Wednesday, September 30, 2009

Amway - Financial Freedom?

Financial Freedom! That was one of the major battle cries when I was recruited for the Amway business. You gain control of time and money by creating residual or passive income. That is true financial freedom. You wake up at noon, no job, and just do whatever you please, whenever you please. I remember the speaker saying that broke/unemployed people also had freedom, but it was different because they were broke and could not afford to go golfing or do other activities that required money on a regular basis.

I am assuming that this is still the cae for many IBOs. Of course, upline leaders may toss in a disclaimer that you don't get rich quick as an IBO, but the pitch apparently still contains the financial freedom and residual income theme, based on my experiences with IBOs.

But hey, financial freedome would be a great thing, don't get me wrong. Who wouldn't want to be 35 years old with enough cash to never have to work again? I mean I could spend some time imagining how fun that would be. I mean it would also be fun to imagine what you would do with all the cash if you hit the powerball lottery as well. But for the starry eyed IBOs, I simply have a few questions for you to ponder. A few realistic questions that you should be asking yourself. The answers to these questions will tell you a lot.

1. Who in your group or upline truly has achieved financial freedom? Have you seen their financials or simply a display of wealth such as mansions and fancy cars? Mansions and fancy cars could just be a massive pile of debt. Not too long ago, there apparently were diamonds who had their homes foreclosed, and a triple diamond who was in bankruptcy proceedings. Find out if anyone in your group/upline has actually achieved the success that they are using to recruit you. Also, if they are financially free, why do they work at function after function? Traveling and speaking might not be a traditional job, but it is still work, nonetheless.

2. Even if you find someone who is retired and golfing everyday because of Amway residual income, ask yourself what the likelihood is that you will be able to achieve the same results. If diamonds are still working, what chance do you have of success if you are new or experienced in Amway, and have few or no downline. More than likely, your chance of winning the lottery will be greater than your chance of achieving a significant residual income from your Amway business.

Tuesday, September 29, 2009

Amway - Dead Or Broke By Age 65?

Below, I have posted a recent article indicating that about 1/4 of Americans are working beyond the age of 65. That certainly debunks the IBO myth that 98% of people are dead or broke by age 65. It should be noted that the older folks still working make very good money. More food for thought should be how you as an IBO will benefit from the Amway business if you are not making money or if you are losing money due to continuous purchases of "educational" materials.

A Quarter of Americans Still Work After Age 65
Comment By Emily Brandon

Posted: July 14, 2009

Retirement is a thing of the past for a quarter of Americans over age 65. Just over 25 percent of those between ages 65 and 74 were still working in 2008, according to the latest Census Bureau numbers. And amazingly 9 percent of Americans still go to work between ages 75 and 84. After age 85, the number still working trickles down to 3 percent or about 122,000 people who continue to hammer away at their keyboard or punch in with their time clock.

Most people over age 65 still in the workforce are professionals (20 percent) or hold management positions (19 percent). A large portion of seniors also work in the service industry (18 percent) and sales (15 percent) or have office jobs (12 percent). But a few retirees also manage to do sometimes strenuous jobs such as production and transportation (12 percent) or construction and maintenance (5 percent).

Many of the seniors who continue to work full time have earnings at the top of the pay scale. About 20 percent of those age 65 and over make over $75,000 annually and just over half (53 percent) earn between $25,000 and $75,000 from work. Slightly over a quarter of those working full time in retirement make less than $25,000 annually.

Monday, September 28, 2009

Amway Global - Triple Diamond Bankruptcy?

WWDB Triple Diamond, Greg Duncan, apparently in financial difficulties. Although he appeared to have declared net assets of 63 million, it seems he cannot round up enough cash to pay his creditors. I wonder how much conviction Mr Duncan has these days when talking about his financial success? :-)

It started here:

And then:

And now:

Amway - Upline Mentors or A Bunch Of Crooks?

One of the things our upline told us when I was an IBO was how much they cared about their groups. My sponsor told us that these wonderful diamonds could be anywhere, doing anything, but they chose to be at these functions out of love and loyalty to the group. At the time, upline insisted that nobody earned any money from the sale of support materials. I wonder how many of these wonderful upline mentors would have been at the function if they lost money or made no profit from the functions?

Shortly after I left the business, the lies about the tool income became exposed and the internet also made it easy for prospects to find out this information. Of course, many upline started to talk about tool income, although there is still a great deal of secrecy about the tools and the income generated by tools.

