Tuesday, June 16, 2009

Amway - Why Most IBOs Fail

Most IBOs fail. That is not a wild guess. That is a fact. Amway supporters will argue that many IBOs do little or nothing, and while that might be true, even the remaining IBOs who work hard, still find little or no success. The system is set up that way. If you see a diamond "walking the beaches" as the cash rolls in, that means someone is putting forth the effort to make that happen. It is the downline IBOs who purchase Amway products and tools that allow these diamonds to enjoy what they portray as success.

We also know that some diamonds overhype their success. There has been evidence that the diamond lifestyle is often not what people think it is. If you could truly earn residual income by the bucketload, why do diamonds quit, resign, lose homes in foreclosure proceedings, and even wind up in bankruptcy court? One could argue that some diamonds are failures. The diamond lifestyle is an illusion created by upline leaders as a means to entice recruits.

Many Amway zealots and apologists try to make ridiculous claims comparing a company owner to a diamond. The big difference is that a company owner has employees who get a regular paycheck. These employees generally wanted the job and probably applied for the work. And if and when an employee leaves, there are other applicants who are willing to step in and do the work. Thus the business continues to meet their demands and continues to profit.

In the Amway opportunity, the IBOs spend money purchasing products, and then upline leaders expect these same folks to spend even more money to learn how to be motivated to do the Amway business. But in reality, if IBOs made profits, that would likely be sufficient motivation to run their businesses. Because it is hard to find enough (suckers) IBOs to join the business and fork out cash while they lose money, other IBOs have resorted to trickery, deception and outright lying at times, in order to attract potential downlines.

The 6-4-2 system ensures that the majority of business builders must "do the work" to uphold their platinum, who (probably) barely earns a net profit. And then you need 3 or 6 groups of IBOs losing money in order to maintain an emerald or diamond.
Amway has revealed that less than 4% of product moves to non IBOs. The absence of non IBO customers nearly guarantees that most IBO groups will lose money or make very little. Most IBOs are destined to fail. And it is not necessarily the IBO's fault. The system itself comes with many flaws which most IBOs cannot overcome, even for those who put forth much effort. It is why most IBOs fail. It is why I hope prospects will find and read this information before making a final decision to sign up or not.

23 comments:

Anonymous said...

JoeCool, you are a failure. Your a bitter loser who failed in Amway and you don't like it so you bitch and moan on this blog. Why don't you get a life and do something productive with your life?

mrmaximum said...

Anon, thank you for your contribution to the critics efforts in making prospects think twice about the Amway opportunity. Because people usually don't become belligerently defensive over a business idea which actually works. It always helps when an IBO posts a comment proving Joe right about his observations about the business.

Keep up the good work!

Gina said...

Ah yes...yet another comment inspired and fully created with all that integrity and morals IBO's are quick to claim to be in possession of. If only...

Joecool said...

I laugh when IBOs assume that anyone who has an opposing viewpoint on Amway is a failure or a loser. I should reprint my series on things you can do to make more money than an Amway business. Things like pan handling and/or a minimum wage part time job. You know, lucrative ventures like that.

MichMan said...

Anon,

Have you ever heard a Diamond say, "Observe the masses and do the opposite"?

What this article suggests to me is that if you look around and see thousands and thousands of people getting in the business, spending lots of money on tools and eventually quitting, maybe it's a sign to try something else.

Oberserve the direction that the masses of ibos, and do the opposite. Instead of spending one Saturday per month in a seminar to pump up tool sales, go out and get three new customers that day.

Instead of spending thousands going to 3-5 out of state conventions each year, spend the same effort expanding your customer base.

Then you MAKE money, instead of spending it.

Awesome!!! said...

Oh yes Joecool, you should DEFINITELY reprint your series on things that make you more money than an Amway business such as panhandling, sleeping, doing nothing, minimum wage part time job, blogging on the internet... you know my darling? If you honestly BELIEVE in these alternatives, I won't comment any longer on just how disturbed and miserable you are for a human being. I will stop right here, right now.

I came to the conclusion that our discussion has been a waste of time for me. For you it seems that it doesn't really matter. That's cool. I regret I took all this time to have a resonable conversation with you. There's no reasoning aptitude in you whatsoever and that's where I put the point to this discussion.

quixtarisacult said...

What is Amway Global's corporate secret of success?

Isn't it P.T. Barnum's assesment that "there's a new sucker born every day?

Joecool said...

Awesome, you are a funny guy. Instead os making disparaging comments, why not prove that you make more money than a panhandler or that you make more moey than someone taking a nap?

