Wednesday, June 28, 2017

Avoid Using The Name "Amway"?

I often find it comical that to this day, I still see people who like to hide the Amway name when recruiting others. I believe this tactic has been a major factor in why Amway has a bad reputation in North America. When I was recruited, I was lied to as well. I was invited to a "beer bust" only to find out it was an Amway meeting. I went home that night thinking WTH was that? They lie to us and then expect us to join the business. And to this day, I believe this practice continues. They might use another name such as "Liberty Marketing" or "Worldwide Group" to mask the opportunity they are pitching. My question is why?

Over the years, IBOs have tried all kinds of ways to disguise the Amway opportunity. In the past, it was network marketing, e-commerce, online shopping mall and the corporation even changed Amway in North America to "Quixtar". Sadly, the name change to quixtar did not work, probably because the same tactics were used when recruiting new IBOs into Quixtar. Amway eventually changed the name back to Amway. I believe this bad reputation in North America is why Amway, in years past, enjoyed the most business growth overseas where people either do not know the Amway name, and likely because there haven't been enough former Amway/AMO victims to soil the name in other countries. As markets mature and people get to know about Amway, we se what is happening now. Amway revenues have plummeted from 11.8 billion in 2013 to 8.8 billion (global) in 2016. That's a serious decline!

So IBOs, how can you expect someone to trust you and do business with you if you are deceitful or outright lie about the Amway opportunity? Are you ashamed of the Amway name? If you are ashamed or scared to drop the "A bomb" on people, how will you ever be able to show any plans, let alone sponsoring anyone into the business? My former sponsor used to tell our group that the biggest challenge is overcoming the name Amway. To be fair, Amway the corporation is not the reason for the bad reputation. It is the unethical and bad behavior of IBOs that lead to a bad reputation but on the other hand, it's not the like Amway police have been cracking down and visibly taking action against the violators so Amway is also guilty to some degree.

Conversely, people who come right out and talk about Amway are unlikely to net any decent results either because of the past reputation. It's an almost no-win situation for IBOs and prospects. For these reasons, I believe it to be nearly impossible to build and maintain a group, especially if your goal is to reach diamond. It seems as if more diamonds have left Amway in recent years than there have been new diamonds. I believe this to be spot on for WWDB, my former LOS. So IBOs, are you ashamed of Amway? If not, why are there still so many IBOs using trickery and deception in recruiting prospects?

If you avoid using the Amway name, what are you ashamed of?




Tuesday, June 27, 2017

Amway Fruit On The Tree?

I had a good chuckle recently when some Amway apologists spoke about looking at the "fruit on the tree" as a way to confirm that various diamonds were successful. One commentator said his parents were broke and he looked at his diamond since the diamond apparently had fruit on the tree. I thought about this concept and I agree, that perhaps we should look at fruit on the tree. First of all, what is fruit? Is it pictures of lavish things or is it looking at bonafide and verified financial statements? How would you know if your diamond was wealthy just because he shows you a picture of a porsche? What if that same diamond was carrying credit card debt and was just creating an illusion of success? Impossible you say? There are verified accounts of diamonds having their homes foreclosed, declaring bankruptcy and other issues.

What if I posted pictures of yachts and a mansion and said Joe Cool paid cash for them? You'd say I was lying or making up stuff. And you know what? You'd be right. I don't own a mansion or a yacht or a Porsche. But when your diamond shows you these pictures, you whoop it up and accept that they are telling the truth. The only difference between them and me is basically our opinion on the Amway business. But think critically for a minute. Your diamond has a financial interest in keeping you fired up. Joe Cool is only interested in sharing information and real life Amway experiences so information seekers can find the truth.

IBOs and Amway prospects, please ask your upline platinum or diamond to show you the fruit on their tree. Ask them to see their (business) financial statements. This is actually a common practice in real business. When a friend of mine sold his business a few years back, he made three year's worth of income tax returns to show prospective buyers. He showed his business and personal tax returns. If someone is asking you to do business with them which will require your investment of time and money, you have every right to ask for information/actual evidence. If your upline won't share this information or evades your questions, why would you believe his slideshow?

As far as I know, not one single bigger pin has ever shown their business financials except for those who had their finances revealed in public documments such as a bankruptcy. In fact, if it made certain bigger pins look good, why wouldn't they want to "show their fruit". They certainly don't mind showing off diamond rings, fancy clothes, sports cars and the like. What many IBOs don't understand is that fancy cars and other toys is no evidence of fruit on the tree. For all you know the cars are rented and the diamond might be drowning in debt. You can also rent jewelry and sports cars.