What I find humorous is how some IBOs actually think their upline is some kind of mentor to be followed. As time passes, we are finding that many diamonds are fakes and frauds. There are many "former" diamonds, clearly debunking the myth of lifelong residual income. We are finding diamonds who divorce, contrary to the teaching that Amway saves marriages. Diamonds who are in financial difficulty and some in apparent bankruptcy.

Now these diamonds are no different than the rest of society, but they made much profit in selling themselves as being "above" the crowds. Thay they were financially well versed, that their marriages were built on a foundation of rock. That their lives are in order and that these diamonds are to be honored and copied by their downline faithful. But slowly and surely, they are being exposed and hypocrites and we are finding that they are not living large and debt free as they claimed. They are being exposed as a bunch of crooks with nice suits and nice smiles. It is unfortunate that some of these diamond leaders are suffering misfortunes, but I have trouble drumming up sympathy for them at this point.

So is your upline a mentor to be followed or just a cheap crook?

Friday, September 25, 2009

Amway - Do IBOs Intend To Profit Or not?

I have been blogging for 5 or 6 years now and one thing I still cannot understand is whether or not, IBOs think it is important to make a profit. I hear stories about how IBOs are nicer people (although it doesn't show in many cases), how they make so much more money than before, how their lives are better, etc etc etc.

Now I know I joined Amway some years ago for one thing. That was to make money. If the plan said I could be nicer or make more friends, I would have quit or not joined at all. When I joined, I had been in my career for only about 9 years or so and thus, I was not at the top end of the pay scale, thus a few hundred a month more looked attractive.

I remember seeing the plan and thinking a diamond is a tough level to achieve. But I heard that a 2500 or 4000 could make up to $500 to $1000 a month. I was pretty sure I could reach those levels. And I did. But at the 4000 level, I made no money and I asked upline. I was told that the money would be there if only I would keep growing. I said wait a minute, where's the money that was supposed to be there?
(I'm from Hawaii so mainland functions ate up much of my profits). Upline told me to just keep going and the cash would be there. So I ignored losing money or breaking even at 4000 PV and I finally quit when my sponsor told me that I needed to submit to upline and really get plugged in to succeed. That pushed me off the edge (along with some other factors) and I quit.

But I ask this os IBOs, and new prospects. At what point do you expect to profit from the Amway business? And if you do as advised (told), at what point do you question that advice if you do not achieve what was advertised? If you spend money on standing order and functions and achieve what you were advised to do, why shouldn't the results be what was advertised?

If you truly believe that profit in business is not important, maybe you need to ask if you intended to profit or not. Seems upline is good at making people think profit is not important.

Thursday, September 24, 2009

Amway - College Graduate Earnings Vs. IBO Earnings

According to a U.S. Census Department study entitled "The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings" (, over an adult's working life the following are average lifetime earnings based on educational level attained:

High school graduates - $1.2 million
Bachelor's degree - $2.1 million
Master's degree - $2.5 million
Doctoral degrees - $3.4 million
Professional degrees do best at $4.4 million.

In 1999, average annual earnings ranged from $18,900 for high school dropouts to $25,900 for high school graduates, $45,400 for college graduates and $99,300 for the holders of professional degrees (medical doctors, dentists, veterinarians and lawyers).

Given empirical, verified and objective data demonstrating that a college education more than pays for itself, it is foolish for someone to suggest that they can't reasonably expect a return on their investment in a college education. It would take a real moron to suggest that they could exceed that return by wasting their time building an Amway business. Especially given the data showing miserable average results.

As far as the cost of that education and the implication that a person will incur massive debt, that too is a complete fabrication.

For those of you interested in the actual data on student loans and the effect of a college education on earnings, look here:

and here:

and here:

Oh, and if you are an "average" IBO, spending 40 years working Amway with the average earnings of $115 a month, your career of 40 years will gross you $55,200.

Tuesday, September 22, 2009

Amway - Amway And The Better Business Bureau?

Over the years, I have seen literally hundreds (if not more) blogs and testimonials about Amway. Most of them decry the pitfalls of being an Amway IBO. Most of the complaints cite the fact that Amway in general has higher prices than comparable retailers and the fact that the system consisting of voicemail, books, cds and seminars ate up any profits the IBO may have made and resulted in net losses for most. One particular Amway apologist bemoans the fact that the internet is full of bad testomonials about Amway. The reason why there are so many negative testimonials about Amway is because over the years, thousands, possibly millions either had a bad experience for the reasons I cited above, or personally know of someone who had a bad experience.

