 So there's been a lot of buzz around the word MLM lately, conjuring up images of Facebook moms selling their essential oils, but all this noise made me think, how did MLMs become as big as they are? That brings me to the topic of this video, Amway. Amway was one of the first widely successful MLMs, and much of the way that they conducted their business and also involved themselves in politics kind of paved the way for the rest of the MLM world to follow. I'm telling you, the story of Amway is absolutely crazy, and I feel like more people need to know about it. So that's why I'm gonna talk about it today. Just a quick disclaimer, because I feel like it's kind of necessary, obviously a lot of this stuff is going to be my opinion, Amway don't sue me. In this video, I'm gonna be going over Amway's history, their business model, my own personal story with Amway, and their influence on politics and culture. So yeah, strap in, get some good snacks, and if you're as interested in MLMs as I am, I think this will be a really fun video. So first, let's go into the history of Amway, and hopefully this is as interesting to you as it is to me. Amway was founded in 1959 by J. Van Andel and Richard DeVos. The founders were inspired to create Amway when they were recruited into an MLM called Neutralite. What happened is under Neutralite, DeVos and Van Andel grew their distributor downline to over 5,000 people. So they're actually really successful at Neutralite, but they saw the limits of that business. They only sold nutrition products, not everyone was interested in it, and they thought, what if we took this model and had more products that everyone could buy and use? And so they basically created Amway and then used their 5,000 distributors that they already had through Neutralite to just distribute Amway products. So it's like starting a business and already having 5,000 customers, it's definitely going to work. Amway is still thriving today and they sell mainly health, beauty, and home care products. Their motto is selling things that everyone can use every day and that everyone basically does use in their home. Amway reported sales of 8.8 billion in 2018 and conducts business through a number of various countries and territories. Eventually, Amway grew so big that they bought out Neutralite, the MLM that the founders joined in the first place and they used Neutralite as a distribution leeway for their products. So what is the Amway business model? Amway combines direct selling with a multi-level marketing strategy. Amway distributors are referred to as independent business owners. Independent business owners can market products directly to potential customers and may also sponsor and mentor other people to become independent business owners. Pay attention to the word mentor because that's a very important phrase when it comes to Amway's recruitment process. Amway has extremely overpriced home products. That's how they're able to pay all of their upline and the top people in their pyramid is by overpricing and having these huge margins of profit. Amway distributors are taught to purchase all of their home care products from Amway themselves and they're told that this is like purchasing from their own business when in fact they're not really profiting off of it and it's still more expensive even with the distributor discount than the home care products would be anywhere else. To further profit off of distributors buying their home care products from Amway, Amway created a system called Ditto Delivery. Ditto Delivery is a monthly replenishment program that fills orders based on customers predetermined needs. Ditto Delivery accounts for 30% of Northern American sales. What I personally believe is happening through Ditto Delivery is distributors are taught to purchase from their own company, Amway, and so they purchase all their home goods through Ditto Delivery, it automatically replenishes and charges them every month for home care needs. But if you put that into perspective, as we said in 2018, $8.8 billion is what Amway made. So think of 30% of that which is what comes from Ditto Delivery and you can imagine just how much the distributors themselves are giving to Amway. Do these independent business owners see a profit even remotely close to $8.8 billion? Not at all. That's why I personally believe that this is a disgusting business practice to encourage distributors who are supposed to be making money from you as a company and selling your products to be purchasing your products themselves and that's how you make the majority of your money is a little bit gross and unethical. Funny enough, I've had a run-in with Amway Recruiters myself and I thought that I'd share with you guys this experience just so you can see how Amway Recruiters work, how independent business owners, you know, try and recruit others into their downline. So I ran into Amway Recruiters when I was in my hometown at a local animal nursery. It was like in a, you know, very family oriented part of town and it was this couple with their young baby. They came up to me and just randomly started talking to me. They were incredibly nice but also really strangely inquisitive into my life. I didn't think much of it at the time except for just kind of that it was a little weird how nosy this like random couple was but they would ask me things like where my clothes were from, where I worked, where I went to school, all that kind of stuff but since they were, you know, with their child at a really family oriented place I just thought of them as really friendly like neighborly like people. They started talking about how successful they were in their business. They