Wednesday, June 24, 2009

Amway - Why IBOs Struggle With Moving Volume - They Can't Sponsor Enough Downline!

When I was an IBO, I often found myself buying more goods than I needed because a single person simply has no use for 100 PV worth of Amway goods on a consistent month to month basis, save for eating double x for breakfast or something. In general, Amway's prices are higher than many retailers, because the cost of the IBO bonus is built into the price of their goods. Up to 34% additional markup is needed for Amway to cover all of the IBO bonuses paid to layers upon layers of upline and downline.

Because of this "disadvantage" that IBOs have, it is a very rare IBO that is able to sell enough goods to make an income. Amway admits that only about 4% of their goods are sold to non IBOs. This supports my claim about the prices. Because of this disadvantage, the only other way an IBO can build PV volume is to sponsor downline who will hopefully consume their 100 PV or more.

Then comes the next problem for IBOs. Sponsoring. To begin with, most IBOs are unable to sponsor others. This is where many IBOs have become their own worst enemy. I was once tricked into attending an Amway meeting, and many many others have left comments on blogs expressing the same experiences. Other were outright lied to about the business or were deceived. These practices, while not employed by all IBOs, have saturated North America. It is hard ti find someone in the US who has not experienced, or knew of someone who had a bad experience with an Amway IBO. Because of how some groups operate, there are also allegations of cult-like behavior, and some groups greatly exaggerate the amount of upfront cash needed to register. I understand that signing up to be an IBO can be less than $100 but some groups charge $200 or more, and I saw a prospect who said a network 21 group charged over $600 to register in Amway.

You add in all these factors such as high prices and a spotty reputation and it's easy to see why IBOs cannot move volume and cannot sponsor downline. New IBOs are almost assured of this fate when they register. It is only a rare few who can overcome these major handicaps. And even those who "make it" are often unable to retain their levels for very long. Is this truly a way to generate "residual" income? I think not.


Levi said...

Then other than Amway what other income ventures would you recommend? A person give up more of thier time working another job keeping them even more away from family and loved ones in order to afford the cost of living.

Anonymous said...

Joe, I am always very civil to you and as an Emerald, I have never referred to you as a loser, and I will not start now. But the fact is that any one can sponsor. But several factors that never get brought into these articles are, people skills, proper positioning of the opportunity and thr right target audience.

Sponsoring or selling an IBO number is no indicator as to future success. Without the right elements on oth sides, there is little chance of success. Look at your own "Eagle Parameters" business.

If you're a great salesman and are trying to sell Ferraris in a trailer park, you'll knock on doors for 50 years and maybe sell one. If you're an obnoxious jerk that offends everyone you meet, you can try selling them in South Beach and you might sell a couple.

The bottom line, is that Ferraris are getting sold all the someone.

People are becoming IBO's all the time and there are many IBO's experiencing a degree of success...whatever that may be to them. $500 a month or 5000 a month or my upline Diamond that averages about 75K a month.

Amway is hard work. Always has been, always will be. Technology has made it much easier than it used to be and Amway is always adding more bonus money to the pot, (such as the $150K Founders Emerald bonus that comes in a few months).

The System income is no longer a secret and hasn't been for more than a decade. It has been a wonderful source of on going income for me and many others that I have been associated with for quite some time. If you do it right and treat people right, the payoff is huge.

It beats the alternative to getting laid off these days and searching for a job for the next 6-9 months, while your CEO gets a huge end of the year bonus, or graduating college and serving coffee at Starbucks for the next two years.

Joecool said...

Levi, there are many ways to make extra money that are more lurative than an Amway business. See my other blog archives, I did a whole series on this issue.

Anonymous "Emerald", I appreciate and welcome opposing views here. Yes, selling a Ferrari in a trailer park is probably a bad idea. But you see, the problem is that IBOs think Amway products are a Ferrari. The general public sees Amway products as geenric at best, only IBOs think their goods are the Ferrari. It's like showing a rich guy a Volkswagen and trying to convince him that the volkswagen is just as good, and worth the price of a Ferrari.

And while system income may be mentioned, as far as I know, there is no bonafide written compensation plan involving tools. The lack of a written contract means that a conflict with upline will likely result in non payment, which would mean an IBO who earned tools income would not receive it and would have no recourse.

mike said...

Amway is a busines that requires skills, both in the numbers as well as the people.

Not much is stated about training, other than "The system" regardless if it is free, the system only purpose is to keep people in the business.

A diamond may make 75k per month, how much from a Amway business and how much from selling tools? As well as what business expenses are covered by the 75k.

I wonder what the face of Amway would look like if PB/BV earned was from only retail sales,to non IBO's?

Anonymous said...

If Amway is such hard work, why do uplines try to recruit IBOs by telling them they can spend more time with their families? Its still a job, its still work and clearly you have to spend time WORKING at it to make it successful, which in turn takes away time from loved ones. The whole line of recruitment strikes me as disingenuous, particularly when new recruits believe they are doing something special or outside the box. Its still a job, albeit one that apparently doesn't make most people a lot of money, despite the time and effort put in.

Anonymous said...

"A diamond may make 75k per month, how much from a Amway business and how much from selling tools? As well as what business expenses are covered by the 75k."

As I've said on here before, a Diamonds or Emeralds income can more than double with system income. (Tool Breaks, Speaking fees, Function numbers etc.) If you think you're exposing something, you're about 15 years behind the game.