Amway defenders will often cite the fact that many IBOs sign up and "do nothing" as their defense to this. But I will easily point out that I haven't seen anyone say they signed up, failed to do anything or order products, quit and started blogging about a bad experience in Amway. These defenders will also compare Amway to the gym where people sign up and "do nothing". Whether true or not, I also do not see people who sign up and "do nothing" complain about not receiving health benefits by simply signing up. It is a very weak defense. Conversely, I have seen numerous accounts of folks like myself who did put in effort, some for many years, who did what upline advised and did not see the financial rewards that is promoted in "the plan".

Amway defenders will then try to justify themselves, saying that the better business bureau (BBB) receives few formal complaints about Amway. I will agree with this. Many IBOs never bother to file formal complaints to the BBB or to Amway because in many, probably most cases, the person who quits and may have had a bad experience, was sponsored into the business. The sponsor was often a friend or family member of the IBO who left the business. Many will simply leave and forget the episode and chalk it up to a learning experience in life. Some will complain, but really have to ne venue to voice their remorse about joining. Some of us have found the interent to be quite effective in sharing our experiences and our opinions on why the business did not work. This is what one Amway defender calls the "internet war". What I have pointed out is that critics most often simply point out what the IBOs themselves have done. In many cases, the IBO is his own worst enemy. Afterall, critics didn't deny Amway and Quixtar had a connection, nor did critics make up claims about perfect water, etc.

It would appear that most of the problems has a root in the AMO systems, such as WWDB, BWW, LTD, or N21. Now, not all upline leaders are unethical, but it appears that many are, and new IBOs have no way to identify the good from the bad. It also appears that some of these upline leaders will issue bad avice. Advice that is detrimental to the IBOs, but financially beneficial to themselves, such as telling IBOs to never miss a function, or to buy more cds. In many cases, these unethical uplines do not care about IBO success, their goal is just to move as many support materials as possible, so they can fund their "diamond" lifestyle. Sadly, it is also apparent that the diamond lifestyle may be a facade in some cases. An illusion of wealth portrayed as a recruiting tool.

If you recognize some of these warning signs, ask tough questions of your potential sponsor and visit this or some of the blogs linked to this one for more information.

Monday, September 21, 2009

Amway - 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 di 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.

Friday, September 18, 2009

Amway - Building The Business?

One of the battle cries that were around when I was an IBO was that we were building the business. But as I look back at my Amway experience, I was truly misguided by upline about building a business. We were advised to submit to upline, as many IBOs today, apparently are still advised. We should not try to blaze a new trail, but simply follow in the footsteps of our leaders. Why re-invent the wheel,, we were told. Just use the one that upline created. That trail or wheel was the "system" which consisted of tapes/cds, books, seminars. Follow the system and you were assured of Amway success.

As I look back, I didn't know what building a business really meant. For most businesses, you need ot get more and more customers, or to build your customer base. That is building a business. As you get more and more customers, your business grows and gets more income. In the Amway business, most business building IBOs focus on sponsoring others which may not result in any increase of volume as many newbies do not order goods or quit before doing any substantial business. Also, because of the past antics of many IBOs and IBO leaders, the Amway opportunity
has a bad reputation and recruiting and sponsoring is very difficult for most people.

Even if an IBO were to try and build their business in the traditional manner of selling goods and trying to get more and more customers, they will have trouble finding and retaining customers. That is because Amway products in general cost more than big box and local retailers. As you try to build your customer base, retention of customers will be difficult because of said prices. And the reason for higher prices is because the 30% or so given back to IBOs must be included in the prices of the products.

I know many Amway supporters will argue about Amway's quality of goods, but quality is subjective and the average consumer will look at the bottom line (the price), and not the quality. But to address this, I have not seen any unbiased reports indicating that Amway products are superior to others. And because other companies such as Proctor and Gamble advertise, Amway IBOs have a huge competitive disadvantage.

The way that the few successful IBOs make it in Amway is to find enough downline to suffer the losses for you, and eventually enough downline to pay upline through tools and product purchases, in order for you to make your income.

So are you building a business or looking for downline to sacrifice on your way up the (legal) pyramid?

Thursday, September 17, 2009

Amway - Helping People?

