My Job Is A Pyramid?

 One of the funny things I take issue with is how Amway uplines will create an us versus them mentality in the business. Thus, friends and family who care about you suddenly become "negative" and association with them should be limited or eliminated.  In some cases, people are discouraged from excellence in their jobs or professions because it takes the focus off of their Amway business. What I was told was to do my job, but my radar should always be on for new prospects. Some cross line IBOs turned down promotions at work because they did not want to have to work longer hours or take the focus off of their Amway businesses.

In some cases, the speaker at open meetings or functions will put down people's jobs. A commonly used acronym was J-O-B = "Just Over Broke". Some leaders also would say that my job was a pyramid because you will never earn more than the boss. A completely ridiculous comparison because someone's job has no relationship with how people view the Amway business (i.e. an Amway pyramid) and in a job, every employee gets paid and has a net gain at the end of the month. Not true in Amway. If IBOs only use voicemail for example, an IBO at 100 PV or less will already be at a loss, and that is not considering any other expenses that IBO may have. And while a job may have a corporate hierarchy, or chain of command, the business owner and CEO or manager earns their salary from customers, not directly from the pockets of their employees.

Some uplines will laugh about people's jobs, stating that they wake up at the "crack of noon". What these same uplines may not tell you is that they wake up at noon because they are up at 3:00 in the morning doing night owls for their groups and looking for recruits. These same uplines possibly can't do much with their downlines during the weekdays since their downlines mostly tend to have 9-5 jobs. So a diamond's job is basically working the night shift and weekends.

So, if you are of the opinion that nobody should criticize the Amway opportunity or IBO behavior, maybe uplines and IBOs should not criticize family and friends who disagree with or are not interested in the opportunity, and maybe the same uplines and IBOs should not criticize people who choose to work jobs. Don't most IBOs rely on their jobs as their Amway income is not sufficient to even pay for their Amway business related expenses?

Amway The Negative Sum Game?

 In my informed opinion, the Amway opportunity as taught and run by the AMOs such as WWDB or Network 21 is a negative sum game.  In other words, the IBOs have X amount of dollars but the system's expenses such as standing orders, function tickets and other training related expenses eat up the resources of the IBOs and it's a a constant and massive drain of the IBO's resources.  This is in contrast to a perhaps poker game where maybe 7 players each bring $100 to the game.  At the end of the day, there might be several winners and losers but when the game ends, $700 still sits in the hands of the players, even if some of them might not have their original stake of $100.

In the IBO world of the AMOs, "serious" IBOs are expected to consume or possibly sell some products but generally, this process reduces the pool of resources that IBOs may possess, but because they receive goods for it, I don't view this aspect of the business as a negative sum game, although there could be debate as to whether these generic in nature products are worth the "premium" price that is often charged.

Now when you get into the tools and functions, this is where the IBO's resources are systematically drained with little to no tangible results.  Those who participate have their resources drained week after week, month after month and year after year if they "don't quit" which is what upline teaches.  In my previous example, a group of poker players might start out with $100 each, and a group of 7 players would have $700 and at the end of the game, they collectively leave with $700, which is a zero sum game.

In contrast, let's say a group of 7 IBOs all start the month with $500.  It they all consume/sell their defacto 100 PV quota, they likely have approximately $250 left after consuming 100 PV's worth of products.  Now, if these IBOs are dedicated to CORE, which is the teaching system these uplines use, then IBOs will spend money on standing order, books, audios, function tickets, meeting tickets, gas money, and possible voicemail.  At the end of the month, these same IBOs have likely zero dollars left.  Amway profits from the sale of products and the uplines profit from the sale of tools and function.  A zero sum game because at the end of the month, IBOs all have less money than they started with even if you disregard the expenses of moving/consuming 100 PV or more.  

Yes, there are times some exceptional IBOs might sponsor and grow their group enough to scrape out a net profit, but if you factor in the business expenses of their downline, then you once again have a net loss.  You could almost compare the AMOs to a casino and IBOs as gamblers.  There are occasional winners, some might even be big winners, but in the end, the house always wins.  In this case, it's the AMOs who win because they profit handsomely despite the fact that their system is so ineffective that the outcomes (IBO's success) seems more coincidental than anything.  Sort of like seeing those infomercials on money making systems where they trot out someone who might have experienced some degree of success, and you'll see a tiny caption on the bottom of your TV screen that says "unique experience, your experience may vary".

