Wednesday, June 10, 2009

Amway - Buy From Yourself?

In a recent exchange with an Amway apologist, we debated the merits of buying from yourself. Here's the exchange:

Joecool: Nobody actually makes money buying from themselves. In what other business besides Amway do people teach business owners to buy from themselves almost exclusively?


Awesome!!! said...
Not true Joecool. If you own let's say a car factory making sports cars, you would turn to one awesome car your factory does make, maybe even custom made. So, you end up buying it from your own business. To me that just makes sense. Only to a blind man does that not make sense.

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Joecool's commentary: It is apparent to me that IBOs like "Awesome" are compleetly fooled by upline teaching about "buy from yourself". If I owned a car factory and I bought a car from myself, I would make nothing. If it costs say $20,000 to make a sports car, and I purchase it from my own factory for my cost of $20,000, I made nothing. In fact you could say I took a loss because I still had to pay the factory workers to make the car.

While it may seem plausible to buy from your own store, that is not the key to the success of the business. The key to the success of a business is selling your goods and services to customers! A friend of mine used to own a franchise food business (not McDonald's) and frankly, he could not stand eating at his own retaurant. The only product from his restaurant that he consumed regularly was diet coke!

Folks, there is nothing wrong with supporting your business, but you will not be successful if you are the primary customer of your business. Do the math and it's easy to see. When you buy from your "IBO-Ship", the biggest beneficiary is Amway, who makes or sells the products. The only way to overcome this, is to sponsor enough downline who will do the work and suffer the losses on your behalf.

That's how Joecool sees it.

18 comments:

Gina said...

wow....sometimes I can not believe that people will actualy fall for that line of BS.

Lets break it down for our misguided friend...

You own a car factory...
It costs you, the owner, $10k to produce one car...completely...materials, employees, ect...

You sell one of those cars for $15k to dealers who in turn sell the car for $20k...

Now you decide to buy one of your own cars...you have a choice
A) you buy it for cost $10k
B) you buy it at dealer cost for $15k
C) you buy it from a dealer for $20K

No matter how you go it costs you $10k to make the car

In choice A) you spent $10k...no profit made, and sale is calculated as it should be, for personal use and does not effect sales numbers, in other words if the car you bought is one of 10 cars you made and sold then you need to adjust those numbers and everything that relates, accordingly to reflect the sale of 9 cars.

In choice B) you spent $15k total. Subtract $10k for the production and you have spent out of pocket,,,$5k

In choice C) you spent $20K total. Subtract $10K for the production and $5k that is paid to you by the dealer for the car and you spent $5k

Now, in all cases you the business owner would need to pay taxes on that car.

In none of those cases does the business owner make any money and in the very least spent $10K.

So while buying from your own store sounds like a good idea to support your business, it doesn't provide profit and does not help your sales figures.

Levi said...

But do the math like I showed on my blog where you duplicated 50 pv's buying from yourself. Your only obsticale becomes saturation and quite honestly with sites like these and people like gina throwing nothing but trash at the good in Amway along with our corrupted diamonds and the failure rate saturation might never get reached. plus if you duplicted my theory every 6 months you could never saturate in a life time and Amways 2 to 5 year plan would be true. But go ahead Gina Bash this away too. spit spit spit is all you do.

Joecool said...

Levi, the duplication works great on paper but not so great in real life. Many people, even without being in Amway, have a bad impression of Amway because they know of someone or experienced an unethical IBO. They may have been lied to or tricked into attending a meeting, or heard of a close friend who had that experience. You can find these kinds of stories all over the internet.

Anonymous said...

Joecool, I have been following your blog for awhile, because someone I know recently got involved in Amway and I wanted to find out more about it. I looked online for positive info and negative info and interestingly I found a lot more negative info about Amway.

Anyway, if I understand this analogy correctly, IBOs don't 'own' the car factory. They buy the car from the car factory as the distributor in this analogy and THEN THEY BUY IT AGAIN. So they are really out $40k.

If I understand this correctly, IBO's buy products to sell to other people but are also encouraged to buy those same products that they have already bought from their own stock or 'store', hence, buying from themselves. So they are essentially buying the same product twice. Is my understanding correct?

Maybe they recieve a small commission check from the sale to themselves? I'd still rather go to Walmart, buy a similar quality product for less, and only have bought the product once.

Gina said...

Duplication of what? Making purchases through your own store and inaccurately counting them as a sale? That works great for what? Are you saying your business is built off downline making the mistake of purchasing products for personal use and then not subtracting those sales from the figures? Sound's like your are venturing into illegal pyramid territory....but then again its no big deal for someone like Levi who has experience in the field.

Awesome!!! said...

Gina and Joecool, this might help out

www.quain.com/products/prosumer

Levi said...

But it actually works without a commanding upline telling you to buy cd's go to meetings and running your life. I don't care if you have been lied to, it's a cruel world out there and business is tough but facts are facts the duplication works and is proven to work off paper but diamonds destroy that good work when they go for more money overpromoting tools.

Joecool said...

If you buy from yourself, where does the profit come from? Isn't it going from your left pocket to the right pocket?

"Prosuming" is some lame theory thought up by Amway promoters.

rlaurens said...

Prosumer?? Professional consumer?!?