One of the things my upline said at nearly every meeting was how we were helping people by sharing the dream and showing others the Amway plan. "Helping people". He claimed that IBOs became better people and were doing good for the community by helping people. I always thought ths was odd because the only people we really "helped" were those who got into the business. We didn't hang out with or help anyone else.

How do you help someone when your life is dedicated to buying and selling Amway products, recruiting Amway prospects and attending Amway related meetings to learn how to recruit more Amway IBOs and to motivate yourself to never quit the business. I used to think about people doing volunteer work, or community service projects, or even outreach through their churches. These are the real everydy heroes who are helping others. While an outreach volunteer feeds the homeless, IBOs are in meetings. When people are doing community service projects, IBOs are showing the plan or prospecting the malls for new recruits. Who is actually helping people?

Yes, I am aware that IBOs at times, contribute to Easter Seals and the like, but do they invest the kind of time that others do? And I'm not faulting IBOs, but simply pointing out that the Amway business activities can eat away at your time and prevent you from spending time with family and friends, and prevent you from actually "helping others". While the Amway business is no different that other businesses and the like in that regard, I do not feel that the tiny average earnings of IBOs make it worth their while to spend all of that time in meetings and recruitng to make their return on their investment a worthwhile activity.

So in all of the activities you engage in as an IBO, are you helping people? Or are you only helping people who might be interested in joining your Amway business?

Wednesday, September 16, 2009

Amway - Are You Broke Or A Loser?

LOL, one of the classic "tapespeak" lines that IBOs use is to call someone a broke loser if they do not join Amway or if they are critical of the Amway opportunity. Rich DeVos, co-founder and owner of Amway once made a speech where he discouraged this kind of behavior. But apparently, upline leaders continue to use that term or possibly teach it at functions. How else would newbie IBOs learn something like this?

What I find humorous in this is that IBOs often join Amway because they are in need of more cash! It is often the IBOs who are seeking easy wealth, or at least a "shortcut" to retirement and lifelong residual income. It is how the business if often pitched to potential recruits. Whenever an IBO tells me that his sponsor talks about how Amway is hard work that they will not get rich quickly, I ask them why they joined if that wasn't the case?

My former upline used to talk about how you need to control time and money in your life to achieve balance. And control of time and money is the ultimate prize to many aspiring IBOs. They believe that if they achieve diamond, they will wake up at noon every day, not have to work, and live in the lap of luxury. What is ironic is that while most active (system) IBOs are seeking more time and money, time and money is what they have less of because of their business particpation and business expenses (cds, tapes, books, voicemail, seminars/functions). Looking at the 6-4-2 plan, the majority of those active IBOs will earn less than $15 a month but will have expenses ranging from $150 to $500 a month for the system, depending on their dedication.

So as an IBO who is recruiting potential downline, if you decide to call someone broke or a loser, maybe you need to look in the mirror first? :-)

Tuesday, September 15, 2009

Amway - Lying Or Fake It Till You Make It?

An apparent IBO recently engaged me on facebook. I copied his statements and my responses. He goes by the name "Mike". He engaged me for a few exchanges and then he later comes back a month later to try and recruit me. In the exchange I catch him in a lie. Maybe he is learning fake it till you make it?

August 17 at 2:54pm Mike:
you wouldn't know a real biz if it hit you in the face.... who r u fooling???

Joe says: Who are you? Some Amway dude?

August 17 at 2:58pm Mike:
8.2 bil this year WITHOUT you... will be over 9 bill when the #'s all shake out... all WITHOUT you... r u stupid... this is fact!!! oh you must have a job... mike

Joe says: Amway 9 billion, Walmart 401 billion. No comparison.

August 17 at 3:04pm Mike:
lets see ... yes walmart great co... what do they do... oh they distrib.... only prob. with walmart can't have a biz... 15,000 new ibo's per day... over 40 mil. hits on the web everyday... the ONLY debt FREE co on the web that doing over a bill in biz .... income i'm plat. yrly 35-40 k...

Joe says: Debt free? Good for Amway. You are not Amway.

August 17 at 3:27pm Mike:
first thing you can do is call corp... they will give you doc... have been debt free from day one when rich & jay started... i don't know where you went to school but you must have flunked math... your crazy to think over head is 3k per month... no one gets sucked in... they join on their own... how many people start college and never finish... oh lets see ... they quit... mmmmm spent $$$$ on tuition/ books/ room-board....

