Friday, October 21, 2016

Personal Responsibility For Your Amway Business?

One of the disturbing things I have noticed over the years about Amway IBOs and IBO leaders is how they wlll tell downline to trust them. To trust them as they have already blazed a trail. No need to re-invent the wheel. Just ride the coattails of your upline to success. The system is proven. Many IBOs take this to heart and put forth tremendous effort. Then when they fail, upline will shun them and tell them that the failure is their own. That they are personally responsible for failure. Does that sound as if Amway leaders themselves take personal responsibility?

Now I am not talking about IBOs who sign up and do nothing, or never place an order. I do believe that the fact that many IBOs sign up and do nothing brings other concerns about how these IBOs were recruited, but I do not recall ever seeing an IBO do nothing and then complain that Amway was a scam or anything like that. I'm referring to IBOs who signed up and did what upline advised, including expending time and money to carry out that advice.

I have found, however, that many people who are critical of Amway and the systems, put forth much effort, did everything they were told, and did not find the success that upline promoted, or in some cases, guaranteed. My former sponsor was still active, last I heard and has been in Amway for over 20 years. I do not believe he has ever gone beyond platinum, and I know that he was never a Q12 platinum. Some Amway apologists might see being a platinum as a bonus, but when you are hard core sold out to the systems, platinum is a break even or make a small profit business. Factor in that time spent by husband and wife and these folks are breaking even or making a fraction of minumum wage. Is this the dream that will allow you to buy mansions with a cash payment? I'm honestly curious what return on investment a platinum couple would receive for all they work they do? I suspect it's minimal or even a loss unless they can push through to diamond. Then if you "make it", your income will be from the masses who try and fail using your advice. I couldn't live with that set up. Maybe the diamonds are too far invested to just quit?

What is also disturbing is how people will tout the system as responsible for any success, but hide the vast majority that the system doesn't help. Sure, some will succeed in Amway, but for every success, there are hundreds if not thousands or tens of thousands who fail. And if you consider diamond as the benchmark of success, the failures could be in the millions. As I said, some succeed, but very very few in relation to the number who try. Going diamond is probably less common in the US than winning the lottery. What's troubling is how leaders will make it seem like anyone and everyone can succeed, which is not being honest.

Succeed and the systems and upline take credit, but fail or quit and it is your own responsibility. Are these the kinds of leaders or mentors you want advice from?

Thursday, October 20, 2016

Is Amway A Level Playing Field?

The Amway business is a level playing field. At least that's what my upline told us when I was an IBO. That everyone starts at zero. While that is somewhat true, there were other factors that existed, that most IBOs did nto know about. That factor is the possibility of PV manipulation. I believe that groups that are not on direct fulfillment (Groups still calling in and picking up) are able to transfer PV around. Thus certain groups or favored downline could be manufactured into higher pins. I believe most groups are currently on direct fulfillment but I did confirm about less than a year ago that some groups still are on call in and pick up.

But let's examine the concept that everyone starts at zero. While this aspect may be true, certain people are simply better at selling, or better and more adept at socializing and talking to others. So while your PV count may be zero, the skills needed to start and run a business is not a level playing field for most. I believe uplines state this to give prospects the idea that everyone has an equal chance at succeeding in Amway. I just cannot believe this to be true. Even current diamonds, while having achieved a certain level, probably could not "start at zero" again and build a diamond business.

Thus when you really think about it, the "old timers" of the diamonds should actually be given less credibility than the newer ones. Do you really believe that a diamond or higher pin who built his business in the 1970's can really teach people in 2016 how to build the business in a way to address people in 2016, and the fact that the business is mostly internet based as opposed to the old days, not to mention the advance of social media, text messaging and other modern forms of communication.

It is easy to stand on stage, tell people how great you are, show off material wealth and then tell prospects that everyone starts at zero and that anyone can build the business. I do not believe that it is true. I also strongly suspect that very few (if any) of the current diamonds would be able to "start at zero" and build a new diamondship here in the US, where the reputation and shrinking sales would be handicaps too great to overcome for the vast majority of propsective IBOs. I recall back in 2005 or 2006, WWDB had a commitment for personal growth amongst the diamonds and above. I do not believe much fruit was grown out of that effort. The diamonds had committed to duplicating their groups to prove it could be done. Not a single one of them, as far as I know, advanced to a significantly higher level (i.e. diamond to double diamond).

Wednesday, October 19, 2016

Debating Amway?

I recently had a debate with an Amway supporter and I sometimes wonder how some Amway supporters can continue to defend some of the claims they make even when they have no facts to back them up. For example, the supporter insists that Amway has created more millionaires than any other company. So I asked where he found that information because as far as I know, Amway has never made that claim and if it were true, there would be no reason for Amway to hide it. A better question would be to name 5 of these alleged Amway millionaires and prove that they are millionaires? Someone with a large income can still be broke and have a low net worth if they spend more than they make.

