Friday, September 19, 2014

Amway Will "Set You Free"?

When I was an IBO, I often saw my upline diamond driving around town dressed in a business suit. I used to wonder why he keeps working if he can "walk away" and collect residual income? My sponsor told me that the diamond only works because he cares about his downline and wants to help them. So there are two possible scenarios, the diamond is working to help his downline out of a genuine concern for them, or possibly he is working because he has to! The only difference now is that the diamond works the nite and/or graveyard shift, because many IBOs are building the business after the complete their day jobs. This is probably why diamonds sleep until the "crack of noon", because they are working all night!

Now Amway has stated that the average diamond earns about $147,000 a year. That is a decent income, but after yaxes and paying for basic expenses such as medical and dental insurance, the average diamond probably lives a very middle class lifestyle. Keep in mind that a large portion of a diamond's income comes in the form of an annual bonus, thus a diamond's monthly income may be quite small. Yes, diamonds may have other sources of income such as speaking engagements and income from standing orders and functions. But this income depends on the diamond's continued appearances and efforts.

So is it likely that a diamond is "free"? I would have to conclude that a diamond is not free, and may actually have to spend more time maintaining his group than if the diamond simply had a 9-5 job. For one thing, a diamond needs to maintain a personal group to keep qualifying for bonuses. With a poor retention rate in Amway, I am fairly sure that a diamond spends much time recruiting personally sponsored IBOs to maintain this group. Additionally, a diamond must help his six or more groups of downline platinums to maintain their businesses or face the possibility of falling out of qualification. My former diamond dropped down to the emerald level but has since re-qualified at diamond. A diamond must also dedicate time to reward up and coming movers and shakers, to keep them motivated. I got to spend time with my upline diamond when I was considered a promising up and coming pin.

In order to continue to receive tools income, a diamond must also travel to numerous functions and speaking engagements. Although the tools income allegedly doubles a diamond's income, it also adds a lot of expenses, especially if the diamond and his family travel first class to show off the diamond lifestyle, and stays in 5 star hotels. It is probably why diamonds need free transportation to and from the airport and why they stay with friends when traveling as much as possible.

After breaking down projected income and considering projected expenses, I can only conclude that a diamond probably lives a middle to upper middle class lifestyle, and probably works as much as a man with a 9-5 job, except that a diamond works nites and weekends. A good portrait of this is shown in Ruth Carter's book (Amway Motivational Organizations: Behind The Smoke and Mirrors). In the book, the diamond had a net income of over $300,000, but lived in debt, could barely pay his mortgage, and was always on the run from one function to the next. It is very expensive and time consuming to travel from city to city showing off your freedom and diamond lifestyle.

Is this the freedom you are seeking?

Thursday, September 18, 2014

Amway And Motivation?

I believe that Amway IBOs have approximately a 50% attrition rate for the first year alone. If you look at a 5 year window, I believe the attrition rate is something like 95%. So what we're saying is that out of 100 IBOs, only 5 will be around in 5 years, or out of 1000 IBOs, 50 will remain after 5 years. This is extremely significant because if you are a business builder, you will need to replace half of your IBOs every single year. For this reason, I am very doubtful that there are IBOs who "built the business right and built it once", who no longer do Amway related work, but still collect significant residual income. I would guess that significant income could be defined as being enough to live a lifestyle in the top tax bracket (for the US) without having to report to a J-O-B.

Now I understand that some IBOs take it personally when I bring up subjects like this. It is because they have been deceived by some upline diamond or big pin who has sold them on a dream of financial prosperity for life if they will only work hard for 2-5 years. I once thought so too, but realized that there isn't a single diamond that I know of who built the business right and walked away to enjoy the beaches of the world while truckloads of money rolls in. Kinda makes you wonder why you see Crowns still working, and diamonds actually quitting or resigning. I have asked the question many times and it has never been answered. Can anyone name a few people who built their business right and built it once who is currently enjoying these lifelong residuals? Also, if that were a benefit, why doesn't Amway say so?

