Difference between Amway and Market America
Direct selling is one of the biggest–and most controversial–buzzwords in the business community, and Amway and Market America are two names that are right at the forefront of the fuss. What are these two companies all about–and more importantly–how do they stand with regard to legitimacy? This comparison article aims to answer these and other questions.
Profile
Amway is currently the largest direct selling company in the world. It is also involved in the manufacture of a variety of products. The company utilizes its network marketing system to sell these products, many of which are of the health, beauty, and home care varieties.
Market America for its part is a network marketing firm that is based in Greensboro, North Carolina. The company was established in 1992 by James Ridinger, who was formerly involved with Amway. The company characterizes itself as an "unfranchise" company, which basically means that it offers many of the benefits that you would get with a traditional franchise operation without the typical associated costs. Market America is also offers a variety of product brokerage services, with a focus on mass customization.
Business Model
The Amway business model is a combination of direct selling and network marketing. Its Independent Business Owners or IBOs may market the company’s products directly to their own customers, and they may sign up other potential IBOs as recruits. This would require them to train these IBOs in the ways of the business, and thereby give them the same opportunities. Amway’s IBOs earn income from either the markup they make on the products that they sell, and they may also earn a performance bonus based on the volume of products that they sell. IBOs also have the benefit of being able to purchase Amway products at discounted prices.
Market America follows the network marketing model, in which members recruit people to sign for the chance to become “unfranchise” owners themselves. Each member of Market America is required to recruit other people and to purchase 200BV worth of Market America products. This purchase entails a 50-150BV transfer per month. The growth of a team results in the accumulation of points, and after a certain number of points is reached, the members will then receive a commission.
Controversy
Among the most common criticism of Amway has to do with their alleged use of pressure tactics that many see as essentially the brainwashing of IBOs. Critics of Amway say that this is done by use of peer pressure and even threats as a means to persuade IBOs to recruit more people. To those date however, no legal claims against Amway have prospered.
Market America has had to endure its share of controversy as well, with critics claiming that the business is more about recruiting than selling.
Similarities and Differences
Amway
- Currently the largest direct selling company in the world
- Business model is a combination of direct selling and network marketing
Market America
- A network marketing firm based in Greensboro, North Carolina
- Follows the network marketing model, in which members recruit people to sign for the chance to become “unfranchise” owners