The Amway supporter also insisted that he is proof that Amway works because he is successful. He never spoke about the financial condition of his downline, nor revealed anything about his level or structure. Instead, challenged Joecool to talk about my former business and why I wasn't profitable. As I explained in a previous post, my Amway business didn't prosper because I followed upline advice to reinvest my profits into tools. And I am certain that I am not alone in having been given this advice. I do not claim they don't exist, but it is my guess that a group where even half of the IBOs make a net profit would be very rare, especially when some groups teach their downlines to primarily "buy from themselves". Buying from yourself only makes you a customer, not a business owner.

When discussing the miserable average income of an IBO, supporters like to cite that some IBOs do little or nothing, but fail to mention that when calculating the average income, Amway disregarded the IBOs who were not considered active. And because we know that you need to move at least 100 PV pv to earn a bonus, then we can conclude that IBOs as a whole, earn very little, with a few big pins bringing up the average. I believe if we looked at the median (Disregard the highest and lowest)income for IBOs, it would be far less than $100 a month.

So the question is how can an IBO actually prove that they are successful? Maybe the first step is to be willing to talk about your business. Most IBOs are anonymous commentors on this blog, yet outright refuse to disclose any details about their business, and downplay the expenses associated with the business, even when upline will promote "low overhead" as an incentive to join Amway. While $150 or $250a momth might be low overhead, it is very high if your monthly income is $10 a month. Somehow, upline will convince IBOs that taking losses is a sign of success. Or that an IBO is successful as long as they remain on standing order ot continue to attend functions.

Honesty and transparency is how an IBO can prove his or her success. Making a nice living on the backs of your downline is not success, that is exploitation of your downline. Whenever I debate about Amway, I can use actual facts and numbers that is supplied by Amway. Those defending Amway seemingly "knows a guy who knows a guy", who made good money in Amway, but supply no actual verifiable facts.

Tuesday, October 18, 2016

Building Your Amway Business?

When I was an IBO, many people would talk about "building a business". But many folks who spoke about building a business didn't know what that meant. I believe it is because they were taught that building a business meant listening to cds or tapes and attending functions. Or building a business might mean sponsoring others. In my segment of the Amway world, building a business pretty much meant recruiting and showing the plan. Apparently I was mislead and many others were as well.

Building a business, generally speaking means building a customer base. A business moves products and services for a profit. In groups that focus on buying from yourself or prosumer nonsense, generally will struggle because the revenue they generate in their business is coming from their own pockets. Or their jobs are actually supplying the money for their own bonuses. In this model, the only way to profit is to sponsor many downline so the pyramidal compensation plan can work in your favor.

Many IBOs compare themselves to a franchise. Can you imagine a true franchise where your long term success depended on your ability to open other franchises? What if you as the owner and your family accounted for the majority of the sales? Could this franchise survive? More than likely not. Yet this is exactly what many Amway IBOs do and they mistakenly think they will be successful. The only reason why Amway IBOs are able to play out this model longer than a traditional franchise owner is because they do not have to rent office space or hire employees.

If an Amway IBO ran their business like a traditional business, the lack of retail sales to non IBO customers would be immediately apparent when the first month's electric bill or lease payment arrived.

Building a business entails many things. These things may include advertising, marketing of products, and do not necessarily include any training. In its simplest form, the Amway business is about selling and using products, and getting others to do the same as you do. Why do IBOs think such extensive training (standing order and functions) is needed? I challenge IBOs to write up an actual business plan for their Amway business, including projected sales and expenses and see what you come up with. If you think I am just being negative, write up your Amway presentation and show it to a loan officer at a bank. See what they have to say. Seriously.

Monday, October 17, 2016

Controlling Time And Money = Amway Success?

One of the big things that the speaker hit on when I heard the plan was time and money. He said because of the job, you may have money, but not enough time to do what you enjoy. He went onto say that if you have no job, you may have a lot of time, but you'll be broke and won't be able to do what you enjoy. He also said that controlling time and money is essentially financial freedom. This concept appeals to many and makes sense in the big picture of life. Afterall, who wouldn't want to retire early and have enough cash to travel the world and only do fun things?

But the reality is that nearly ever single IBO who registers for the Amway opportunity and the tools system, will never realize this dream. An Amway recruiter may paint a nice picture of how simple the business is, and that you can simply buy products and get others to copy or duplicate you and before you know it, you will be in control of time and money, and live "happily ever after". At one time, I believed it myself.

The more likely case however, will be that the business, including the system of cd's and functions, will cause you to have less time and money. In general, the Amway (and partner store) products costs more than your local big box retailers, and the cost of the systems add up to at least several hundreds of dollars if you are "CORE" (CORE = following the Amway teaching system). Thus ironically, what many seek more of, they end up with less of, because of the business and the related activities. The functions and other educational materials take up valuable time and resources from the IBO and rarely ever results in any kind of significant return on the investment. Most IBOs would be better not getting involved.