Instead, you have a constant and endless flow of motivation being sold to IBOs. This motivation comes in the form of cds, books, meetings, functions and other things like voicemail messages. It's sad that IBOs have to continue to pay through the nose for motivation and "teaching" about the Amway business when there are cheaper and more efficient means of communication. For example, why would you need an expensive voicemail when a facebook group account can disseminate messages to your group in seconds at no cost? It is because the uplines want to extract every possible sent from their downline. Because of the internet, I believe people are starting to figure things out and avoid the systems altogether. I hope Joecool's blog contributes to this.

All the motivation IBOs truly need is to see a net profit at the end of the month. If IBOs actually earned an extra $200 a month, or $50 a month, or $600 a month as advertised, there would be no need for motivational speeches. The IBOs would simply look at the growth in their finances and they would keep going. The poor retention rate is easy to explain. IBOs are losing money because of the system expenses and they lose their motivation to continue. If you are an IBO or a prospect, stop and think for a minute. If you are making an extra $200 a month with minimal effort, would you need functions and other materials to motivate you? Or would you have intrinsic motivation from the profit? All the motivation you will ever need is a net profit. Take that to the bank.

Tuesday, September 16, 2014

Amway Friends?

You hang out with friends, generally people you like and have similar interests. You have good and bad times, but your true friends are there for you when you need them. You move residences, your friends are there to help you move. They may play a round of golf with you, or watch some sporting events, dinners, backyard barbeques, etc. These are folks you will likely end up retiring with and enjoying your golden years. Sure, circumstance may break apart some friendships. or moves made out of necessity. But these folks will likely remainas your friends for a long time to come.

But suddenly, you get enticed to join Amway. You see the "chance" to get rich, with a shortcut (not get rich quick, but a "shortcut"). You sign up and your sponsor is your new "best" friend. Most of the people you enjoyed being with think Amway is a questionable venture to get involved in. Suddenly, because of what you have been told or taught, you view these same nice people as "broke" or "losers", simply because they do not share the same ambition of untold wealth working 12-15 hours a weeek. Suddenly, you friends become prospects, or people you want to sponsor so you start recruiting them. Some may join, but most won't. Suddenly you are immersed in recruitment meetings, functions, and avoiding "negative", which is people and events that do not support your Amway business.

Now you are missing birthday parties, barbeques, and other social events. Your social events are now recruitment meetings, seminars and Amway business related events. You are taught that these events can be put off and your gratification delayed. You can do whatever you want when you go diamond. (Even though there me be only one (1) diamond out of every ten or twenty thousand IBOs) Your dedication will pay off right? Sadly, for most people, even very dedicated people, all they will see is losses on their yearly tax returns, mainly due to the purchase of cds, books, voicemail and function tickets. But these are your "friends" right?

Here's my take on it. Try missing a few meetings or functions. Stop buying cds and see how many "friends" remain from the business. It is likely that your upline will claim that you walked away from the friendship by slowing down on the "system". If that happens, then you have conditional friends, or fairweather friends. They are your "friends" while you are pursuing the same cause. They are your friends when you are attending functions. Are they there for you in bad times?

A short while after I attended my last function (I was still an IBO, just not a business builder), my dad passed away. Not a single one of my IBO "friends" bothered to attend the memorial service. Not a single one of my IBO friends called or dropped by the home to pay their respects. All of my "real" friends, who saw through the AMO smoke and mirrors called to talk to me and/or attended the memorial service.

Are your IBO friends conditional friends? Mine were.

Monday, September 15, 2014

Amway And Personal Responsibility?

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. 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.

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 15 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 doesn'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.

Saturday, September 13, 2014

Is Lying Necessary To Promote Amway?

In the years I have been blogging about Amway IBOs and the opportunity, I've seen a lot of deception. As an IBO, upline leaders flat out lied and claimed they made no money off tools. They gave a lot of bad business advice and have never been held accountable for their lies. From what I gather, not much has changed and IBOs are still fed some of the same BS about the business. Amway's biggest defender, IBOFightback AKA David Steadson is a shameless liar wen it comes to defending Amway and MLM in general. When cornered with irrefutable facts, he will resort to personal attacks against myself or other critics. Ironically, the biggest defenders of Amway never seem to have made much of the business themselves. Do you ever wonder why diamonds never "walk away" from Amway to collect the mythical resdiual income?