And while I appreciate the romantic fantasy that you have going on with Gina, that she is this powerful business leader and a powerful woman, rather than a girlfriend scorned or one that lost her BFF from Happy Hours at Chi-Chi's, that would be your eHarmony hook up, by catering to her parrot like mantra about P/L's and Balance Sheets, but one does not have to have a guest appearence on Apprentice to realize that if you make 25-55 or 75 a month or more, your keep is far superior to take home pay that a cube dweller brings home.

Joecool said...

Anonymous, I think you completely missed the point. No one disputes that a diamond or some big pin might make good money from Amway. The issue is how many IBOs lose money buying tools in order to make that happen. Amway itse;f said less than 4% of their goods are sold to non IBOs. That means a diamond or bigger pin is making their fortunes off the backs and jobs of their downline.

And Gina's contention is that so many IBOs brag about their income from Amway but can never explain how much they make or what expenses with incur to make that money, thus the talk about a profilt loss sheet.

Anonymous said...

Joe, I've said before, that the reason for that, is that 99.9% of IBO's that get on these sites and go to battle over how successful they have been in the business, have probably never made a dime. The people who are successful, have very little interest or time to banter back and fourth. The same goes for those who spend their time, arguing with IBO's. The people who left the business and became successful, have better things to do as well.

Here's a tip in Amway or out; If you have to brag about how successful you are, you probaly aren't.

Gina, if that's the girls name, demonstrates all the typical characteristics in her posting of a girl thats a couple of years out of college, that grabbed on to a couple of phrases from business class and adopted it as her mantra.

She has provided nothing to demonstrate that she is worthy of seeing anyones records.

Joecool said...

On the contrary, I believe Gina has provided valuable insight for new IBOs. It is certain upline who teach IBOs to ignore expenses that are the problem. Maybe upline should teach IBOs how to run a business instead of trying to show them why to build a business.

rlaurens said...

Not only Gina, but I too have provided a quick 10-sec cut-and-paste of my company P/L. Can any IBO show any company that doesn't keep financial records?

mrmaximum said...

"The same goes for those who spend their time, arguing with IBO's. The people who left the business and became successful, have better things to do as well."

Then again there is one thing about the business that can be said. It is amazing just how much damage can be caused by that little red white and blue box of soap. If this was simply a business that didn't live up to it's promises, then Anon3, you have a point about pointless banter. However, you may want to read some of the stories from and realize that some poor people out there in the world lost a lot more than money. Some have lost homes, relationships, marriages and even the ability to have children as they waited to long 'building the business' and their 'time ran out'

This is more than just an opportunity which has gone bad, or simply has very poor chances of success. This can be something which can change your life forever and not in a good way. This is why critics "banter on" about this business.

Gina said...

"Gina, if that's the girls name, demonstrates all the typical characteristics in her posting of a girl thats a couple of years out of college, that grabbed on to a couple of phrases from business class and adopted it as her mantra."

LOL....really? Wow you IBO's will attempt anything to diminish the validity of someones views that are contrary to your own. I have demonstarted that I know more of business than just that of a basic business class. Feel free to prove otherwise.... you IBO's tend to come across like the bully on the playground in elementary school....silly really.

"She has provided nothing to demonstrate that she is worthy of seeing anyones records."

See now this type of blatant ignorance is what is at the heart of so many IBO's problems. There is never a issue of being worthy of seeing anyones records...they are supposed to be a factual and accurate picture of ones business....they can be quite boring actually and there is no waiting with baited breath to be granted the good graces to see such records. I can not understand what you IBO's take issue with? These are simple and basic business tools. You all say how great and how well you all do and how well the biz works, but you will find any reason as to why you can't produce such basic business items. Why not simply prove it? Companies produce these documents yearly for the world to see and there is nothing of private nature on them. You IBO's tell people that if they do as they are told ect ect that they can make so much money and how the business will work if they work it but you yourself can not show someone that doing as they are told is worth while or that the business will in fact work if they work it. Business is different for everyone depending on how tey work it but one can always see the necessary information that will allow someone to see their potential depending on how they decide to work it....yet you IBO's STILL seem to find every and any excuse why you can't produce them. Some one sure can't demonstrate something here....but it's not Gina.

Levi said...

Hey pedestal Girl, and rlaurens, Post your p/l cause i sure have not seen it. are you a fraud? how does your savings account reflect your statments? are you barely above water like most americans? prove it, show me your savings accouts are actually increasing instead of barely alive.

Gina said...

LOL....barely above water like most Americans!!!! LOL....

So when has anyone questioned your persobnal finances? Business finances is one thing....personal is another.

But to answer your I am not just keeping my head above water....I am quite comfortable. No debt other than my credit cards, many "toys", a lot of time with the family, time to travel...ect. Very happy with things actually. I work hard but know how to live while doing it....IBO's can not say the same. And why does what I have monetary wise change for you? You will just bash me for being more fortunate than you. It doesn't matter to you where one has come from or what they have can't see past your own nose.

Levi said...

Gina thats cute, but anyone can be anything here online. its nice to write a lifestyle but like you say to us. Prove It.

It is likely you are not more fortunate than me, I am starting to believe you are just a good writer and story teller who has a strong memory of her notes from college.

While most americans dont live comfortably and dont have thier head above water it is like you hearing an IBO saying they make a profit at this business when you know most dont. So Prove It.

Anonymous said...

Why is everyone complicating matters. Go out and get a real job or a real eduction and stop this waste of time from colourful websites like Amway that just take your valuable time for nothing. Its simple. If you are hard working and ambitious you can make it anywhere. No need to get conned by time wasting websites. You can make it in the real world in a real company. If these companies where so 'it'then the whole business world would drop everything and do what they claim to be the money making tool of the century!!