Is Amsoil A Scam? Legit MLM or Pyramid Scheme?

So you are probably here because you came in contact with an Amsoil dealer or you were curious to see if Amsoil is the real deal or a scam.

The moment I hear about recruiting people to make money my mind immediately goes towards those same thoughts.

Luckily, for the last 3 years, I have been reviewing make-money opportunities just like Amsoil and have become really good at spotting make money online scams.

After reading this post, you’ll know exactly if this is that once-in-a-lifetime opportunity or run for the hills. At the end of the post, I’ll also provide you with an alternative just in case Amsoil isn’t for you.

Now let’s get into it.

Amsoil MLM Review — Is Amsoil A Scam?

What is Amsoil?

Amsoil is a company that primarily formulates and packages synthetic lubricants, fuel additives, and filters.
The company (then known as Life Lube inc.) is founded in 1969 by Albert J. Amatuzio who used to be a jet fighter squadron commander.

He came up with the first synthetic motor oil to meet American Petroleum Institute service requirements. Since then the company has grown a lot and has expanded its oil “catalog”.

Amsoil is based in Superior, Wisconsin but ships products all over the world.

How does Amsoil work? Is Amsoil an MLM?

A debate has been going on for the last few years about whether Amsoil is an MLM or a Direct Sales company. 

Amsoil has characteristics of both.

Let me explain by sharing with you what direct sales and MLM exactly are and how they work.  

What is Direct Selling?

According to Wikipedia, Direct selling is a business model that involves a party buying products from a parent organization and selling them directly to customers.

This party is fully independent and doesn’t work for that company.

What is Multi-Level Marketing?

According to Wikipedia, MLM stands for multi-level marketing its a marketing strategy for the sale of products or services where the revenue is derived from a non-salaried workforce.

The earnings of the workforce come from a pyramid-shaped or binary compensation system.

As an Amsoil dealer, you join this non-salaried workforce.

Amsoil provides you with 3 methods to make money:

• Direct Selling
  You purchase products from Amsoil at wholesale price and resell them at retail cost and keep the profit.
• Commission-based selling
  Earn a commission based on commission credits (Value placed on every Amsoil product) you receive when selling Amsoil products
• Recruiting a team
  You put together a team of distributors and earn more money based on their performance.

The difference between direct selling and multi-level marketing

Multi-level marketing companies and pure direct-selling companies both sell products directly to consumers. 

The key difference is that with multi-level marketing is that there isn’t a 100% focus on selling. Multi-level marketers, their maximum earning potential can only be released by recruiting others. 

You’ll notice in their compensation plans there are always special bonuses you can only obtain if you have recruited other people to join the “MLM Opportunity”. 

Looking at Amsoil's compensation plan it seems that Amsoil is a hybrid leaning more toward being a direct sales company rather than an MLM.

There is recruiting involved but not in the way traditional MLMs recruit.

How to join Amsoil

There are multiple memberships available with which you can receive benefits. 

The most prominent ones are Preferred Customers and Dealers.

The difference between the 2 memberships is that the preferred customer membership is for people that only want to purchase Amsoil products for themselves, friends, and family at a discount.

As a dealer, you’ll also receive the same discount but you’ll also be able to earn money based on your sales and recruiting others to become dealers or preferred customers.

You can sign-up to become an Amsoil dealer or preferred customer on their sign-up page or through a sponsor. 

To get started as a dealer you’ll have to pay a starters fee of $45,95 USD.

After that, you’ll receive your initial training and starter kit with samples

after which you’re ready to start selling products and recruit people to join Amsoil.

Do you have to recruit people after joining Amsoil?

There is a form of recruiting necessary but not in the same way as in MLM. 

You don’t need to recruit people to become Amsoil dealers that also have to recruit others.

In your first two years as an AMSOIL Dealer, you need to register two new qualified customers* annually to qualify. 

After that, you must register four qualified customers annually to maintain your certification. 

Whether you’d call this recruiting or simply sales is up for discussion.

Aside from this, you also have sponsor opportunities with Amsoil but you aren’t obligated to participate in creating and mentoring a team.

Do you have to recuit people?

No. Amsoil doesn’t obligate their independent dealers to recruit other to earn money or stay a member of the MLM program.

How much does it cost to start an Amsoil Business?

You start of by paying the initial registration fee of $45,95 USD. After that, you pay for the orders you place on a monthly basis. 

