’) in face-to-face meetings, larger meetings, rallies and functions, as well as in the tapes provided by the organization.
If the potential recruit shows any interest, they will be wooed and courted by the "brother" or "sister". They will be treated as though they are fellow Christians, shown great amounts of love, friendship, concern and support. It will appear to the potential recruit that they have found a genuine "brother" or "sister" that is "in the Lord". Should the potential recruit, or the newly signed up recruit attend any meetings or functions, they will be effusively greeted by "loving" and "caring" people who will tell them they are "winners". Yet the person has never met any of these people. As a part of this stage, the prospect or new recruit will be told that there is so much "love" that is felt and shown at these meetings and functions; the implied suggestion being that such love is not found or displayed anywhere else.

Once signed up, the recruit will be strongly encouraged to sign up for standing order tapes, and to read the books on a reading list. The books are diverse and certain popular lecturers and Christian evangelists will be mentioned: Charles Capps, Napoleon Hill, Norman Vincent Peale, and Robert Schuller. Titles of certain books include "Psycho-Cybernetics", "The Magic of Thinking Big", and "How to Win Friends and Influence People" will also be on the recommended reading list. Other authors who are not specifically on the reading list, but which may be encouraged for the recruit to read include E.W. Kenyon (an author who seemingly combined ‘new age’ teachings with the Pentecostal form of Christianity).

These books contain different techniques for bringing about "success". Terms such as "speaking it into existence" and "you get what you speak" are used. Visualization techniques such as thinking of a particular goal or item (such as a car or new house), or a specific amount of money, are encouraged. The recruit is strongly exhorted to paste pictures of such things on their refrigerator, bathroom mirrors, etc. They are also instructed to paste quotes from the different authors on the reading list in different places, and repeat these "success" and "positive thinking" quotes over in the mornings and evenings. The recruit is told to speak "positively", think "positively" and to associate only with "positive" and "right thinking" people (meaning people who are in the Amway culture).

They are told that a person becomes what they read and with whom they associate. No television, no reading of "negative" books (that is, anything that questions any of these techniques and practices), and naturally, to buy only "positive" products (all non-Amway products are considered "negative" and "heathen"). All of these different things are reinforced over and over in the audio tapes from the tape list. Further reinforcement comes from speakers at the various meetings and functions. The outwardly stated goal is to help the new recruit "become a better person", change them to "positive thinking" from "stinking thinking", and to help them become "successful", "build a big business", bring them "freedom", and be a "success".

"Success" is defined as being a "diamond", having an extremely lavish lifestyle with large houses, vacation houses, expensive cars and watches, jewelry, furs, and so on. To make this palatable, bits and pieces of Scripture will be quoted to show that "God wants you to be rich and successful" (successful, of course as defined by the sponsors and higher-up leaders of the particular Themes endlessly repeated by all is that "we don't become successful until you become successful", "you only reach your dreams when you help others build their dreams".

But are these techniques, teachings and practices compatible with Scripture? To put it another way, does God indeed want everyone to be fabulously wealthy and successful as the Amway/AMOs define success? Are people to visualize things over and over in their minds, loudly repeating quotes and goals over and over, "speak things into existence", and even get in touch with "ascended masters" to learn further "success" techniques and thinking? Are such things even in the Bible? In the history of the Church, did the great theologians and scholars of Christendom, whether Roman Catholic, Orthodox, Anglican or Protestant, ever teach that such techniques and practices were for “Christians”?

The various techniques and procedures endorsed by the Amway AMO’s (i.e., manipulate and control people for one's own goals and ends, constantly repeating different sayings or passages of Scripture over and over while ‘visualizing success’ are not in any way compatible with the historic teachings of the whole Church (whether Roman Catholic, Orthodox, Anglican, or Protestant), with the exception of what are considered to be cultish or heretical groups. People who have subscribed and submitted wholeheartedly to these philosophies may find themselves becoming more and more ‘zealous’, and exhibiting bizarre behavior. For family and friends this is particularly vexing: any kind of critique of their behavior may be, at best, dismissed out of hand, or at worst, be received as an “attack” on their “faith”, and thus “proof” that Amway is a “tool of God” that the “outside world” has chosen to oppress and criticize for no reason.