What's this "If I own WalMart, I won't buy from K-Mart" crap?? If I can get a gadget from K-Mart that cost less than from my own store, of course I'll buy it there, AND THEN SELL IT AT MY STORE FOR A PROFIT.
Better yet, find where K-Mart got their stuff from and order from their distributor.

Is this concept too hard to grasp? Then we can forget explaining about 'incremental cash outlay'...

Gina said...

Anon...

this is how it works...

In order to reach a certain PV level IBO's purchase products from Amway using their IBO# thus running it through their own "store". Lets say they spend $100.
IBO's then count that $100 as a sale...so while they have a supposed sale of $100, they spent that out of pocket and are using the products instead of selling them and therfor not a sale. Then at the end of the month Amway sends the IBO their bonus for reaching certain levels of PV...that includes for the $100 spent for the personal use. Most IBO's consider that bonus to be profit....no matter the circumstances. Then they try to justify it with things like "being a prosumer" and "have to support their own store", while not facing the reality that they spent $100 and got back say $20 in bouns, then it means they spent $80 on products, made no sale from it or profit from it....but they have been brainwashed to believe otherwise.

Gina said...

Levi said...
"But it actually works without a commanding upline telling you to buy cd's go to meetings and running your life. "


CD's are irrelevant in this case. They haven't even been mentioned. You can't build a profitable business on "prosuming"...you need retail customers....period. There is no magic, no lies, no what ifs, just plain and simple reality. If you are building the business this way you are validating every critics argument on how this biz doesn't work and also breaking the retail sales rule.


"I don't care if you have been lied to, it's a cruel world out there and business is tough but facts are facts the duplication works and is proven to work off paper but diamonds destroy that good work when they go for more money overpromoting tools."

At least have your facts straight before you assume someone has been lied to. Prove it works off paper....simple PROVE IT...you know how to prove it? Say it with me now....A P/L!!!! It is a simple request, businesses do on a daily basis....present an accurate P/L....but as usual you IBO's come up with some off the wall reason why you can't, shan't and won't.

Awesome!!! said...

Joecool, Gina & rlaurens,

Are you The Trinity going by the name of Bill Quain?

Levi said...

Gina, and you think that by talking to me like that is supposed to get a calm answer? we are human beings here, you don't have to act like people like us are below you. that is why you get the comments like i give to you. the only way I can prove it is with the downline i have begun to build. and when I do get up to diamond I will probably make money selling tools too. why because it is there, will I promote tools before you make profit to do so? No, If you cannot afford the educatin why try to bankrupt yourself in order to learn a lesson? Gina I have posted one P/L, as I grow I will send you more, maybe a bit more detailed. but know this, I dont care what you think

Gina said...

“Gina, and you think that by talking to me like that is supposed to get a calm answer?”

Talking to you like what? I think you will see that I am responding exactly as you…except I have factual information to present and speak the truth. I guess for someone who is lying, being faced with that would not get a calm answer.

“we are human beings here, you don't have to act like people like us are below you.”

I don’t, you spend most of your time putting yourself below me. A good majority of your comments are all about how you are less fortunate, uneducated, a felon, ect. I didn’t put yopu there.
“ that is why you get the comments like i give to you.”

No, I get comments like that because for you the truth hurts and you have no other defense other than to react childishly.

“ the only way I can prove it is with the downline i have begun to build. and when I do get up to diamond I will probably make money selling tools too.”

Good luck to you. But let me ask a question, how is it you can vehemently defend a business opportunity and its results if you have no proof said results are possible and worth the time and effort?

“ why because it is there, will I promote tools before you make profit to do so? No, If you cannot afford the educatin why try to bankrupt yourself in order to learn a lesson? “

I do not understand what you are trying to say here.
“Gina I have posted one P/L, as I grow I will send you more, maybe a bit more detailed. but know this, I dont care what you think”

First if you are referring to those odd numbers you posted in another thread then that was anything but a P/L. Please, please ,please, take the time to look up what a P/L is and what is on one before assuming anything about my comments…I have never and do not now expect you to blindly believe what I say…do look it up. And you do care what I think….that is why you are here on this blog, that is why you get defensive and that is why you resort to name calling.

Anonymous said...

Gina,
I get what you're saying, but what I don't understand is this:
The IBO is still purchasing $100.00 worth of product that could likely be purchased through your local WalMart (similar products), for $65 - $70. So why, in today's lousy economy in particular, would anyone buy from Amway at elevated prices?
How can the IBO's not understand this?

rlaurens said...

"Are you The Trinity going by the name of Bill Quain?"

Who is Bill Quain? Anybody special?

Anonymous said...

Amway takes advantage of poor idiots like this guy (Levi) with promises of fortune and success. Well, Levi, I'm sorry no one told you, but in this life there is no such thing as easy money. If your spelling and grammatical errors are an indication of your education level, I suggest dropping the Amway bullshit, going to college (or finishing high school in your case), and getting a real job. Here's a dose of reality: No one wants to buy ANYTHING from a friend or a family member, and nobody wants to buy a sub-par product (and wait for delivery) when they could just as easily go to the grocery store, and procure a better product for less. Amway is just another scam MLM 'legitimized' by a product; fools take heed.

This is funny:
http://marriedtoanambot.blogspot.com/

Anonymous said...

Why does Rolex cost more than Timex? Have fun shopping at Walmart. You fit with the crowd I am sure.