What's that? You can't?

Gina said...

LOL...and he thinks he had engaged a discussion...LOL

Levi said...

Many people I know in this business make more than a panhandler or minimum wage even after their P/L report. will they waste their time posting here? of course NOT. Mainly because of numb minded commments such as that one. Its like saying all employee's of walmart make minimum wage, when we know that not true even though the majority may make minimum wage.

Levi said...

quixtarisacult, so what is your secret to success? yeah i thought so, anything you really want to type out for us. how about you prove a P/L report on what it is you do. By the way Gina show us what yours looks like.

Levi said...

mich man, yeah you are slightly right except maybe you should not spend more money than you can afford on tools like the thousands do and focus on selling products. our contry's sales force was founded on the door to door salesperson. yet somehow I see more and more people looking for an easy way to make money without any effort. you can't buy tools and miraculously make money. I dont buy a ratchet set and expect to never have to use it to fix my car.

Joecool said...

Levim a ratchet won't fix your car, yes. But a mechanic expects the ratchet to work if he uses it. The Amway tools don't work.

Gina said...

"By the way Gina show us what yours looks like."

I already have...a few times, but have yet to see even one from an IBO or for that matter and IBO name the categories found on one. In fact how about an IBO detail how to figure COGS? Or how about an IBO understanding the simple fact that buying from yourself isn't a sale and any "rebate" associated with it is not profit. Or how about an IBO try to explain the logic behind the statement "profit before expenses"? When an IBO goes that route I will post my P/L yet again. Its all about a little give and take....so far I have given but IBO's are yet to reciprocate.

Gina said...

"mich man, yeah you are slightly right except maybe you should not spend more money than you can afford on tools like the thousands do and focus on selling products"

No, he is 100% right. The tools are sold in a manner that IBO’s need them and those who distribute said tools have experienced success doing what every other IBO is doing….problem is that they really aren’t and haven’t.

"our contry's sales force was founded on the door to door salesperson. yet somehow I see more and more people looking for an easy way to make money without any effort."

People are looking for an easy way to make money because that is how Amway is presented. In reality IBO’s work ungodly hours for less than minimum wage…that is not how it is presented.

"you can't buy tools and miraculously make money. I dont buy a ratchet set and expect to never have to use it to fix my car."

No, your right, you cannot buy tools and expect to make money….problem is that a majority of IBO’s are told otherwise.

Levi said...

no one that comes to a blog for advice on a business should be joining one anyways. If you do you are probably the same person who gets dates from the bathroom stall, get my drift?
non ibo' are just as retalitory as ibo's. attck anyones position enough they might hold composure but I will never hold to an attack.

Levi said...

Earnings
Type
Business
Country
Amount
Performance
$65.86
USE
Gross Profit
$67.64
USE
Total
$133.50
Purchases
Type
Business
Country
Amount
Purchases
$448.13
USE
Total
$448.13

with my purchases not reflecting my Direct Sales profit. I did my taxes this year and filed dead even. that came also at the fact that i also used products for myself which would have been free since my income covered it. now this is my first year without recruitment. now wanting to branch out it looks as though this year should yeild a much better result.

now Gina I show you mine you show me yours

Levi said...

joe you dont work, in my downline yes they do.

Joecool said...

Levi, if you filed taxes and broke even, that means your business didn't make you any money. Why is that a good thing?

Gina said...

Ummm Levi....those numbers mean nothing.
Where are your expenses? Where are your total sales? Where are your net sales? What portion of the total sales where used for personla use? What portion was used as freebies or samples? What were your margins? Where did that gross profit come from? And is any of these numbers yearly monthly, weekly?

So, does this mean you don't actually keep a P/L despite saying that you do?

Levi said...

Gina that is how you do a p/l report I sell 3 products and go back and buy 4 so on and so on building and building while sometimes i admit i take from this profit to cover some expeses from time to time since my primary is not good enough. but it is still kept in my budget which quite honesly includes personal family information that I will not be disclosing to you or anyone on a blogging network. thanks

Gina said...

http://www.smallbusinessnotes.com/operating/finmgmt/financialstmts/incomeexample.html

This is a very basic sample P/L...it doesn't matter if you have 2 sales a year or 1 million....you always track them this way. There are ALWAYS expenses...no matter what.

Feel free to look up others....

Anonymous said...

Joecool

As you know at least people at a minimum wage job is assured a paycheck every week. Know very few that get a paycheck every week that are involved in MLM. Keep on fighting Joe.