Joe says: So are you profitable? Mike responds with the broke loser statement but a month later, he’s back………..

September 14 at 4:45pm Mike:
hey Joe... mike here.... do you want me to sponsor you??? had 3 new people at a home meeting on thur. last week... 2 are in and 1 customer... things are going well... mike

Joe says: It’s great that you had people at your meeting. Having people at a meeting doesn’t make you any money does it?

September 15 at 11:51am Mike:
have ALWAY'S been profitable.... i make a profit in EVERY biz i have... have been since i was 22... mike

Joe says: Are you making a net profit? What level are you?

September 15 at 2:24pm Mike:
yeh.. hi Joe... gas, cd's, functions and other expense 300-400.00 monthly... biggest expense are function weekends... run bout 300.00 for ticket,room and food... made over 50k... high margin of profit... must hang in to build the biz right... mike

Joecool commentary: So this IBO admits his expenses run about $300 to $400 a month to “build the business right”. You will notice that a month ago he was a platinum making $35 to $40K. Now, a month later he says he is making $50K. Clearly he is lying, probably faking it but not making it. Why do so many IBOs need to lie?

Amway - What Level Are You At?

One of the humorous things about talking to IBOs is how they will talk up success but never reveal their level, as if it is a big secret. Part of what I was taught as an IBO was to fake it till you make it. Or, to pretend to be successful and hopefully you will one day be successful. It is why IBOs also have a mantra to "speak it into existence". As if speaking of success will make it so. The sad reality is probably much different.

As an IBO, when I attended functions, I saw some folks driving cars that were barely alive, but getting out wearing their black suits. Sometimes I wonder if some of the diamonds are the same way, showing off nice suits and cars, but actually living in debt. There is evidence that this is true, as we have learned of more than one diamond having their homes foreclosed, a triple diamond filing for bankruptcy and other stories which seem to confirm that success may be fake or fleeting at best.

This is not to say that nobody is actually wealthy because of their Amway income. I'm sure some of the bigger pins such as crown ambassadors have a nice income from Amway. But these big pins, I believe are far fewer than lottery winners. And in addition to the scarcity of these big pins, it seems that most of them are still working the business hard. I mean traveling from city to city to give speeches doesn't sound like complete control of time and money as advertised in open meetings.

So IBOs and IBO prospects, what level are you at? Are you on schedule to achieve the lofty goals and dreams that were a part of the deal when you saw the plan? If you are not on schedule, ask yourself why not and what must be done to make it happen? If you have been around for more than a month and haven't sponsored a downline, there is a good chance that it will never happen. Do a self assessment. Determine whether you have fulfilled your end of the deal by showing the plan and purchasing and selling products. If you're done your part and are not progressing, maybe you are in the wrong business?

Monday, September 14, 2009

Amway - IBO and IBO Prospects?

When I was an IBO, my upline used to advise us to recruit people who had a financial need or young people who were open minded as they may not have preconceived ideas about Amway. When I was recruited, I was not where I wanted to be financially as I was about 29 years old when I first got recruited by my sponsor. I believe that this is still common practice today, to look for people who are in need and then offer Amway as a solution.

In my opinion, this is why some people defend Amway so fiercely. They accept Amway as their solution for long term financial stability and to admit that they were in error is difficult as it would not only expose the erros, but would leave the IBO as not having that "hope" of long term financial freedom.

Many prospects see big dreams when the diamonds parade on stage with designer suits and talk about waking up at noon and enjoying a lifestyle chock full of luxuries. It's almost like dreaming about hitting it big in Las Vegas or winning the lottery. I can't fault prospects for wanting some of these thing. I know I certainly had some of these same dreams when I was an IBO.

But the sad reality is that some diamonds are simply putting on a show, like a illusionist or a magician. Diamonds may indeed earn a six figure income, but after taxes and other expenses such as medical insurance, a diamond is very likely to live a very middle class lifestyle. Now I'm fairly sure that a crown ambassador type may have a million dollar income, but these Amway corwns are very rare, and the ones who exist have been in the business for a long time. There is not much chance of any new IBO coming in and achieving that level. In fact as time rolls on, it seems that more diamonds drop out due to divorce, better MLM opportunities or simply quit. It is apparent that long term residual income is a myth.

Amway reports that the average IBO earns $115 a month. I believe that number is also questionable as "most" IBOs (as shown in 6-4-2) actually earn more like $9 or $10 a month. Is this what you are signing up for?