told me that they see something in me where they think I could be successful too and at the time I was just freshly in college. I think I was 18. I really wanted to be successful. I had a lot of ambition and thought it was really cool that this, you know, seemingly successful young couple saw that in me and wanted to mentor me. So they invited me out for coffee and while usually strangers inviting you out for coffee would feel weird and awkward, they seemed so nice and normal that I didn't really think much of it. When I went out for coffee with them, they started talking about some really strange concepts to me. They mentioned the Rich Man Poor Man book by Guy Kosaki, which I thought was like a business book they were recommending to me. They talked about their friends who were 24 years old, who were multimillionaires and have already retired and were their own mentors. They talked about how what they do is basically own a ton of different businesses and then purchase their own goods from their own businesses instead of buying from outside businesses like Walmart or Target. Being young and fresh in college, not really understanding much about business, but having an interest in it, I thought that they were genuinely sharing with me some new way to make money. I noticed that they were really pushy and they kept wanting me to come to this one seminar and come to this thing with them. I ended up having this gut feeling that something wasn't right and that they weren't maybe as successful as they claimed they were or maybe wanted something from me. So I went home and I looked up the book Rich Man Poor Man by Guy Kosaki. I did some research into who these people are and what they're trying to tell me because they wouldn't even say that their company was AMLE. They wouldn't say what they worked for or what they were doing. They just kind of kept everything really vague. And when I did research, I ended up finding out that they were AMLE recruiters and that's what they were trying to get me to do. Go to this seminar that would sell me on becoming an AMLE independent business owner myself. Of course, any time you go up and look up AMLE or any other MLM, you come across thousands of horror stories. And so luckily I wasn't completely sold yet on the whole concept and I backed out and told them I'm sorry, but I'm not interested. The creepy thing is that the couple was so aggressive at that point that I remember just happening to run into the wife at my place of work, which was really creepy because I told her where I worked. That's just creepy and pushing the boundaries of super inappropriate to find out where someone works that you're trying to recruit into your MLM and then show up at their workplace. Like, no. Now this is where it gets even weirder. So AMLE and its founders, especially the DeBoss family, is very involved in politics, which I believe personally is a big reason why they were able to be so successful and have such little regulations on the company, which in turn allowed other MLMs to have little regulations as well. So these are going to be a lot of factoids that I'm about to say, but bear with me because it adds up to a really, really strange, bigger picture. In the 1990s, AMLE was a major contributor to the Republican Party and to the election campaign of various GOP candidates. In October of 1994, AMLE gave the biggest corporate contribution recorded to that day for a single election. They gave $2.5 million to the Republican National Committee and was the number one corporate political donor in the US during the 2004 election cycle. The organization contributed $4 million to the conservative group Progress for America as well. So that's a lot of money, even just in that statement. That's $6.5 million that AMLE has donated over the course of a few years to the Republican Party. You have to be wondering why they donated so much money to politics and how that maybe benefited them in the long run. Here are some other factors pertaining to money, politics, and the DeBoss family that kind of ties in with AMLE and how they were able to further their business politically. In 1996, in July, AMLE co-founder Richard DeBoss was honored at a $3 million fundraiser for the Republican Party. In April 1997, Richard and Helen DeBoss gave $1 million to the RNC, which was the second biggest soft-money donation ever, apart from AMLE's first donation. So they personally, as a family, gave $1 million to the Republican Party. I can't even imagine having $1 million, let alone donating it. I mean, people that usually have that much money, they don't donate to something just out of the kindness of their heart. Like, let's be real, usually it's because they have something to gain from that. If you're like me, you're probably wondering if these contributions had an effect on helping AMLE steer clear of the FTC and harsher regulations for its shady practices. In July of 1997, Senate Majority Leader Trent Lott and House Speaker Newt Gringrich slipped a last-minute provision into a tax bill that granted AMLE a tax break on Asian branches that totalled $19 million, way more than their contributions to the Republican Party. So AMLE and its founders have contributed maybe $8 million to the Republican Party, and you can see, in turn, in 1997, around the same year that that much money was donated, they were granted $19 million in a tax break. That's a huge win for AMLE and a huge amount of money to, you know, not have to pay in taxes. It's insane. Not only did AMLE get some major benefits from being in bed with the Republican Party, but much of the DeVos family became a part of politics as well. Dick DeVos, some way of AMLE founder, did