In 1980, as part of a suit against Amway, an investigation was undertaken by the Office of Attorney General for the State of Wisconsin, led by Assistant AG Bruce Craig. Out of approximately 20,000 distributors operating in Wisconsin, state tax returns were obtained for all of the Amway “Direct” Distributors in Wisconsin, which numbered about 200, which approximately represented the top 1% of distributors. Attached to the returns were the federal forms, which revealed a breakdown of revenue and expense information.

Though these were supposedly the top distributors in the state, with an average gross profit of about $12,500, the average net income after subtracting operating expenses for these 200 top Amway distributors was approximately minus $900. This information was reported on the nationally televised “60 Minutes” show.

It should be noted that had the costs of Amway products that were consumed or given away as gifts (but which were required to qualify for commissions and advancement in the program) been subtracted, the net losses could have been much higher.

 Mr. Craig recalled that a maximum of eight distributors may have grossed $50,000, with actual net income after expenses that might have exceeded a minimum wage for the time spent on their Amway “business” – but far below the income expected at Amway “opportunity meetings.” Less than ten distributors who operated profitably out of 20,000 total distributors who bought into the program suggests odds of about one in 2,000 – even with great effort – which is decidedly uneconomic. One can do better in Vegas!
To promote as a “business opportunity” an endless chain or pyramid selling activity that in fact leads to almost certain loss for all but the founders and primary promoters who are enriched thereby, is a misrepresentation of the facts, and can lead to the defrauding of large numbers of participants.

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