Thursday, September 10, 2009

Amway - WWDB Is The Best LOS? Not!

When I was an IBO, I was in WWDB. I remember many questionable things that were said and taught by some of the upline leaders. I heard that Amway saves marriages, that diamonds pay cash for everything, including homes. I heard that NOBODY made a red cent off of the tools systems. Quit your job if you can't get time off for a function. Okay to sink yourself into debt if you are using the money for buying more tools.

Many of the things said and taught by these WWDB leaders were either lies or very unethical in my opinion. Well, as a wise man once said, a house built on sand will not survive the test of time. I have been out of Amway for over ten years and have done much with my life since then. But time has exposed the apparent hypocrisy and falsehoods told by some WWDB leaders.

Diamonds in bankrupcty, diamonds failing to pay their mortgages (homes paid in cash?), diamonds quitting, diamonds divorcing, revisionist history. I believe as more time passes, more hypocrisy will be exposed. Now an Amway apologist might claim that a diamond's divorce or home foreclosure is nobody's business. While that might be true, I do not believe it applies when you stand on stage and/or sell tapes/cds proclaiming that Amway saves marriages, or that you pay off your homes in cash, unlike "broke" people who need mortgages.

Here's a small sampling of links, exposing the utter hypocrisy of these leaders:

Wednesday, September 9, 2009

Amway - Business Owner or Not?

Join Amway and own your own business! It sounds like a pretty cool concept. I know it sounded cool to me and was part of why I joined. But as an Amway IBO, are you really a business owner? Yes, you technically own a business where you pay taxes and whatnot, but it is not really different than a self employed salesman who works on commission or under contract.

Thins about this for a moment. If you are a business owner of a real business, you sell a product or service and you get to keep the profit. You keep all the profit. Amway pays roughly 30% of product sales for bonuses. But unless you have enough donwline and/or volume, you get only 3% or 6% of that 30% and the layers of middlemen/upline get the rest of the bonus for your work. When you sponsor someone and increase your volume, your upline gets more action fro your downline than you do. Isn't that almost exactly like being an employee where the company owner makes money off your efforts? You as an IBO only start to get a bigger piece of that bonus if you are able to sponsor enough downline and/or move enough volume to reach the higher levels of the business. I would guess you need to reach approximately the 18% bonus bracket or higher before you can cover your IBO expenses which may include functions and standing order.

Did I mention that sponsoring people is a difficult task? Most IBOs are not able to sponsor a single downline. Many IBOs cannot even find people who are interested in seeing the Amway sales and marketing plan. Did I mention that all of yuor efforts in finding people to sponsor also benefits your upline more than yourself, until you find enough people to help move your volume to about the 18% level. So although an IBO and his sponsor/upline do not have an employee - employer relationship, an IBO is basically a commssioned employee UNLESS that IBO is able to sponsor enough downline who will move volume, or unless that IBO is a very rare IBO who sells a lot of products/

So IBOs, are you fooling yourself into thinking you are an independent business owner when you are actually operating as a commisioned employee?

Tuesday, September 8, 2009

Amway - Why You "Need" A Business Mentality?

One of the catch phrases that IBOs spout quite often is that you need a "business mentality". Those of us who have an "employee mentality" simply cannot cut the mustard in Amway. I find this ironic since the vast majority of Amway IBOs have a job. A job that then NEED in order to pay for their Amway business. A job that pays for their voicemail, cds, functions and books, in addition to the cost of the Amway products.

Apparently, a business mentality is one that doesn't expect quick profits, despite upline's claim that the Amway business has low risk and low overhead. A business mentality is also one where you reinvest any or all profits back into buying support materials. A business owner doesn't expect to make a profit for 5 years. Many of these claims are taught by unethical uplines and unfortunately, many IBOs accept the teaching and buy into it.

Now it is true that a business owner might have to think and view things differently than an employee. For example, an employee might do a great job from 9-5 but after 5, that employee may be headed home to care for his or her family, or to participate in some exercise or recreation. The business owner might be inclined to stay after hours to finish a job because he or she may have invested much, and will want to make sure that the business succeeds.

It is my suspicion that uplines want their downline IBOs to adopt a business owner mentality, not because they want downline to succeed, but because it instills a dedication to the tools purchases and it also takes an IBO's focus off profits for a few years. Thus IBOs think they are successful (without profit) is they are listening to standing order, attending all the functions and showing the plan. It is a gimmick used to retain IBOs who are not profitable. If IBOs were actually making money, there would be little need to continue to motivate them with an endless suppy of cds and functions. But because most IBOs lose money or make little, the average IBO must be taught that a "business owner" commonly loses money for a number of years, or that they must continue to reinvest their profits in order to succeed.