It has been discussed that some diamonds may rent cars or fancy homes and try to imply that they own these items. Some diamonds, possibly many diamonds in the past have lied or embellished the truth about paying for everything in cash, including their homes and cars. They also at times, have given the audience the impression that these luxuries are all purchased with Amway income, and we know that many diamonds have had supplemental income from the systems, or other business ventures outside of Amway.

We also know that some diamonds are in debt, but simply try to portray an excessive lifestyle. (See Ruth Carter's Book: Amway Motivational Organizations, Behind the Smoke and Mirrors). Some diamonds may have a substantial income, but it doesn't mean they are financially free and able to live a jetset lifestyle that many portray. It is an illusion, possibly to be able to attract new prospects into the business. Do you really believe that you can live a diamond lifestyle on diamond income? DO the math. Even a half million dollar a year income after taxes and business expenses is nowhere near enough to buy mansions in cash. And keep in mind that only about 1 in 20,000 IBO ever reach diamond.

So yes, let us actually see the fruit on the tree. Where is the fruit?

Monday, June 26, 2017

Personal Responsibility In Amway?

One of the disturbing things I have noticed 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 and expend a lot of money following upline advice. Then when they fail, upline will shun them and tell them that the failure is their own. That they are personally responsible for failure.

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 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. But sadly, people who put forth time, money and effort are blamed for their failure when the fact is that the vast majority of people fail in Amway and MLM in general. Amway's own stats bear this out. Only about 1 in 400 even reaches the gold level, where you make just a bit more than the equivalent of working for minimum wage full time.

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?

What is also disturbing is how people will tout the system as responsible for any success, but hide the vast majority that the system don't help. Sure, some will succeed in Amway, but for every success, there are hundreds if not 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.

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? I will pass.

Friday, June 23, 2017

The Sad Reality Of Amway?

One of the things that attracts many IBOs to the Amway opportunity is the idea that they can work part time, 2-5 years and gain a "shortcut" to ongoing and voluminous wealth. Many of the prospects don't have the kind of income or resources that they would like, so the possibility of a shortcut to these trappings sounds like a good idea. They sign up and get started, and then the realities of the business sets in. Upline might be able to justify or deflect the concerns for a while, but eventually, the sad reality will set in.

100 PV, is the defacto minimum quota for business building IBOs. It costs about $300 to purchase 100 PV worth of products. How many young and single people or couples for that matter, use and/or need $300 worth of household products each month? How many of these same people can actually afford to expend that much cash on household products? The pitch is to change where you shop but how many people were buying these kinds of goods prior to Amway? My guess is none. I know I purchased many items, including vitamins, that I didn't need or use before Amway. But my desire to be teachable and to be an example to my downline kept me buying the goods, and trying to pawn off some stuff on friends and relatives to lessen my PV burden. Basically, the 100 PV was just a business expense for me.

I also found that getting people to see the plan was no easy task. While my business was growing, it took more and more effort to recruit downline and I can see where many IBOs would reach the saturation point where there simply aren't anymore viable recruits and they might need to resort to cold contacting in order to generate potential prospects. This is probably why there are stories of IBOs stalking people in bookstores, malls and supermarkets. Even when people saw the plan, there wasn't a high percentage of new people signing up. It is why building and maintaining a business is a nearly impossible task, and it is why I believe there aren't people who retire, walk away from their Amway businesses and enjoy six figure residual incomes for life. This is why maintaining an Amway business is a monumental task.

The more likely scenario is an IBO signing up, buying and using the products and tools and slowly but surely build up debt. There are countless stories of ex IBOs who got fired up, started building the business and found that in a relatively short period of time, put themselves in thousands or tens of thousands of dollars in debt. All the while upline was encouraging them to buy more tools and attend more function, even when they were not profitable. In my opinion, this is confirmation that uplines care more about their tools profits that they do about downline success. I sat in functions where upline would teach about reducing debt, but in the same breath, say it was okay to go deeper in debt if it was to purchase more tools. Self serving advice.

It is why I believe this opportunity, along with the tools system, will nearly guarantee IBO failure. It is sad, but it is also a reality.

Thursday, June 22, 2017

Tax Refunds Are Not Business Profit?

One of the things that I have observed is how IBOs are so misguided by their upline, that they think that their business losses, which result in a tax refund is somewhat like a profit, or that they are getting a free pass with the government footing the bill for their standing orders and functions. In the past, IBOs have been audited and had many business deductions disallowed because the tax department ruled that they were not truly running a business, but participating in a hobby called Amway.

I know that most IBOs are deducting the cost of their training materials on their taxes, but the issue at hand is whether the training materials are resulting in increased sales for your business. If you are running a "buy from yourself" business, then there is a strong possibility that your expenses may not be valid deductions come tax time. If you are not selling products to customers for a profit, then there is a chance that your expenses are not valid deductions. It would be sad indeed to be audited at tax time a few years after you have been an Amway business owner, only to find out that your expenses are not valid and that you may owe tens of thousands of dollars in back taxes.