I? Was that English? Dick DeVos, son of AMLE founder Richard DeVos, served as finance chairman of the Republican National Committee, and his wife Betsy DeVos served as chair of Michigan Republican Party throughout 1996 to 2005. On February 7th of 2017, Betsy DeVos was confirmed by the Senate as the 11th Secretary of Education. This means that Betsy DeVos, part of the AMLE family, is largely in charge of the U.S.'s education, and she has very close ties to AMLE and MLM, with so much money poured from AMLE into politics. And the owners and their descendants working in politics, it makes a lot of sense why the government has not further regulated or cracked down on unethical MLM practices. So let's talk about AMLE's different run-ins with the law. AMLE co-founder Jay Van Andel in 1980 and later son Steve Van Andel in 2001 were elected by the board of directors of the United States Chamber of Commerce to be the chairman of the private American lobbying organization. And as we know, lobbying has a huge play in politics and rules past, and it's a big downfall of democracy, in my opinion, where corporations and people with lots of money are able to influence politicians. In 1979, the Federal Trade Commission found AMLE to not fit the definition of a pyramid scheme because A, distributors weren't paid to recruit people. B, it did not require distributors to buy a large stock of unmoving inventory. C, distributors were required to maintain sales. And D, the company and distributors were required to accept returns of inventory from down-level distributors. As you can see, these rules are what modern MLMs use today to avoid being labeled a pyramid scheme as well. The FTC did find AMLE guilty of price fixing and making exaggerated income claims, which in my opinion, they 100% still do today, considering that the people that tried to recruit me into AMLE were claiming that their friends retired at the age of 24 and were multi-millionaires. It's just statistically pretty impossible, that's a fact. On November 3rd of 2010, AMLE agreed to pay $56 million to settle a class action that had been filed in Federal District Court in LA in 2007. But that hasn't stopped the AMLE founders from doing a lot to lobby for deregulation of AMLE and similar MLM schemes. The divosses supported an amendment to the U.S. House of Representatives, Omnibus Financial Services and General Government Appropriations Bill in 2018, so that's only a year ago or almost two years ago, that would have limited the ability of the FTC to investigate whether MLMs are pyramid schemes. Imagine that. If the FTC, the Federal Trade Commission, couldn't even regulate or look into whether an MLM was a pyramid scheme. Imagine how many people would get screwed over by that. It's just ridiculous. It also adopted provisions from the so-called Anti-Pyramid Scheme Promotion Act of 2016, which would blur lines from MLM activity and pyramid schemes. Thank God the amendment was opposed by a coalition of consumer interest groups. So you look at a family like the Divoss family, which is involved in AMLE as a company in politics, and you can understand why they're only interested in passing bills that benefits their company and not the interests of American citizens. I know that these are a lot of boring facts all at once, but the bigger picture is not pretty. And all of these laws and regulations have allowed AMLE to financially take advantage of real innocent people. Studies of independent consumer watchdog agencies have shown that between 990 and 999 of 1,000 participants that use AMLE-type pay plans lose money. That means that 99 to 99.9% of people lose money. How do people justify these business practices or not realize that they're being played a fool? AMLE distributors have been accused of using cult-like practices to attract new distributors and keep them committed. Seminars and rallies resemble religious revival meetings, with enormous involvement of distributors despite their minimal income. With mention of these rallies, I can't help but think of modern MLMs and the events and rallies that they hold as well. We've all seen the Arabon White Party or whatever that is, and the Lulu Roe event that have happened. AMLE is very tied in with Christian ideology and is spread mainly through churches. In fact, the people that I met that were AMLE distributors found out about AMLE in their church. AMLE preaches the gospel of prosperity, but even though most people lose money, they stay in AMLE because of the social connections that are deeply woven into the system, much like a cult would say. Think about it. Since most MLMs tell you to go after friends and family, you either lose touch with friends and family or they join you in the MLM. All of a sudden, if you walk away, you're walking away from your church friends, people you associate with, and your friends and family who joined you, and you don't have many others to turn to since you've turned them all away. This is a recruiting practice replicated by almost every MLM to follow AMLE. With no major legal or social repercussions, MLMs are an easy way for greedy and unethical people to get rich quick. And it really seems like AMLE was a major player who paved the way and helped legally allow others to do the same. So that's the history of AMLE. I am super interested in MLMs and how they work and the history behind them, what led them to be where they are today. And I would love to do more videos like this going into other MLM companies. So if you want to see more MLM history videos and in-depth analyses of different MLM companies, give this video a thumbs up, subscribe, and I'd love to make that for you guys. Have a good day. Bye.