And for these reasons, Amway's motivational groups such as WWDB, BWW or Network 21 are running negative sum games where it is inevitable that the upline diamonds always win and the downline loses because the tools and functions expenses heaped upon IBOs systematically drains their resources week after week and month after month.  The lottery is a negative sum game as well, but the sad this about all this is that any significant success in Amway is similar to the odds of a lottery despite the fact that Amway the opportunity is supposed to be a legitimate business opportunity rather than a game of chance.

The Loophole?

 There's been some interesting debate, although not that recently recently on the James Randi Educational Forum (JREF). Most call Amway a scam and one prolific defender cites the point that IBOs are not Amway. And Amway doesn't sell training materials. While that is legally true, the owner of Amway, back in 1983 acknowledged that the sale of tools was, basically unethical and possibly illegal. However, inaction by the Amway corporation led to the heyday of the tool scam and financial abuse of downline. There's the loophole that covers Amway. IBOs are independent.  Therefore, Amway is not directly liable for what their distributors do.  

However, these same IBO leaders could not run free scamming downline if Amway were to intervene. I believe Amway doesn't take any apparent significant action for fear that these leaders would move their groups to another MLM or opportunity.  The result over the years is a lousy reputation in the US where the name Amway is associated with pyramid, scam and other undesirables. I suppose Amway has survived though, because of an alleged saying by PT Barnum. There's a sucker born every minute. I suppose there are enough pockets of young or unsuspecting people who can still be convinced to join, so it's business as usual.

Which brings to to the next point. Unfortunately, new IBOs are basically suckers. They pay a fee to Amway, in order to become an unpaid Amway salesperson. You absorb your own time and expenses in order to move Amway products, and if you move enough of them, you can get a minimal bonus. You also at your own time and expense, recruit other unpaid salespeople for Amway. Your reward for this is you get credited for a portion of their sales, provided they use or actually sell anything. Most IBOs do little or nothing so your efforts are usually in vain.

But the real trick is to have IBO leaders convince downline that voicemail and cds and live meetings (seminars) can actually help you succeed. There is zero unbiased evidence to suggest that this training or tools do anything but make handsome profits for the people who sell them. Even if many IBOs sign up and do nothing, there are enough serious ones to support the Pharoah diamond leaders. And food for thought, do IBOs really need voicemail in an age of email, twitter (X), facebook and other more efficient means of communication?

So yes, Amway IBOs are not Amway. Amway diamond leaders are not Amway.

But if Amway cannot or will not stop those who taint their name, then they simply must live with the reputation of being a scam or a pyramid. They can be legal to the letter of the law, but most people see it for what it is. Being legal doesn't necessarily mean ethical or moral. It is my opinion that when you sign up for Amway, you are nearly assured of losing money. It's not your fault though, it is the result of a bad system. I encourage everyone to do their due diligence before joining any business, Amway notwithstanding.

Success Speaks For Itself?

 I heard a great comment from a commentator on a related Amway blog. Basically, he said if IBOs were so successful, people would just naturally be attracted. And that's true! Where I live, the local electric company is an attractive place to work with a good salary and benefits package. When there's a handful of openings, you might get as many as 6,000 people applying for these positions. When the federal government hires for the local post office, you get thousands of applicants for a handful of jobs as well.

But IBOs have to justify their positions. The common ones are how Amway products are concentrated, or they have magical ingredients in their vitamins. It is my position that if these products were so good and the opportunity actually produced successful IBOs, there would be no need to be deceptive about the products or opportunity. The products could easily me marketed. In fact, customers would be seeking IBOs to find the products and there would be lines of people waiting to see the opportunity. But that isn't the case. Clearly, Amway IBOs use some degree of deception usually called the curiosity approach or outright lies.

Instead, IBOs themselves are the primary consumers of Amway products. Many IBOs are deceptive when inviting people to see the Amway plan. Some prospects are outright lied to when recruited for the Amway opportunity. The curiosity approach is still used by many, because mentioning "Amway" is more likely to get you funny looks than interest. If what I am writing is not true, why do IBOs need to deceive people? Why don't some IBOs open their books and display the financial success they claim to have? Why so secretive? Why aren't there hoards of new diamonds and emeralds each month? Instead, you mainly hear of the Amway growth in foreign countries. Most likely because the Amway name and reputation has not yet been soiled as it has in the US and Canada.

