By Lynda C. Corpuz
Amway, a direct-selling company founded in 1959 by Rich DeVos and Jay Van Andel, proved to be a good proposition to those who want a business of their own. But no matter how established, what with its presence around the globe and the success stories it chronicles throughout its 50-year existence, it also took a beating from the pyramiding scams in the 90s that hounded the Philippine direct-selling and legitimate multilevel marketing (MLM) industry.
To fight this, Amway partnered with the Department of Trade and Industry (DTI) in producing a brochure warning the public about pyramiding – those illegal schemes that generate income mainly from recruiting members or agents rather than from selling products or services.
And if you intend to join any direct-selling or MLM group and be like Amway IBOs Mar and Babes Tero, here’s a quick guide to differentiating a legal MLM versus a pyramiding scam:
• It may be an illegal pyramid if it proposes commissions for recruiting additional distributors.
• A MLM may be fake if you are asked to purchase expensive inventory.
• Continuing to grow your down line (the commissions on sales made by new distributors you recruit) is not the way to earn in a MLM. True MLM plans make money out of sales you made yourself.
• Ask for hard evidence for any plan which claims to sell miracle products or promise big income in an instant.
• Take note of decoy references paid by a plan’s promoter to make people believe about their fictional success.
• Do not sign any contract in an opportunity meeting or any high-pressure situation staged by a MLM. Rather, insist that you will carefully think first about joining.
• It pays to do your homework so check with the Securities and Exchange Commission and the DTI about any MLM you are considering.