The government tries to shut Amway down

It has been reported in the Times that the Government is taking Amway to court over its business practices.

I can't say I'm particularly surprised.

When representatives of Amway try to sign you up, they don't say a word about their products. Their sales spiel is all about "network marketing" and achieving your dream of financial independence: It works something like this. You build a network of sales people to whom supply Amway's products to, and each of them builds up another network of sales people that they supply to, and eventually, you have enough networks of sales people beneath you to earn a decent commission on all the accumulated sales. Each sales person only needs monthly sales of a few hundred of pounds, as the amount of points you accumulate from all the salespeople combined can translate into thousands of pounds.

Then there are the motivational books, tapes and seminars which all cost an arm and a leg. Just occasionally, the merchandise gets a mention.

Amway UK has responded to the government's investigation by imposing a three-month moratorium on recruitment of new distributors in the UK. Not sure how all their "associates" will make their money as their whole business model relies on the recruitment of new sales people.

Supporters of Amway will say their business model works. Attend any of their seminars and you'll hear dozens of testimonials from successful distributors (why do they always play "eye of the tiger" at motivational seminars?). The problem is, it's only the top 5% who make any serious money. For all the other poor sods at the bottom, it's nothing more than a dream, and an expensive dream at that.