In the US, I see primarily the same old diamonds who were in control of the functions and systems from more than 20 years ago. In fact, factoring in diamonds who quit or dropped out, I believe there are fewer diamonds now than when I was an IBO in the 1990s. Some of these diamonds also had some apparent financial difficulties. The opportunity is far from how it's promoted. Success speaks louder than words, and where North American Amway success is concerned, the silence is deafening!

Amway Is Unwinnable?

 When people see the Amway plan, it sort of makes sense. You need to find six people to go direct, in 2-5 years and you have residual and willable income for life. You are then financially free and can spend your days walking on exotic beaches while checks keep coming in. This is what lures many prospects to take a better look and maybe even test the waters and give Amway a shot. After all, who wouldn't be interested in financial freedom and the ability to fulfill some of your ultimate dreams? Only a fool would turn down such an opportunity right?

While Amway looks reasonable on paper, too many things derail this plan for financial freedom and untold wealth. Over the years I've been blogging, I've challenged Amway supporters to name a couple of people who are financially free and walking the beaches while income rolls in. Very predictably, nobody has identified a single person who achieved some high level in Amway and is sitting back relaxing while money keeps coming. We even see crown ambassadors passing away while still working the business.

So why can't IBOs achieve what they aspire to? Because in my opinion, the odds are stacked against them. Sure, a rare individual might go diamond but the occurrence is very rare and almost as rare as winning the lottery, even though Amway is not a game of chance. I will go and list the reasons why IBOs are playing a game they can't win, even though they think they can. That is the sad part, that the upline is motivating downline to "never quit" even though they will "never succeed".

The system is set up for very few to succeed. Even in the common 6-4-2 plan where everyone did enough to earn a bonus, there is one person at the highest level with 78 downline who earn less. In real life, most IBOs do little or nothing. At Amway.com, you can see income disclosures that show how few people reach the higher levels. It's a tiny fraction of 1% that reach the higher levels. Even reaching platinum is a lofty achievement and platinums might not even see a net profit due to business expenses.

Business expenses such as product packs, catalogs, cds, books, voicemail and functions add up to significant expenses in the course of a month. If you're hoping to achieve financial freedom, you'll be expected to participate in the teaching system and more than likely, these expenses will be the reason for your business losses. Beware of upline who encourage you to go in debt to purchase training.

The products in general are not competitive. Sure, the Amway IBOs may give you some pitch about products being concentrated or of high quality but let's face it, consumers don't care about high quality soaps and household cleaners. There is nothing wrong with the similar products that you can purchase at Target or WalMart at a fraction of the cost. When your products can't compete on a level playing field, on what basis do you expect to sell these products? For that reason, many IBOs become "self consumers" and wind up with no actual customers.

Amway's reputation is soured. Most people know or know someone who had a bad experience with Amway. Due to past IBO behavior, people have developed a negative view of Amway. People being tricked or lied to in the past may have contributed to this issue. Add that to the fact that so few people actually make money turns this business into an almost insurmountable challenge. Even those who achieve often find themselves out of qualification shortly after.

For these reasons, my conclusion is that the Amway opportunity is a game that IBOs simply cannot win, even for those who learn from upline and put forth tremendous effort. And the longer you play. the bigger your losses become. Do your due diligence before undertaking any business opportunity.

Diamonds Are Like "Miners"?

 A lot of people come and go in Amway, but many of those who come and go don't even notice the scam. They get sold on what they believe is a business opportunity that they can make some money at, or at the very least save some money on products that they would normally buy anyway. If they do it right, they can possibly make some "real" money and with some hard work, you can build it right and have the option one day of walking away from Amway and living off ongoing residual income from Amway. It sounds reasonable and therein lies the scam.  