Another apparently common mistake of IBOs is to think that their business expenses are basically free from the government because they may end up with a tax return. Your expenses are deductible from your taxable income. Thus if you had $10,000 in business expenses, your return would depend on your tax bracket. If you are in the 15% tax bracket, then $10,000 in expenses would get your about a $1,500 tax return, depending on other deductions you may have. But IBOs get duped into thinking they made a score and now get back $1,500 when they may not have had a refund in the past. Obviously in this case, the IBO would have been better off saving the $10,000 and never getting involved in Amway. Some IBOs proudly proclaim their refunds as basically a windfall, almost like it is a profit. That is truly scary.

Folks, there is no free ride. If you are spending money on legitimate business expenses with an intent to make a profit, then there is nothing wrong with that. But if you are traveling to conventions hoping to learn the secret of sponsoring more downline, you could be walking on thin ice should the IRS ever decide to audit your business. There have been many cases in the past where not only did IBOs lose their shirts due to the business support materials they purchaed, but they got double whammied later when the IRS disallowed tax deductions, leaving them in financial ruin. I truly hope you aren't on that path.

Check out this link: http://www.apollowebworks.com/amway/irs.html

"TRAVEL AND ENTERTAINMENT have always been areas of abuse. Sections 162, 262, and 274 are always applicable and sometimes Section 183. Since most of the travel is primarily to attend social gatherings for entertainment and motivational purposes, any real business purpose is suspect. Unless the taxpayer can show that attending seminars, meetings, etc., meets the requirement of Section 162, the travel should be disallowed. Amway people have been unable to show that attending these meetinqs increased their sales. The agendas of these meetings appear to be primarily for entertainment, socializing, and listening to motivational speeches. The meetings have nothing to do with promoting the sale of Amway products to the general public. In fact, Amway distributors are specifically warned aqainst mentioning either Amway or selling when recruitinq potential downline people. Since it is not likely that the taxpayer will increase his sales by attending these functions, then there is not a reasonable business purpose for the trips"

Wednesday, June 21, 2017

The 6-4-2 Plan?

Let’s break down the 6-4-2 plan (Re-print)

Basically, it’s a plan to go direct (platinum) and all you need to do is sponsor 6 of these direct groups and you’re a diamond and will retire early and life in luxury right?

Assumptions: 1PV = 2.5BV. 1PV costs about $2.70.

The 6-4-2 plan has the premise that you do 100 PV, and you sponsor 6 frontline who do 100 PV. Your six frontline in turn sponsor 4 (24 IBOs) each who do 100 PV. And each of these 4 IBOs sponsor two IBOs (48 IBOs).

So your direct empire looks like this:

1 platinum Sponsored 6 who sponsored 4 who sponsored 2 6 1300 PV groups Sponsored 4 who sponsored 2 24 300 PV groups Sponsored 2 48 100 PV IBOs

Total 7900 PV. 7900 PV = (1 PV = 2.5 BV) 19750 BV. 19,750 BV @25% = $4937.50 per month. Annualized = $59,250. Add Q12 bonus 69,250 (platinum group yearly income, not counting retail sales profit. Cost of product (approximate) $21,300 per month or $255,960 per year to maintain 7900 PV.

The platinum must pay his 6 1300 PV groups. 6 frontline 1300 PV = 3250 BV = $390 per month, or $4680 per year. $4680 x 6 = 28,080.

The Platinum keeps 69,250 – 28,080 = 41,170 (net, but not including operating and system expenses, but this includes the Q 12 bonus)

Now, the 6 frontline must pay their 4 IBOs who sponsored two. 300 PV = 750 BV = $45 Per month, or $540 per year. Thus the 6 frontline earn $4680 per year but pay out $2160 downline for a net of $2520 per year, or $210 per month.

Ok, and then each of the IBOs who earn $45 per month or $540 per year must pay their downline (2 each) $7.50 per month, or $90 per year x 2 = $15 month or 180 per year. Thus the 300 PV IBO earns $30 per month or $360 per year.

Let’s review:

1 platinum earns $3430 per month, or $41,170 per year 6 1300 PV IBOs earn $210 per month, or $2520 per year 24 300 PV IBOs earn $30 per month, or $360 per year 48 100 PV IBOs earn $7.50 per month, or $90 per year This is before taxes and expenses, but also does not include retail profits, but hey, we teach buy from yourself right?

OK, let’s look at tools expenses. Let’s say only the platinum, the 6 frontline and the 4 each who sponsored others are on tools (Fair assessment?) That would be 31 IBOs out of a group of 79 IBOs on tools or 39% of the group, and remember that all of these IBOs do 100 PV every month.