Amway folks often must spin and justify their ridiciulous prices. Amway's flagship vitamin double X retails for nearly $80 for a one month supply. You can get 3-6 months worth of multi vitamins at WalMart or Costco. Defenders will cite quality or phyto nutrients as their justification, but cannot cite any neutral scientific evidence that their vitamins are better than others. They'll say their products are concentrated as another way to justify the high prices. (I hope you don't spill any while you mix Amway potions) What's also funny is that I don't see the term "concentrated" on Amway's products, Is this claim about Amway's products true or just another lie?

Even the claim of people earning residual income is dicey. While in theory it might be possible for someone to earn residual income, the reality is that the attirtion rate would quickly wipe out any residuals you might earn in the beginning. Like a sand castle at the beach, your income will disppaear quickly. I believe it is for that reason that diamonds and crown ambassadors never retire, but work until their death. The Amway owners however, might be enjoying resdiual income, but that's another story.

So why is lying and deception a part of promoting Amway (for IBOs)? Because the real picture is not rosy. Because without some deception, people would likely not be interested in the business opportunity or the products.

Wednesday, September 10, 2014

Why Amway?

One thing propsects of Amway should ask themselves is why Amway? If you've done due diligence on Amway and MLM in general, it's clear that the vast majority do not make any money with many many people losing money. The disclosures and information all points to that. Yes, some people succeed but they face overwhelming odds and even those who may succeed often find their success short lived. For that reason, diamonds and other hihg pins have quit, rather than "walking away" to collect residual income.

Ask your prospective sponsor how much he or she makes. If you are told "none of your business" or if you are told that how much they make will not affect what you make, it's a red flag. Someone asking you to be in business with them should be prepared to disclose some information. It's a normal business practice. If someone asked you to inest with them, you'd want to know whatreturns you can expect. And you'd want to know the likely return, not only the best case scenario. Yet, the Amway folks will only give you the rosiest possibilities and not the reality. Why is that? Because the reality is in contract to what they are claiming?

If you explore other venues to make money, there are plennty of low risk opportunities. A second part time job whhere you enjoyed the work, a part time business, buying and selling on ebay, craigslist, etc, crafts, handyman work, can provide you more than amway or MLM. Do your research and don't fall for the hype.

Saturday, September 6, 2014

Is Amway Saturated?

Lots of people have opinions about the Amway opportunity and obviously, criticism and defenses of Amway. Amway's been around and in my opinion, is saturated. Saturaton doesn't mean every single person has gotten involved with Amway. When I say saturation, I mean many people have been involved, or have known people who were involved, and/or have been recruited or proepected by Amway IBOs. We also know that with saturation comes stagnation and thess of an ability to find prospects and to make profits.

Look at the US. While there might have been some new diamonds, my old LOS, WWDB hasn't produced any new diamonds in the US as far as I know. I also know that some diamonds have quit, died and left the business. Some Amway defenders might rebutt that by saying there are many new platinums, which may be true, but it is also true that many other platinums may not have qualified as platinum again. If there were truly all these new platinums, we should see new diamonds and other big pins but it seems these folks are quite rare these days.

One the defenses I've heard as to why Amway is not saturated is that there are hundreds of thousands of people graduating high school and becoming adult each year. While that is the defense which might be true, that is also the only reason why Amway hasn't almost completely saturatedm because new eligible people are added to the population each year. If we were to remove people under the age of 30 from Amway, who would be left? There would be relatively few people left if that were to happen.

What happens at saturation point is what we see now. You may get new people in the system, but for the most part, they are just replacing people who quit. Those who are successful in Amway are those who are able to successfully relace those to quit. Without the churn, your business will slowly decline until you cease to qualify for bonuses. Even some of the big leaders at times, see declines, but we might now know because Amway's policy is "once a diamond, always a diamond". Meaning once you qualify, you wear the pin forever.

It is possible to still succeed in Amway? Yes, it's possible, but it looks like it is getting harder and harder, because the opportunity, at least in the US in basically saturated.