Research and study has shown that such things are deceptive those who teach such things, and utilize bits and pieces of Scripture to justify them, are spoken of in Scripture as false prophets and teachers of a false and different gospel. The “Gospel of Amway” is different from the one spoken of in the Bible, and taught over the centuries by the great scholars and theologians.

(Adapted from Seven Symptoms of Cult Behavior/Amway Culture Analysis Webpage):
Among scientists who study behavior control, there are ‘seven symptoms’ of cult syndrome that are pointed out below: A striking number of parallels to the way that the Amway AMO’s conduct themselves are pointed out.

Behavior Control

1. Major time commitment required for indoctrination sessions and group rituals According to the numbers on a particular pro-Amway website , a person should expect to spend an average of 11.38 hours a week on activities that build the business. These activities include: contacting/ prospecting new people; showing the plan (and travel time to/ from the location); listening to audio tapes; reading books; attending weekly and monthly meetings; helping the downline build their business; and listening/ passing along of telephone messages (via the Amvox network). Keep in mind that this is a very low-end average, and more hours will probably be required if a person wants to "build big". Also, keep in mind that this estimate does not include the 4 major functions per year; each taking up one entire weekend (about 72 hours or more, not including travel time). Also, a pro-Amway website-owner believes that this time-estimate is actually on the low side. He claims the time commitment is around 20 hours (or more) per week... a far cry from the "estimate" of 8 to 10 hours a week shown in the Sales & Marketing Plan.
A "disclaimer": the Amway Corporation has never given any kind of time frame for building an Amway business. Their official statement claims that people build their own business as fast or as slow as they want. It is the AMO's who have created the "8-10 hours a week" claim.

2. Need to ask permission for major decisions For a distributor to "really build the business," he should not think for himself. In fact, just the opposite is true- when he does what the upline tells him to do, "things will fall into place" (actual quotes from audio tapes) for the distributor. Numerous stories have been told by Diamonds about how they tried and tried to build the business, but nothing seemed to work. When they started "doing as they were told," their businesses started to grow.
In other speeches, distributors have told how they wanted to buy a house or car and went to their upline for advice. The upline would usually tell them to wait until they reached the next level of achievement before making a purchase. In theory, this is good advice: a person should wait until he is financially able to purchase an item before buying it. But, what happens when the person needs air conditioning for their van in the middle of a Florida summer? How long should he wait? Until he can afford it with Amway bonus checks or until someone gets sick from the heat? When the reverse situation arises, the advice is different: if a person needs to make more money, upline distributors will usually make sure that person is in attendance at the next function. Does this advice seem contradictory?
A person is struggling with their finances and they are told to spend money to go to a function? There is a possibility, that, in a few years, the person might make thousands of dollars, but what about affording this month's mortgage payment? As for right now, the upline is the only one who is making money: they profit from the sale of the function tickets. I would suppose the upline gives this advice because the they want their "tool money" before the distributor decides to quit the business due to poor results.
A submitter personally witnessed the devastating results of this faulty advice. When one of his uplines was struggling with a heavy debt load, he went to his upline Emerald for advice. Due to a second mortgage, he was forced to move his family out of their home and into an apartment. Now, there is nothing at all wrong with an apartment, but when your family (including two teenage children) have to move from a modest house to a cramped three-bedroom apartment, adjustment can be difficult. And the situation was made even worse when they had to give their daughter's dachshund to a relative since the apartment complex would not permit pets. And while he struggled with this situation, his upline Direct still tells him and his wife to attend the functions! For two people, the costs of a function can be over $500.00 (for tickets, travel, hotel, etc.). Wouldn't this money be better spent paying off some debt? Not according to the Emerald. That upline still believes he will be "going direct anytime now." He can pay off the debts then. All he has to do is "have faith in his upline's advice."
If a distributor's decision-making capacity is replaced by that of his upline's, where does that leave his children? Chances are good that the upline will tell him (and his wife) to leave the kids with a baby-sitter and go show a plan. Repeat this 6 or 7 times a week to really "build the business big." What about the kids who see their parents leaving them every night for just a promise that "one day soon" the parents will actually raise them, instead of the sitter. Will this continue for the next 3-12 months or 3-5 years or longer until the parent's Amway business is built? What do you tell the children then? On the other hand, Diamonds commonly argue, "Well, parents leave their kids all the time when they work their 9-to-5 J-O-B." And now the parents are "leaving" their children again in the evening to build an Amway business. With the pressure to be successful, and on the advice of their upline, have these parents lost their ability to choose what is in the best interest of the children?