As a recruiter, you’ll also have to purchase their dealer starterskit for $37 which contains sample products designed to demonstrate to potential recruits.

Amsoil Compensation plan

There are multiple methods for earning money with Amsoil but the moment you get into the specifics you’ll start to notice that it’s a bit more complicated than it seems.

You can read all about it in the compensation plan by clicking here but if you don’t want to go that deep I’ll explain it in the most simple way possible.

Amsoil uses a tiered system to hand out commissions to Amsoil dealers based on the amount of money you (and your team) bring in. 

As you can see below there are 4 tiers. 

The commission on every tier is based on commission credits (Value placed on every Amsoil product) you receive when re-selling Amsoil products.

Below you can see an example of a product and how much you’ll earn based on the tier you’re in. 

These same rules apply to your team if you start sponsoring dealers. All the money your team brings in will be added to yours when qualifying for a tier. 

There are no minimum monthly quotas for sponsoring teams or being eligible for commissions.

Is Amsoil a pyramid scheme?

The problem with MLM companies is that they can be a great cover for pyramid schemes. All over the internet, you can find articles about MLM companies that turned out to be pyramid schemes.

So is Amsoil a pyramid scheme in disguise?

No. Amsoil is not a pyramid scheme (from a legal perspective). When you look up the definition of a pyramid scheme it doesn’t qualify for one.

What is a pyramid scheme? oxford languages
Definition: a form of investment (illegal in the UK and elsewhere) in which each paying participant recruits two further participants, with returns being given to early participants using money contributed by later ones. 

How to spot a pyramid scheme

The key things are that no product is being sold in a pyramid scheme and you’re being pushed towards recruiting. In other words, the members are basically financing the company.

Amsoil sells more than 1000 different products and when doing direct selling the difference between stock and wholesale prices is 25%.

You won’t make a lot by just doing direct sales but it is technically possible to earn money like this.

This doesn’t mean it’s automatically a great opportunity to earn a residual income. There are some things about companies with an MLM structure that worry me and I’m going to elaborate on that later in this post.

Who can benefit from Amsoil?

Who would benefit from investing in Amsoil:

• Expert salesmen and recruiters
• Extrovert with influence in the motorcyclist community
• Online influencers

Who shouldn’t invest in Amsoil:

• People that aren’t naturally social
• People that hate recruiting
• People that aren't interested in face-to-face selling
• People that can’t take financial risks

Pros and Cons

Pros

• High-quality products
  The products have proven to be better than most of its competitors.
• Simple compensation plan
  The compensation plan is easy to understand.
• It’s a proven brand
  It's a proven brand that has been around for a long time. It has survived multiple economic crashes which means it's stable and isn't going anywhere any time soon.

Cons

• MLM companies have a bad reputation
  This makes recruiting difficult because most people will automatically assume it's a pyramid scheme.
• Products are expensive.
  Amsoil products are above the price of the market.
• You Pay To Play
  Placing orders is needed just to stay eligible for earning commissions.

What products does Amsoil sell?

Amsoil made its mark by fabricating and selling synthetic oils but they didn’t limit themselves to that. Amsoil now sells hundreds of different products mostly geared towards motorcycles.

Amsoil also sells gasoline, diesel, clothing, transmission fluid, gear lube, ant-freeze & Coolant, firearms lubricant/ Cleaners, protectants, and more.

There’s a large variety of products that you can sell as a dealer which are functional which increases your chances of succeeding as an Amsoil dealer.

Amsoil while expensive seems to be of high quality. Multiple tests have been done to compare it to its synthetic oil counterparts such as royal purple and mobile 1 and came out with good results.

It’s a product you can stand behind.

Royal purple vs Amsoil 

Mobil 1 vs Amsoil

How does Amsoil sell these products?

Amsoil provides consumers with multiple ways to buy products. Here’s a list of all the ways Amsoil products are being sold. 

• Online: Sales through your personal website or the Amsoil website
• Catalog: Sales that are done through Amsoil catalogs that are shipped to people.
• Preferred Customers: Membership program that comes with a discount on products.
• Retail Accounts: Sales through businesses that operate out of a storefront or outlet with public access for customers. You sign up and provide them with Amsoil products.
• Commercial Accounts: Becoming a middleman for businesses that use equipment that requires oil.
• Dealer: Independent party that is able to keep stock and sell it to consumers

Not everyone can join all these programs. 