In posting this, I say to IBOs, just make a profit. That is all the motivation you need. Keep track of your bottom line and look at the return on your investment of time and money. That is the action of a real business owner.

Friday, September 4, 2009

Amway - Lies, Damn Lies And Statistics - IBOFB Spinning Average Income Stats Again

IBOFightback recently posted an article on his blog about Amway's average income.
Amway reports that the average income on an active IBO is $115 a month. But Amway disregards "inactive" IBOs in determining the average income.

Amway defines an active IBO as follows:

"An “active” IBO is one who attempted to make a retail sale, or presented the Amway Global IBO Compensation Plan, or received bonus money, or attended a company or IBO meeting during the year."

So IBOFightback (David Steadson) says on his blog: "That’s it. If you ask your brother, once, in a whole year, if he wants to buy a can of XS … and he says no! … you’re active! $115/mth is a pretty good income for that, isn’t it? Or how about if you and your spouse are both in to health and each buy Nutrilite Double X and Omega 3 …. you’ll have bought more than 100 points of products, and qualify for a 3% rebate! Congratulations, you’re now “active”. Amway critics think it’s scandolous that you only earn $115/mth for doing your shopping!

Of course, that’s not what’s going on at all is it?

Lies, damn lies, and statistics." (Quote IBOFightback)

Of course, it's just complete propaganda and I will disprove IBOFB (yet again) by using basic math and the common 6-4-2 plan. The 6-4-2 plan assumes that there is a group where there are 79 IBOs, all doing 100 PV. So the group PV is 7900. If BV is about a 3:1 ratio, then 7900 PV is equal to 23,700 BV.

For a platinum group, Amway will pay 25% as their bonus. 25% of 23,700 is $5,925. $5,925 divided by 79 IBOs is $75. And that is the "average". We know that the platinum will get the lion's share of the bonus and "most" IBOs will in fact earn $9 or $10 each. And these figures are gross income and do not include business expenses such as standing order, functions, taxes, and other business expenses.
If you factor in Amway's one time platinum bonus of $10,000 (which only the platinum receives), then the average for these 79 IBOs goes up to about $85 a month, which is still short of the $115 a month average.

So we can conclude logically that Amway's average income is probably inflated by including Crown Ambassadors or at least higher up pins in their count, which drives up the average.

So there you have it folks, the "average" income for a completely active group is about $75 to $85 a month, before taxes and expenses. Add in all the IBOs who do little or nothing, which IBOFightback claims is "most" and the average income for all these IBOs would be significantly less than $75 or $85 a month. Factor in taxes and tools expenses and it is easy to see how "most" IBOs can indeed suffer losses. Notice ho IBOFB doesn't use real life examples in his article? Only anecdotal stories.

So IBOFighback is right when he says "Lies, damn lies, and statistics", except he doesn't talk about how he is spinning the statistics.

It might be interesting and amusing to note that I recently discovered a website, linked on my other blog showing that a "David Steadson" from Australia, recently qualified at 100 PV for the first time in 2008. :-)

Thursday, September 3, 2009

Amway - Everyone Starts At Zero?

The Amway business is a level playing field. At least that's what my upline told us when I was an IBO. That everyone starts at zero. While that is somewhat true, there were other factors that existed, that most IBOs did nto know about. That factor is the possibility of PV manipulation. I believe that groups that are not on direct fulfillment (Groups still calling in and picking up) are able to transfer PV around. Thus certain groups or favored downline could be manufactured into higher pins. I believe most groups are currently on direct fulfillment but I did confirm about less than a year ago that some groups still are on call in and pick up.

But let's examine the concept that everyone starts at zero. While this aspect may be true, certain people are simply better at selling, or better and more adept at socializing and talking to others. So while your PV count may be zero, the skills needed to start and run a business is not a level playing field for most. I believe uplines state this to give prospects the idea that everyone has an equal chance at succeeding in Amway. I just cannot believe this to be true. Even current diamonds, while having achieved a certain level, probably could not "start at zero" and build a diamondship again.