Tools cost: KATE, Website, standing order, book of the month, open meetings, monthly functions, major functions (some IBOs have to fly to functions), gas, incidentals, babysitters. Let’s estimate these tools and other expenses to be $160 per month (Very conservative IMO). $160 per month = $1920 per year.

Now let’s review the group NET income.

1 platinum $3430 - $160 = $3270 per month, or $39,240 per year 6 frontline (1300 PV) $210 -$160 = $50 per month, or $600 per year 24 (300 PV) $30 - $160 = <$130> per month loss of $1560 per year 48 IBOs earn $7.50 per month or $90 per year.

Group income = $69,250. Group Tools expenses = (31 x $160 = $4960 per month, or $59,520 per year) Group profit = $9,730 for the year.

79 IBOs putting in 10 hours per week = 790 hours per week or 9480 hours per year.

These IBOs on average made a whopping $1.02 per hour for the year collectively. Or………

The Platinum made $78.48 per hour

6 frontline IBOs made $1.15 per hour

24 – 300 PV IBOs lost $3 per hour

48 100 PV IBOs made 17 cents per hour.

Monday, June 19, 2017

Critical Mistakes Made By Amway IBOs?

In professional sports, whether it be football, basketball or baseball, there are many close games. In close games, a critical mistake made will likely cost your team the game. A good example of this would be a football team trying score the winning touchdown but they commit a game changing turnover. Or a baseball pitcher slips and throws a fastball up in the zone and it gets hammered for a home run. Or a basketball player shooting fouls shots but missing in the last minute of the game. A critical mistake nearly assures you of failure.

In my opinion one of the most critical mistakes that many IBOs make is to ignore the bottom line when analyzing their Amway businesses. I recall, in my experience, business building IBOs, sadly, taught by their uplines to ignore losses, or to view losses as investments into their businesses, or that money is really not important, because you keep building the business and the "money will be there", which is not true. Some uplines may teach that the business is really about making friends or being a nicer person. All of these things may be nice side benefits of reading personal development books or attending functions, etc., but when running a business, the most important goal should be to turn a profit. The sole purpose of a business should be to sell a product or service for a profit. Period.

For many IBOs, their businesses consist of listening to standing orders, attending functions and meetings, but not focused on selling products and earning a net profit. And for most IBOs, nobody can blame them as upline may give them bad advice and because the Amway business is person to person selling, it is so inefficient that many groups end up teaching IBOs to simply buy their own volume and get others to join the business. For groups who operate primarily in this manner, you are probably running an illegal pyramid business because new and existing IBOs can profit only by continuing to add more downline IBOs in the hope that they too, will buy their own volume and sponsor others.

When you look carefully at the business plan, whether it is 6-4-2, 9-4-2 or some other variation, the majority of these business building IBOs will have low volume and likely to earn only about $10 a month. But to earn that $10 a month, you are likely to have to spend $300 on products, and if you are on standing order, voicemail and functions, then you likely spend anywhere from $150 to $250 monthly (or more) to participate in the teaching system. Thus these IBO's bottom line is a net loss! It is only when you are able to sponsor many downline that your losses will get smaller and you will only profit when you have a sizable downline. That means your bottom line is a loss. And while Amway defenders will argue that Walmart doesn't even give you $10 a month, you can certainly get more products from Walmart for $300 than you can get from Amway for the same price. Walmart will match any advertised price on a product that they and a competitor may carry. Also, Walmart's advertising reaching millions of people, which is much more effective than person to person. While Amway runs some ads now days, they do not directly drive customers to IBOs. The vast majority of IBO business is still to themselves and their downline, and not to non IBO customers.

I challenge IBOs to look objectively at their bottom lines. It is likely a net loss. If it is, ask your upline how long this is expected to last. Set hard goals and if you are doing what is advised by upline and results do not improve, you may have to ask yourself what will change to make your business profitable? Basically, if you aren't adding active downlines and customers regularly, you aren't going anywhere and are likely to be running your business at a loss month after month after month. It won't take long before you realize that you have lost thousands if not tens of thousands of dollars. Uplines often say insanity is doing the same thing over and over and expecting different results.

As a former IBO with a 4000 PV business with eagle parameters, I was not making a net profit. I saw my bottom line and although doing and achieving what my upline advised, there was little to no money. I decided the effort, time and money invested wasn't worth it. Plus my upline started to interfere in my personal life. I saw my bottom line and wasn't satisfied, and I left Amway. I later discovered the lies my upline had fed me to keep me in the business and to keep me buying tools. It is why I started blogging. For now, my bottom line is to get the truth out about the tools scam run by upline. That is Joecool's bottom line.