3. Need to report thoughts, feelings and activities to superiors Distributors that are "plugged in" or "on the grow" are expected to counsel with their "upline" at least once a month. There is a strange method used in which wives are routinely used to report on their husbands' activities "for their own good". Husbands are warned not to take financial counsel re: the business from their wives because they are at the same income level....the women are advised that their husbands may have too much male ego take advice from them anyway..... the solution is for the women to call their upline and report on their husbands' activities (or lack thereof) prior to "counseling". This results in "planned spontaneity", in which the husband may feel his upline has been divinely guided because he "instinctively" seems to know his "problem". As a high level distributor, I utilized this technique frequently, thinking it was in the best interest of each couple. In retrospect, this is an incredible violation of the trust that a husband and wife share.

4. Rewards and punishments(behavior modification techniques- positive and negative) One person who submitted stated: "During the time I was a distributor, I never witnessed any forms of "punishment." I'm sure there are some groups that use punishment, but I haven't heard about it. On the other hand, rewards (and goal-setting) are used extensively. At each the monthly meetings and major functions, people are recognized for achieving the various levels in the business (1000 points, 2500 points, etc.). Distributors become motivated to "cross stage" at the next function. As a person moves higher up the "chain," the Amway Corporation begins its own form of rewards- with money. If a person reaches the "Direct" level, he is given a bonus of X dollars. If he reaches the "Emerald" level, he gets Y dollars. Note: the exact amounts vary depending on a number of factors, including how many people are in the person's group."
However, another former distributor had this to say:
"This is not readily evident to new distributors. At the leadership levels of "Direct" and "Emerald", it is used frequently. In a specific instance, my upline Diamond (who was a hero that at one point I would have taken a bullet for) became aware of the fact that I had gained some knowledge off the internet of a huge lawsuit (Diamond Direct Brig Hart's $50,000,000 lawsuit against Diamond level and above members of his upline and downline). In an Emerald meeting, my Diamond quite literally appeared to blow a gasket and described anyone that would be on the internet researching negative things about Amway as "Satan Possessed ". I was still "in" and very much loyal. At a leadership level, you cannot afford even the appearance of doubt/psychological infidelity."

5. Individualism discouraged; group think prevails Right from the start you're advised that there is no money in creativity, as the perfect "system" of success has been created. (See "No new ideas", below.) Although personal business ownership is touted, it is a farce. In the new "Quixtar" company, distributors are referred to as "IBO's (Independent Business Owners). You may work for nearly a decade developing an international business, but not have the freedom to even put a newsletter into your group or call a meeting with your leaders that is not "pre-approved".

6. Rigid rules and regulations Despite the claim of "personal choice" and "freedom," Amway distributors are bound by the rules and regulations of the Amway Corporation, by the regulations set by the AMO's, by the rules set by their upline, and by the statements in the "Business Support Materials Arbitration Agreement" (BSMAA). The "rigidity" of the rules may vary between groups.
There are four "Cardinal Rules" that you must never, never violate; they are listed below. One submitter says they have a tape in which the Diamond states that these are rules that you must follow "or you will pay". This same individual has said he would "take out" anyone that messed with his upline Diamond. He apparently is very serious and the submitter believes he would do it to prove his loyalty.
a. No new ideasCreativity is not only frowned upon, it is banished.
b. No crossliningYou cannot establish relationships or share any information with anyone not in your upline or downline. This effectively isolates any "bad" information to one group but it is further limited below.
c. Never, ever pass negativeYou do not repeat any negative information to anyone "not even your best friend in private". This is the equivalent of giving someone poison or dumping garbage in their home. The submitter who told us about this stated that "In the Moonies, I believe this informational control principle is referred to as 'the multiplication of the evils'."
d. Never, ever de-edifyYou must never say anything disrespectful or discourteous about any member of your upline regardless of their behavior . To do so would show that, perhaps, you are the problem and have an ego out of control etc.....

7. Need for obedience and dependency obedience is not explicitly stated, but subtly encouraged (a distributor to their upline; a wife to their husband, etc.); and there is also plenty of co-dependency on the uplines and others who are higher-ranked in the business for ‘guidance’.

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