For years, I have challenged people to name 2-3 people, aside from the Amway owners, who joined, built the business "right" and was able to walk away and retire with ongoing residual income, enough to be financially free forever. Not a single person has been able to name and confirm that even a single person has done this. I believe it's all a lie and part of the scam. Amway's distributor force turns over about 50% each year. How can you build a residual income empire when half (or more) of your downline quits each year, and most quit in less than a year, not counting those who join and don't do a thing.  I believe Amway diamonds trade their 9-5 jobs for the night shift. They work at night and into the morning hours because they are working to replace people who quit and to support downline platinums who might struggle or fail to re-qualify for that level. If upline says they are working for the love of their downline, I call BS on that. If walking away and enjoying life was an option, why hasn't anyone chosen it?  Surely a few people would have wanted to quietly retire and enjoy life with money money than they know what to do with right?

Now you could argue that a diamond's "work" isn't that bad and they aren't reporting to a boss. And that could be true, but I imagine the pressure of churning people in and out to keep qualifying can be stressful in itself. If you live on an island like me, you can eventually have trouble finding new people to work with. In 1997 or so, there were a bunch of diamonds in Hawaii and they all seemingly moved to the mainland. Now I'm not sure why but my upline diamond was Scott Harimoto, who loved the ocean and the beaches. Yet he moved to Washington state last I heard. I believe they needed new grounds to mine, just like gold miners.  The grounds they worked ran out of gold so they needed to find new mining grounds?  I don't know this for sure, but it makes sense based on my informed knowledge of how the business works.

The next part of the scam is how IBOs will tell you about Amway's generous money back guarantee. 100% they'll tell you. What they don't tell you is that the guarantee is only on some of the Amway products and the sign up fee. The cds, books, voicemail and functions are not sold or run by Amway. And these expenses can be very significant over a period of time.  IBOs and prospects need to know this. You can lose thousands and get back pennies on the dollar asking for a refund on the sign up fee and perhaps a few products. 

Also, IBOs and prospects are often shown only the very best case scenario (such as going diamond) but not told that your chance of being struck by lightning is much higher than your chance of going diamond, even though going diamond is not a random event. A real life and likely scenario is getting in and trying hard for a while, and then quitting with some business losses. At least if you know this and still try anyway, you will have done so with full disclosure.

Lastly, it's insidious in my opinion, for upline to tell you to trust them and to do as they say, and then turn around and tell IBOs that failure is their responsibility. That they didn't work hard enough or do things just right. That sure isn't what they are preaching when recruiting you into the business. They are saying how sharp you are and how you're likely to tear up the business. But it's just another facet of the scam. I've outlined the parts of the opportunity that I believe are scams, but I'm sure it's not limited to my point of view.

Good luck if you read this and join anyway.

False Income Claims?

 One of the things that is so common on this blog and others is IBOs passing by, making big income claims without a shred of evidence. IBOs will tell you that it's none of your business, or that what they earn is not reflective of what you might earn. I believe it's very relevant. As a prospect, I would want to know what the typical IBO might earn. If I were going to open a Subway franchise, I would want to know what my likely earnings would be. In Amway, they only show you best case scenario and not what is likely or typical. Of course this is to make the opportunity more attractive than it really is in hope of getting you to sign up.

Look at an interesting comment from an anonymous blogger from India:

"Hi i wish to tell you that i am a scientist and full time into research. I have the time for my hobbies like bowling, horse riding etc. But the big news is that i am also at emerald level in Amway. Now what do you have to say about that Mr Joe(un)cool?????????"

If you'll notice, the commenter is basically saying he has a full time job, but enjoys his hobbies all the while running an emerald business. Then he also tosses in a minor insult towards Joecool while he's at it. Now we know there is documentation that many platinums do not make any money (net), therefore, an emerald likely doesn't make that much from Amway. I'm sure a decent job will net you more money than the average emerald.

Also, I call BS on this claim. Someone who is emerald would likely be burning the midnight oil churning out new IBOs to maintain the business and trying to push towards diamond. I'll give the anon one things. the name of Amway hasn't been completely ruined in India as it basically has been in the US and Canada. But I'll toss in one more thing. An emerald, even if making a net profit, likely has several hundreds of downline who are losing money because of functions and other tools that ironically, are designed to help an IBO succeed.

I wonder why IBOs are taught to be deceptive? Why can't they speak honestly about Amway and what they earn from Amway? Is it against Amway rules or do the uplines want to hide something that is painfully obvious? I know that WWDB, my former LOS, taught IBOs to "fake it till you make it". Translated, that meant to lie about your Amway income and to make yourself look successful, even if you had no money to put food on your table.

So which is it? False/inflated income claims or outright lying? You decide.