There are some prerequisites needed so I’d advise you to go to their individual sign-up pages on the official Amsoil website before registering.

Can you really make money with Amsoil?

Yes.

You can make money as an Amsoil dealer but it’s definitely not for everyone.

Your results are going to be heavily based on how good you are at face-to-face selling, recruiting, and your place in the pyramid structure.

The truth is…

…earning a decent income with Amsoil or any other MLM company is incredibly hard.

The people that tend to excel in MLM have decades of sales and recruiting experience.

Why is it so hard to make money with companies like Amsoil?

I have summed up the reasons why it’s hard to make money with Amsoil and MLM companies in general into 3 points.

1. MLM’s/Direct Selling Companies are often associated with pyramid schemes
MLM’s have a pyramid recruiting structure that you often have to join to be able to make decent money or at the very least not lose money. The problem is a lot of pyramid schemes disguise themselves as MLM programs making it difficult to differentiate the two.

This is the biggest problem why most distributors have a difficult time recruiting people. It’s a giant red flag in most people’s eyes.

2.You have to consistently invest your money to earn commissions
You’re only eligible for bonuses and commissions if you buy their products. The bigger the bonuses the more product you have to buy. You do get discounts but if you can’t sell the products I can see you easily fall into a financial deficit.

3. Too much competition 
Amsoil is a billion-dollar company which means there’s is an insane amount of independent sellers around the world.

You’re basically selling the same products that millions of others are trying to sell which makes it that much harder to stand out and succeed.

That’s a lot to overcome for someone that doesn’t have any sales or recruiting experience.

Multiple studies have shown that the majority of people that get into MLM lose money rather than earn it. This makes sense if you take into account the 3 factors I just mentioned.

On the pink truth website, there’s an article that references 2 different reports from researchers named Robert FitzPatrick and Jon Taylor.

They did separate studies using different methodologies, and both concluded that over 99% of distributors lose money.

Here are some more statistics about MLM:

• Nearly half (47%) of MLM participants reported that they lost money.
• One in four (27%) MLM participants reported that they broke even (made no money).
• MLM participants are 7% more likely to declare bankruptcy during their lifetime.
• Direct sales have risen 79% in the last decade, but MLM participants continue to lose money.
• 90 – 99% of distributors in multilevel marketing only receive a couple of hundred dollars commission per year.
• Out of 33,000 interviewed, 90 people made enough money to cover the costs of building their business.
• 50% of the people who start a network marketing enterprise abandoned it in the first year.

Sources:
FTC
AARP
Jobsinmarketing.io

My Personal Take

As I said before, making money with Amsoil and Direct Selling/MLM companies, in general, is incredibly hard.

You’re almost obligated to purchase products every month that tend to be overpriced which makes them hard to sell.

It’s rare for people to even break even with MLM which makes it annoying that MLM’s advertise it as easy money. There are countless MLM stories online about people ruining relationships trying to recruit their friends and family and losing money.

What I do like about Amsoil is that they have high-quality products that people trust. This makes it easier to sell products and recruit members than with ACN or Mary Kay that is seen by many as a pyramid scheme.

That being said, there are hundreds of studies that say that there’s a 1% chance of being successful with MLM/Direct Sales.

This explains why there are no real numbers about the success rate of Amsoil online.

This legally isn’t seen as a pyramid scheme but I wouldn’t recommend investing in a method with such a low success rate.

Verdict

Is Amsoil a scam? No, but I can’t call it a legit way of making money online either.

Amsoil Alternative: Earn Money Without Face-to-Face Selling or Recruiting

You might’ve read my review and think Amsoil might not be the program for me to earn money with. This doesn’t mean there are other options that might be a better fit for you. 

In 2018, I started a simple website and started to earn commissions without ever needing to recruit someone or sell products.

The method I used to earn those commissions is called affiliate marketing. 

The only thing I do is refer people to websites such as Amazon, Walmart, and Ebay in exchange for a commission when they buy something there. 

I simply give information about the product and put a unique link on the page that directs them to website where they can buy it.

Sounds great right!

I learned how to do this by following a step-by-step program that taught me everything I needed to know. 

Maybe affiliate marketing might be an option for you to.

That’s all for today. If you have any questions or you just want to show some love don’t hesitate to leave a comment.

See you at my next post!