Time and money, think about it. Are you getting more or less of it because of your involvement? I recall thinking how great it would be to actually have control of more time and money. But my involvement with Amway, ironically left me with significantly less of both. I spent much time working the business hard and it cost a lot of money to work the business hard. The only beneficiary was my upline who profited from my efforts and tool purchases.

Friday, October 14, 2016

How Much Money Can An Amway IBO Lose?

When I was recruited into Amway, I was told that I could make money, which would roll in forever and ever. Residual income. That was the concept that appealed to me when I was recruited. I was also intrigued when I was told that I could do as much or as little as I wanted. I winded up signing up for Amway sometime in 1997 or so.

However, when I signed up, my sponsor told me that I would be wasting my time signing up to sell products (not verbatim). That if I was going to get involved and spend the time, I may as well try to build an organization and make the big bucks. I consented and then he immediately told me that I needed to get on standing order. I was told that standing order was a tape subscription and it was only $6 a tape. Nobody ever mentioned that every other week, it was a two tape set so basically, you are buying at least 6 tapes (now cds) per month minimum.

After a week or two, I had registered a couple of my friends into the business and my sponsor tells me that I cannot be a leader without attending all of the functions, and that I cannot listen to the same tapes (cds) over and over. That's when my expenses shot up like crazy. Of course I was excited with the folks I had sponsored so I went along with the plan, and I was edified for it so it seemed like I was "being an emerging leader" and was propped up as an example of how to build an Amway business.

Amway defenders question how I could possibly spend an average of nearly $1000 in a month for tools. Here's the breakdown, and although my WWDB group experience may not apply to all, I certainly continue to hear similar stories of abuse.

Standing order $36 a month. (6 tapes a month @ $6 each)
5-7 extra tapes each week $$120 - $168 a month
Amvox (voicemail) $24 a month
Open Meeting $6 a month (plus parking fees)
Regional functions $24 a month (plus parking fees)
Subtotal: $258/month (not including parking fees)

Major functions (4 times a year) I live in Hawaii, and major functions required mainland travel at peak travel times (January, March, July, October).
Round trip airfare $700
Hotel: $240 (for 2-3 days)
Rental car: $150 - 50 per day for 2-3 days)
Function tickets $100 to $150
Meals and other misc expenses pushed a major function to over $1200 for each trip.

These costs, not including gas money, totals about $8000 a year. Add in the cost of products and you are spending about $1000 a month on Amway. Yes, the products are not a business expense, but then again, how many of those over-priced products would you buy if you were not an IBO? Do any former IBOs still buy double x? Do IBOs actually sell any double x? I believe these customers are rare.

If your sponsor told you that Amway would cost you nearly $1000 a month (higher end, including product) or $100 a month (low end, not including products), would you still join? Once you agree to register, the expenses are then slowly revealed to you and in many cases, called investments into your business. Be wary and ask tough questions as to whether these items help you to make a profit, or whether they take away your profit.

Upine will often lure you in by giving you tools or cds and even paying for your first function or two. But if you show signs of interest or if you sponsor a downline, you will become a "business owner" and you'll be expected to do the same for the downline you sponsor. Amway can become an expensive lesson in why you should avoid MLM altogether. Caveat Emptor.

Thursday, October 13, 2016

Amway Success Is Not Obvious?

One of the things the diamonds and other big pins like to do is to flaunt their wealth. They show up at meetings with fancy cars, they like to wear fancy suits and my former LOS, WWDB, even had and still has a function called "Dream Night". Dream Night is where the diamonds show off pictures of mansions, jets, cars and vacations and they claim that everyone will one day join them in their lives full of pleasure and excess. Despite these displays of wealth, there is much evidence to suggest that these diamonds may not be able to afford all of these goodies. In fact, I strongly suspect that many diamonds are living in debt because they cannot sustain these fairy tale lifestyles on their incomes, even adding up the Amway and tools income. Now I'm not claiming that all diamonds are in hock, but I would not be surprised if half of them were in debt.

Even lower level IBOs attempt to appear wealthy. They may dress nicely and whatnot, but in the parking lot at functions, might see a more accurate glimpse of reality when you see what these IBOs are driving around. I remember seeing a bunch of broken down cars, some of them on their last legs at the local functions. Yet if you were to speak to some of these nice folks, you would be told they are doing great and that business is booming.

But my question is why isn't all of this Amway success obvious? Why do IBOs dance around the questions about how much they earn from Amway? Why do diamonds like to copy some once a year bonus and pretend that they earn that kind of income on a monthly basis? If a room were full of IBOs and only the ones with a NET profit were to stand up, only a small handful or less IBOs would be standing. Most of the rest probably don't even make enough to cover the cost of their voicemail.

Why can't an entire group of IBOs earn a net profit? The answer is simple. In the vast majority of groups, the cost of tools exceeds the group income that is earned from Amway. Do the math and it's easy to see. Unless your group refuses to purchase any tools and focuses on selling products, then you are more than likely to end up losing money. Success is not obvious, and the reason for that is quite obvious.