Thus when you really think about it, the "old timers" of the diamonds should actually be given less credibility than the newer ones. Do you really believe that a diamond or higher pin who built his business in the 1970's can really teach people in 2009 how to build the business in a way to address people in 2009, and the fact that the business is mostly internet based as opposed to the old days.

It is easy to stand on stage, tell people how great you are, show off material wealth and then tell prospects that everyone starts at zero and that anyone can build the business. I do not believe that it is true. I also strongly suspect that very few (if any) of the current diamonds would be able to "start at zero" and build a new diamondship here in the US, where the reputation and shrinking sales would be handicaps too great to overcome for the vast majority of propsective IBOs. I recall back in 2005 or 2006, an LOS had some kind of commitment to personal growth amongst the diamonds and above. I do not believe much fruit was grown out of that effort.

Wednesday, September 2, 2009

Amway - The System Doesn't Work?

Most IBOs involved in Amway belong to some kind of line of sponsorship, which has a system. These systems consists of groups such as Worldwide Dreambuilders (WWDB), BWW, Network 21, INA, LTD, etc. The system usually consists of tapes or cds, voicemail, books, websites, and functions or seminars. The system typically costs on the lower end, $100 a month on average, and for very dedicated IBOs, up to $500 a month or more, depending on what the IBOs are taught. But does the system work?

Based on observation, and information revealed by Amway, I can conclude that the system does not work. After discarding IBOs who do nothing, the average income of the remaining IBOs is a paltry $115 a month. Furthermore, if the system worked, then then would be a consisten progression of people moving from 1000, to 2500, t0 4000, to platinum and higher. While new and inspired IBOs can rise rapidly to the silver or platinum level with excitement, they will often fall apart and end up quitting, which is why you probably do not see very many new diamonds. Also, it appears that Amway growth is primarily from foreign markets and not the US. In the US, the Amway name appears to be saturated and finding new recruits is very difficult. Some tools zealots (i.e."Tex") claim the system works but the prices are too high. Well, Tex is dead wrong. If the system worked as advertised, then the price of the system would be seen as reasonable by most.

Tex will also claim that the system will work if only the prices were lowered. Well, again, Tex is dead wrong because the price of the system doesn't have any causal relationship with the effectiveness of the tools. The only difference is that the uplines who produce the tools, would have little or no incentive to produce tools if they need to take the financial risk for small or no profits. Because we know that many Amway businesses fall apart, even at the diamond level and higher, maintaining your income and lifestyle can become difficult and diamonds and higher may not be motivated to take time away from their Amway businesses to produce tools if there is little or no profit in them.

I will contend that the system does not work. I challenge anyone to prove this wrong with facts, preferably unbiased facts. *crickets chirping*

Tuesday, September 1, 2009

Amway - Is Amway A "Real" Business?

Many IBOs are taught to "buy from themselves". Although in some of these groups, retailing may be mentioned, it certainly is not taught in a serious manner. I believe it is because people in general simply are not comfortable with selling products. Thus the concept of buy from yourself makes the masses comfortable. What they do not realize is that they are simply loyal Amway customers and not running a business. As I mentioned in a previous post, in what business do you not have customers? It is why IBOs must ask themselves, are they running a "real" business?

For many IBOs, the focus of their efforts is on recruiting others. But why would someone want to join a system where they basically sign up to be a loyal customer and be a recruiter for other loyal customers? The pyramid like compensation plan is what drives many IBOs. Find enough downline and eventually, your downline will absorb the financial losses for you and will become the srouce of your income. I believe that the 4000 PV or platinum level is about where you as an IBO can find teh break even point if you are dedicated to the "system" consisting of tapes, cds, books, voicemail and functions.

Secondarily, in addition to signing on as a loyal customer of Amway, if you join a system and participate in standing order and/or functions, then you have also become a loyal customer of the "system". Sadly, many upline will push IBOs to keep purchasing tools regardless of the IBO's progress in the business.

So I ask the question again for IBOs and potential recruits. As an IBO, are you running a real business? Can you get a business loan using the 6-4-2 plan? Have you tried showing it to a loan officer? Can you cite BWW or WWDB as educational credentials when applying for a job or will you be laughed out of the room? For these very reasons, I can only conclude that many, possibly most IBOs are not running a "real" business. They are simply doing what their upline advises. These uplines are more concerned about selling their tools than they are about their downline IBOs. It appears that downline IBOs are expendable. They quickly become bitter, broke, or not having expended enough effort if they do not "make it".

So are you running a real business?